The global management consulting sector.

While other practices or professions trace their roots back several centuries, management consulting is less than 150 years old. However, this sector has made giant strides in the West, especially in the United States, from the 1930s to the present and in Western Europe since the 1950s. Waves of internationalization occurred on both sides of the Atlantic. Expansion got a further boost when Central Europe opened the gates in 1990. With that opening and the World Wide Web, both local and big multinational management consultants stepped up their efforts. Further strides are being made now in the booming Asia-Pacific region. We first explore historical highlights and the key drivers of growth; then briefly analyze service offerings, end-use markets, available statistics, and company profiles. Finally, we probe emerging trends and the contours in this field, a sector that is an amalgam of management practice and a professional service. Our investigation is based on archives, theses, research databanks, association and company data, and our own primary work.

While management practice is as old as civilization itself, management theory and management consulting are of more recent vintage. Their origins can be traced back to the end of the nineteenth century, and they came of age in the twentieth. In the twenty-first century, we shall see further refinements in all three fields, with diversification, transparency, and accountability as emerging trends. Managers, theoreticians, and consultants will have to be flexible, open-minded, and prove their mettle. Expertise, trust, and coaching will be valued, along with implementation.

Background and History

Management consulting is of a younger vintage than either management practice or management theory. It is a high-pressure, high-level practice, but it is striving hard now to be viewed also as a profession. Some put the origin of consultancy in general, and management consulting in particular, in the middle of the nineteenth century when Samuel Price, Foster Higgins, and James Sedgwick each began operating a business that included "advisory practice" in England or the United States.

According to business historians, the first pure consultancy was that of Arthur Little in the United States, who started out in 1886 with a focus on technology and "engineering economics." It was not until 1904, however, that he and his firm moved beyond chemical testing and engineering into administrative advisory services. In a similar fashion, George Touche, William Deloitte, and Arthur Young each started his own accounting practice in the 1890s and then shifted into auditing and advising after 1900. Thus, the argument can be made that true management consultancy made its appearance only in the twentieth century.