FIRST DRAFT – Please do NOT quote!
The Development of the Management Consultancy Business: A Co-evolution
Perspective
Matthias KIPPING*
and
Ian KIRKPATRICK**
Paper for the 4th Critical Management Studies Conference, Cambridge 4-6
July, 2005
SUB THEME 18
‘Professions and Knowledge Based Occupations’
* Universitat Pompeu Fabra, Department of Economics and Business, Ramon Trias Fargas, 25-27, 08005 Barcelona, Spain. Tel: +34 93 542-2874; e-mail: [email protected] ** Leeds University Business School, University of Leeds, Leeds LS2 9JT, United Kingdom. Tel: + 44 113 233-2611; e-mail: [email protected]
The Development of the Management Consultancy Business: A Co-
evolution Perspective
Introduction
The last decades of the twentieth century witnessed rapid, some would say
‘explosive’, growth of the management consulting industry. Until the economic
slowdown started in 2000, the worldwide market for consulting products increased
between 10 and 15 per cent per year, considerably more than global gross domestic
product (Kennedy Research; Armbrüster and Kipping 2003). In 2003 the total revenue
of the top ten consulting firms stood at over $51 billion (Consulting News). Growth in
this business coincides with the creation of some mega-firms with several ten
thousands of consultants – in a sector traditionally, and still, dominated by small and
medium-sized consultancies. It also coincides with rising numbers employed in the
industry (see Graph 1 on the number of employees in the top 30 firms worldwide
between 1983 and 2003) and in the range of products and services offered. But
perhaps most significant of all is the unprecedented level of visibility and influence
now enjoyed by consultants, especially large global consulting firms. Public and
private organisations now routinely employ consultants for a range of tasks (Saint-
Martin 2000; Macdonald). Consultants, one might say have successfully embedded
themselves ‘in the interstices of organizations’ (Ruef 2002).
In recent years there has been considerable debate about how we should account for
this dramatic change. The functionalist literature (as well as much of the business
press) has identified changes in the world economy – often summarized under the
‘globalisation’ label – as the major explanatory variable (e.g. Rose and Hinings 1999).
From this perspective the growth in management advice is regarded as a direct and
unproblematic consequence of changing corporate demands and the need to enhance
competitive performance. Against this is a more influential critical literature that
draws attention to the discursive strategies of the consultants themselves (cf. Fincham
1999, Fincham and Clark 2002). Exploiting the control needs of managers,
consultants, it is argued, have been able to create a constant demand for their services,
by repeatedly launching new management ideas or ‘fashions’. Building on the earlier
work of Abrahamson (1991, 1996) and Sturdy (1997), Kieser (2002) has probably
gone furthest in this direction. He argues that by exploiting the fears and uncertainties
of, consultants have created a kind of addiction, turning managers into ‘marionettes
on the strings of their fashions’ (Kieser 2002: 176; cf. also Ernst and Kieser 2002).
Kieser and many others see this as part of a wider phenomenon, often labelled the
‘management fashion industry’, which also includes individual management gurus,
the popular management press and the business schools (e.g. Abrahamson 1991;
Micklethwait and Wooldridge 1996; Suddaby and Greenwood 2001).
In this paper our goal is to identify some limitations of this critical literature and
suggest an alternative. A key problem, we argue is that the fashion based view of
consulting development actually fails to explain longer-term historical trends in the
growth of the sector. If, as this approach suggests, consultants (and others) constantly
launch new fashions, which replace the previous ones, all they tend to do is ensure
their survival and the stability of demand. This however conflicts with historical
research, which reveals not only tremendous growth since the beginning of the
twentieth century (and thus in the overall size of the fashion market), but also more
fundamental shifts in the focus of consulting work itself (Kipping 2002). A further
concern stems from the heavy emphasis in this literature on the strategic agency of
consultants and their organisations in promoting change. As is widely noted this leads
to managers being portrayed as gullible victims of the fashion setters, who have no
‘functional’ reasons for hiring consultants other than their own fear of control loss.
More generally, there is a tendency to either ignore or push into the far distance the
‘defining context’ of broad structural and historical conditions that shape the practice
of consultants (Fincham 1999). The dominant image is of knowledge entrepreneurs
who possess almost boundless freedom to discursively shape organisational realities,
client demands and, indeed, client identity itself.
The remainder of this paper contains four main parts. Following an examination of the
fashion-based approaches, part two will explore some criticisms of it in more detail.
Here we will highlight, in particular, the legacy of neo- institutional theory. This
approach, although useful, overstates the importance of legitimacy and makes it more
difficult to account for the growth and the change the consultancy industry has
experienced in the longer term. Part three of the paper will then consider ways in
which existing accounts of the historical development of management consulting
might be strengthened by drawing on insights from and critical realism and
applications of it such as co-evolution theory (Reed, 2001; Lewin et al., 1999). This
literature we argue, offers a more robust theoretical platform for understanding the
growth and the changes of the consulting sector, one that emphasises both the
importance of structural conditions and the entrepreneurial role of consultants. In the
final section we seek to illustrate this drawing on a range of historical sources. We
suggest that consultants exploited opportunities provided by structural changes in
managerial capitalism (cf. Chandler 1977, 1990; Whittington and Mayer 2000;
Fligstein 1990, Barley and Kunda 1992) and the availability of new ‘control
technologies’. While this allows for some human agency (consistent with the view
that consultants play an entrepreneurial role in generating client dependency), it also
recognizes how this process was enacted within and shaped by a particular historical
context.
Fashion theory and the success of consultants
As suggested earlier an increasingly dominant theme in the critical literature on
management consultants is on the ‘symbolic nature of consultant strategies and
consultancy as a powerful system of persuasion’ (Fincham, 1999: 335). The emphasis
is on the strategies of consultants seeking to demonstrate their worth and effectively
shaping demand for their services. Central to this are wider notions of management
fashion and their cyclical development over time. In common with other agents such
as gurus business schools and mass media organisations consultants are seen as key
players in the commodification of management ideas and their dissemination as
fashions (Abrahamson 1996). In the process they redefine the collective beliefs of
managers about which techniques are most effective and progressive. Hence the
power of consultants stems from their ability to generate ‘demand for their own
services by creating management fashions, by stirring up managers’ fear and greed
and by making managers dependent on them’ (Kieser 2002: 182).
Three types of explanation are commonly given for why clients might succumb to
these influences (Clark and Salaman 1998). First are characteristics of management
work that heighten managers’ receptivity to the ideas of consultants. Many accounts
emphasise deep-rooted psychological needs of managers and in particular the way
consulting interventions he lp satisfy –albeit only temporarily– a desire for order,
security and control (Huczynski 1993; Sturdy 1997). Abrahamson (1996) adds to this,
focusing on how new fashions may satiate managers’ need for status and help to
overcome a sense of boredom and frus tration. Finally are more concrete reasons for
the willingness of managers to bring in consultants. Kieser (2002) notes how a desire
for control is also linked to ‘the struggle for careers’ (cf. also Jackall 1988) and to the
pressure on managers to demonstrate performance to external stakeholders by
mimicking so called ‘best practices’ of competitors within the same field (the
‘bandwagon effect’).
A second kind explanation focuses on the packaging of management fashions and the
performances of consultants themselves. According to Kieser (2002: 174) the most
successful fashions are those that ‘create the perception of enhanced control’ and
promise ‘quantum leaps in performance’. This in turn is linked to the skill of fashion
setters, for example, in designing new products that are perceived as relevant, familiar
and simple to understand. Others have focused on the use of rhetoric and how
consultants trade on their expertise and reputational capital (Clark 1993). Finally is an
influential trend in this literature that focuses on the way management gurus and
consultants manage impressions through their use of language, demeanour and glossy
documents. Clark (1995: 18) for example describes a range of communication
techniques whereby consultants ‘construct a reality which persuades clients that they
have purchased a high quality service’.
Thirdly, commentators have focused on ‘the importance of the socio-economic and
cultural context within which management theories emerge and become widely
adopted’ (Clark and Salaman 1998: 144). Abrahamson (1996: 255) for example
argues that the selection of fashions and their success is conditional on particular
social norms of rationality and progress and also by ‘mangers’ collective aesthetic
tastes’ (cf. also Greatbatch and Clark 2002). Others note how those ideas that prevail
tend to be those that best capture the ‘zeitgeist or “spirit of the times”’. (Grint, 1994;
quoted in Clark and Salaman 1998: 144). Finally, links are drawn in some accounts to
the broader political, technical and economic context in determining the success of
fashion. Here, as we shall see below, attempts have been made to like the ebb and
flow of new fashions to economic cycles and perceived gaps in performance (Barley
and Kunda 1992; Abrahamson and Fairchild 1999).
Many of these strands have been brought together in the more recent work of Rovik
(2002) who identifies what he calls the ‘secrets of the winners’. Based on an empirical
study of three successful ideas, Management by objectives, Total quality
management, and Development dialogue (the latter being a Scandinavian adaptation
of American performance appraisal systems), he outlines a number of factors that
contribute to this success (ibid.: 142-143). Included on this list are characteristics on
the way consultants package ideas and their approach towards presenting them. From
a theoretical perspective, Rovik (2002: 143-144) rejects what he calls a possible
‘rationalistic- instrumental’ explanation, i.e. the suggestion that the winning ideas are
simply the ‘best management tools’. He also questions the ‘metaphysical- inspired
belief that organizations are more or less helpless captives of the Zeitgeist, and
consequently, that a recipe that gains wide acceptance is an idea whose time has
come’. Instead Rovik advocates what he calls a ‘sociological- institutional paradigm’.
On the one hand, he highlights the social construction ‘through the process of
definition and presentation’. On the other hand he presents a modified view of neo-
institutional theory. The latter suggests that organizations can gain legitimacy
adopting ideas from the ‘institutional environment’, which does include management
consultants. According to Rovik, it is also necessary that the ‘recipes themselves have
been legitimized in terms of norms and values that are widely accepted among the
world’s organizations’.
The thrust of this literature is therefore to stress how management consultants and
other fashion entrepreneurs can, under certain conditions shape demand for their
services. This literature also suggests that over time clients become increasingly
dependent on consultants generating (from the perspective of the latter) a virtuous
circle in which demand begets more demand. Kieser (2002: 176) for example talks
about the ‘planned obsolescence’ of consulting products and how ‘consulting always
plants the seed for new, deeper-reaching uncertainties’. Of course none of this means
that consultants are always successful. It is often acknowledged that managers may
resist change and are far from being gullible or mindless consumers (Sturdy 1997;
Fincham 1999). As we shall see the market for management fashion is itself unstable
and subject to frequent and cyclical changes. But while these limits on the power of
consultants are recognised the dominant theme of this literature is emphasise their
primary entrepreneurial role in driving change through the mobilisation and
legitimation of fashion.
Some limitations of the fashion approach
This account of change –what we might loosely describe as fashion theory– has some
obvious merits. Unlike the earlier, more practitioners based literature the focus is not
entirely prescriptive. Nor is it assumed that consulting interventions are always
functional and that they will result in positive organisational learning. Instead, as we
have seen, this literature is more critical in drawing our attention to the role of power
and self- interest in shaping practice. The risks as well as benefits of consulting
interventions are highlighted. And yet, while this theory and research has greatly
advanced our understanding, it suffers from a number of limitations. In what follows
we outline two main kinds of problem. First is the question of how far this approach is
helpful in explaining longer-term historical trends in the consulting industry. Second
are some more deeply rooted theoretical problems arising from the influence of
institutional theory and the relative neglect of defining context in accounts of change.
Accounting for long term trends
To illustrate the first problem it is useful to look briefly at the historical research
conducted on the development of management consulting since the early twentieth
century (e.g. McKenna 1995, 1997, Ferguson 2001, Kipping 1996, 1997, 1999, 2002).
This research draws our attention to three main characteristics of change.
Firstly, this research points to what, by any calculation, is the staggering rate of
growth of this sector over a relatively short time period. Firms, like McKinsey or
Booz-Allen & Hamilton that counted one or two dozens of consultants in the 1930s
(McKenna 1995), grew to several hundred by the early 1960s, with a significant
number located outside the US (Kipping 1999). Today the same firms employ several
thousand consultants. The industry leaders IBM, Accenture and Capgemini now have
several tens of thousand employees. The available estimates for the past decades show
how overall employment among the largest thirty firms in the industry grew from
about 20,000 in the early 1980s to 430,00 at the beginning of the 21st century (see
Graph 1). In terms of global revenues, growth has also been staggering. Table 1
indicates an increase in global revenues of the top ten worldwide management
consultancies from $160 million to $51.5 billion between 1973 and 2003. This
amounts to a more than 300 fold increase over the thirty-year period in nominal terms.
Even when inflation is taken into account, the compound annual growth rate is XX,
far beyond the growth of the world economy during the same time period.
TABLE 1 ABOUT HERE
This growth not only concerns the largest firms; there also seems to have been an
overall increase in the number of service providers in an industry still dominated by
individual practitioners and small and medium sized consulting firms (Keeble and
Schwalbach 1995; Crucini 2004). Moreover, it can only be partially explained by
globalisation, even if countries like Germany and Japan only experienced a significant
development from the 1970s and 1990s onwards, respectively (Kipping 2002b). The
dominant consulting firms were already operating at a global scale during the inter-
war period (Kipping 1999). Hence, one must look for other explanations for this rapid
growth. A key factor, for example, seems to be the proliferation of different kinds of
management consulting services – including HR, operations management, strategy
and IT. Consultants to a certain extent managed to ‘colonize’ the field of management
knowledge (Suddaby and Greenwood 2001).
However, and this the second important finding from the historical research, during
the 20th century the development of this sector has not been linear. Rather it has gone
through a number of distinct, albeit overlapping waves characterised by qualitatively
different kinds of management consultancy, focusing on different types of services
(Kipping 2002; cf. McKenna 1995, Ferguson 2001). According to Kipping (2002), the
dominant consultancies in the first wave provided services related to the ‘scientific’
organization of individual work and the productive process in factories and offices.
By contrast the most successful consultancies in the second wave concentrated on
advice to top management in terms of corporate strategy and structure. Finally, those
in the – still emerging – third wave focus on the use of information and
communication technologies to control far- flung and extensively networked client
organizations. The main characteristics of each of these waves are summarized in
Table 2 [NOTE: Kipping’s analysis explicitly excludes HR consultancies, since these
were never a major concern for top management and never dominated the consultancy
industry in terms of reputation and visibility, even if some of them reached
considerable size, as shown in Table 1.]
TABLE 2 ABOUT HERE
The important point here is that these waves are not the result of short-lived
management fashions. Instead, they represent a considerable difference in the focus of
the consultancy services – even if these also evolved within each of the waves (see
below). Thus, consulting in the first wave was oriented towards shop floor and
production management; second wave consultancies focused on the corporate level,
providing advice on organizational issues, planning and marketing – even if they
sometimes also got involved in implementing them at lower levels of the
organization; third wave consulting consists mainly in implementing IT-based
management and control systems with the adaptation of organizational practices and
the corresponding training. For a number of reasons, related mainly to their reputation
and their own structure (Kipping 2002a), the dominant firm in one wave found it
difficult to retain their leadership position in the subsequent wave. Due to the overall
growth, their decline was initially relative and therefore difficult to perceive – even
for industry insiders.
Thirdly, each of the waves identified above was not only characterised by different
populations of firms, but also by radically distinct approaches to organising consulting
work (Kipping and Kirkpatrick 2004). The first wave was made up primarily of
smaller engineering based firms that were highly decentralised in their organisation.
The second wave was dominated by larger ‘one firm’ consultancies typified by the
model of McKinsey and its emphasis on partnership and strong corporate culture. The
current –and still emerging– wave is dominated by much larger global firms with
fairly formalized management structures and tools. Hence, one sees a marked shift in
the composition of this sector and the population of firms within it over time. As
noted above, these populations were and are overlapping. There has been no
straightforward and immediate shift in populations. This fact is also to some extent
illustrated in Table 1 above. Among the top ten consultancies in 1973, those of the
second wave clearly dominate, but one can still see the tail end of the first wave (May
and Maynard). The data for 1993 and 2003, clearly show the rise of the third wave
with the IT firms only appearing in the final year. This leaves the second wave in
2003 in a similar position to the first wave in 1973 with only McKinsey remaining
among the top ten.
Some limits of fashion theory in explaining change
Returning to the matter in hand, our contention is that none of these longer-term
trends can be adequately explained by the fashion based approach. Firstly and most
obviously is the problem of how one should account for the rapid growth in the size
and scope of the management advice industry. As we saw the focus of the
management fashion literature is on how fashions come and go, following a kind of
bell shaped pattern. Implied by this is that fashion niches or fields exist in a state of
equilibrium. While there is a cyclical turnover of new ideas and products (each of
which dominates the market for a short time) the overall level of fashion that can be
consumed remains more or less the same. As Abrahamson and Fairchild (1999: 713)
put it: ‘each fashion niche has a finite carrying capacity in terms of the number of
fashions it can sustain, because knowledge consumers can only attend to a limited
number simultaneously’. It is also assumed that knowledge entrepreneurs (read
consultants) will fill these niches to ‘near maximal capacity’ because of high financial
returns. Hence, this model assumes that fashion markets have a finite capacity both in
terms of the numbers of fashions and providers who can be accommodated. This
however seems to run counter to the historical evidence relating to the consulting
industry. As we saw, there has been a dramatic increase in the size of this market
measured in consultancy revenues and employment, in the number of providers and in
the overall demand for management fashion.
A second problem concerns how we account for broader, more qualitative, shifts in
the nature of consulting interventions over time. The fashion model as we saw draws
our attention to constant flux and change in management ideas and fads, some of
which get recycled over time. This in turn has been explained in some accounts by
changing cultural preferences and short-term economic cycles. But harder to
understand from this perspective are more fundamental breaks in the industry and
longer-term shifts in the emphasis and focus of consultants such as those described
earlier (also see Table 2). How, for example, do we account for the shift away from
production-centred, engineering-based services, focused primarily on the control of
labour, to an emphasis on corporate strategy in the 1960s? More recently, why have
we seen such a dramatic move across the industry towards the development of IT
related, or ‘whole systems’ consulting products? The emphasis in the fashion based
approach on explaining historical change as a sequence of shorter term cycles –
characterised by ebbs and flows of new management ideas– makes it harder to
account for these more deep rooted, structural shifts in the nature and dynamics of the
consulting sector.
Finally, and closely related to the above, is the question of how one explains shifts in
the population of consulting firms over time. The fashion literature says very little
about this. Usually implied is a model of natural selection in which consulting firms
and other organisations (such as business schools) or individuals such as gurus
compete with each other in a ‘fashion arena’ (Kieser, 2002; Rovik, 2002) – even if
their competition also leads to a faster commodification of new management ideas
and a need to start the whole cycle again. Those firms (or populations) that survive are
by implication those most successful in articulating and disseminating new fashion.
Hence knowledge entrepreneurs ‘thrive or falter on their ability to convince the
management audience why it is imperative that they should pursue certain
organizational goals and why their particular technique offers the best means to
achieve these goals’ (Clark and Greatbatch 2002: 129). But once again, while helpful
this kind of account is also limited. One problem is that it offers no explanation for
why entire populations of firms – such as the engineering consultants that dominated
the industry until the 1960s – failed to enter new markets and respond to new
fashions. Moreover, if there is a process of natural selection and, as we noted earlier,
fashion markets have a finite carrying capacity, then why is it that many older firms
managed to survive in the industry long after new fashions and products had become
dominant?
Theoretical Assumptions
The fashion-based approach therefore runs into some difficulty when it comes to
accounting for longer-term trends in the management consulting business. Partly this
is because not much attention has been paid to these kinds of questions. However one
might also argue that these limitations arise from certain underlying theoretical
assumptions. Here we think it important to draw attention both to the influence of
mainstream institutional theory and to more general understandings of the structure
and agency.
The legacy of institutional theory
The influence of institutional theory has already been noted, especially with regard to
the work of Abrahamson (1996), Kieser (2002) and Rovik (2002). These authors
make effective use of concepts such as isomorphism to explain how dominant
management ideas get disseminated within fields (or niches). However, at the same
time, what they also take on board are some inherent difficulties of this approach,
most notably with regard to change. This is not to say that change is ignored. There is
considerable emphasis is on theorising change as a process of de- institionalisation
(Oliver 1992) in which established ideas (read fashions) loose their potency over time.
But what is much harder to explain from this perspective are ‘other types of changes
underway in actors that may result in more profound transformations in fields’, in
particular those involving ‘the emergence of new populations’ or ‘changes in field
boundaries’ (Dacin et al. 2002: 50). An assumption, often implicit, is that
organisational fields are relatively stable in their overall structure and membership
over time. As such the focus is primarily on accounting for changes –such as the ebb
and flow of new fashions– that occur within the basic parameters of a field, rather
than more fundamental breaks in the underlying rules of the game. While there has
been some attention given to the possibility of field re-composition (Reay and
Hinings, 2005), the mechanisms that bring about such epochal change are, as yet,
poorly understood.
A further problem is the tendency to overstate the importance of legitimation in
accounts of why managers buy consulting products. Within institutional theory,
although there is some recognition that both “technical” as well as “institutional”
pressures are likely to shape management practice (Powell, 1991, Oliver, 1992), most
attention is focused on the latter. This is also true of the fashion-based literature. Here
as we saw the emphasis is on how managers use consulting products as a way of
increasing legitimacy, regardless of their impact on actual performance (Kieser, 2002;
Rovik, 2002). Now the problem here is not that legitimation is unimportant or even
that it is not a primary driver of fashion consumption. Rather the risk is that by
emphasising only this, we deny any space at all for efficiency considerations and how
these may also influence management decisions. As Wilkinson (1996: 435) suggests:
“Contrary to institutional logic, business organisations are tools. They are
designed to serve a purpose, and while institutional acceptability is likely to have
some influence (consciously as well as unconsciously) on structure, it is unlikely
that considerations of legitimacy will be overwhelming in the face of competitive
pressures which may threaten not just ‘institutionally defined success’ but the
organisation’s very survival”.
The risk of drawing so heavily on institutional theory is therefore that one is left
arguing that the rapid increase in demand for consulting products is exclusively the
result of client uncertainties and desire to demonstrate legitimacy.
Assumptions about structure and agency
More fundamental difficulties arise from the theorisation of structure and agency in
much of the fashion-based literature. Earlier we noted that a key strength of this
approach is the focus on the entrepreneurial role of consultants in shaping demand
and bringing about change. Structural conditions are also recognised as important.
This is especially in the work of Abrahamson (1996: 255; also see Abrahamson 1997)
who links the rise and fall of new fashions to ‘organizational performance gaps
opened up by real technical and economic environmental changes’. However the
dominant tendency is to downplay this kind of explanation. External structures are
often pushed into the far distance and seen as very loose or general constraints on
action. Hence, Kieser (2002: 180) will only concede that there is “something like a
general management discourse that influences the receptivity of managers to new
concepts, which come onto the market”. Because of this primacy is given to the
agency of fashion setters in shaping demand and driving change. Thus, Rovik (2002:
143) attributes the success of management ideas to ‘the process of definition and
presentation’. Indeed, in some accounts (notably those that have taken a more
discursive turn) the very ontological status of ‘structure’ itself is questioned. Kieser
(2002: 180) for example, asserts that, ‘there is no reality that can be perceived and
communicated outside language’, pointing to how even ‘business problems’ are
socially constructed. Clark and Salaman (1998: 157) go even further when they argue
that ‘guru activity…not only constitutes organisational realities, it constitutes
managers themselves’.
This tendency to downplay the role of the ‘defining context’, we argue, is problematic
for two main reasons. First, it may lead us to assume that management consultants
(and other fashion setters) have almost unlimited autonomy to shape reality. The
implication is that with the right techniques of persuasion and packaging almost any
management idea can be sold at any time, regardless of economic and technological
conditions. (As seen above, Rovik 2002: 143 explicitly excludes any role of the
Zeitgeist!). Also implied is that clients themselves are extremely gullible. From this
perspective consultants have the power to convince clients of virtually anything,
including ‘nonexistent performance gaps and…fantasy solutions narrowing these
imaginary gaps’ (Abrahamson and Fairchild, 1999: 734).
Secondly, without a full appreciation of the defining context, one is less able to
explain longer-term change. Focusing only on consulting strategy means that other
factors that stand partially outside this domain, which may affect the supply side or
give shape to client demands, tend to get lost or excluded from view. Thus, McKenna
(1995: 54-55) has linked the growth of management consulting in the mid-1930s to
the Glass-Stegall Act of 1933, which separated investment from commercial banking,
and SEC regulations. Banks no longer could offer consultancy-type services to their
clients or outside investors – creating a ‘vacuum’, which was filled by existing service
providers such as Booz-Allen & Hamilton and James O. McKinsey and Company.
Similarly, it has been argued that the recent boom in the management advice industry
has much to do with corporate restructuring and the wider shift towards capital
extensive firms (Ackroyd 2002; Ackroyd and Lawrenson 1996). This in turn has led
to a marked increase in outsourcing activity, generating new opportunities for
providers of business services (including consultants). But this kind of analysis,
although useful, is largely absent from the fashion-based literature. Instead the
tendency is to seek to explain change primarily as a result of consultant strategies and
discursive practices. Exogenous conditions are either pushed into the far background
or, worse still, denied any existence at all.
An alternative view: Critical realism and co-evolution
These limitations of fashion-based accounts are, we suggest, sufficiently serious to
call for alternative ways in which one might theorise change In what follows we
outline in general terms what such an alternative might look like, drawing on two
bodies of literature. First is critical realism, a tradition of social theorising that in
recent years has become increasingly influential in organizational analysis (Reed,
2001; Vincent 2005; Greener 2005). Second, and more specifically related to the
question of change is a mainly US literature on the co-evolution of organisational
forms (Lewin et al. 1999; Lewin and Volberda 1999). Our intention here is to first
map out the key elements of these two approaches and then look at how they might be
applied to a historical analysis of the consulting industry and its development over
time.
Critical realism has been described as a ‘third possibility’ for organisational analysis,
distinct from both positivism and post modernism (Ackroyd and Fleetwood 2000: 5).
At its core are a particular set of ontological assumptions, which state that that social
entities, or structures, (such as markets or gender relations) are ‘real’ and exist
independently of our investigations, or even knowledge, of them. Hence unlike in
much postmodernist thinking, critical realists do not assert that the social world is
entirely socially constructed and socially determined. Reality cannot be reduced to
‘accounts of reality’ (ibid.: 11). Nor is it assumed, as in much research with a
positivist (or in history, empiricist) slant that overarching structures exist only if they
can be directly observed and somehow quantified. Instead the focus is on how social
events are shaped by deep structures with causal properties that endure regardless of
our cognisance of them.
This emphasis on the constitutive role of structure should not be taken as a form of
determinism. Central to critical realism is the idea that while structures have causal
powers (or emergent properties) these powers may not always be exercised. Much
will depend on the particular historical context and on other countervailing forces that
mediate their influence (Sayer 1992). Added to this is the key role assigned to of
human agency in this approach. According to Archer (1995: 90) social interaction is
‘structurally conditioned but not structurally determined’. The focus is not on how
structures force people to act in particular ways (one must reject the analogy of ‘social
hydraulics’) but how the causal powers of structure are enacted and realised through
the ‘mediation’ of agents (ibid.: 195). Hence, what critical realism offers is a dynamic
account of how structures both constitute agency and are also reproduced and
(sometimes) transformed by it (Reed 2001: 215).
This understanding of the structure agency relationship is quite different from the one
implicit in the fashion-based literature described above. The emphasis is not on
‘untrammelled and unassisted creativity in which projects are designed in isolation
from the socio-cultural context’ (Archer 1995: 200). Rather, social agents are seen as
having capacities to innovate and bring about change, but only within the constraints
and opportunities afforded by the structural conditions they inherit. Critical realists
also differentiate between different kinds of agency. Some groups, with superior
resources, will be much better placed to take effective action and bring about either
the perpetuation of existing relationships or to induce change. In this connection,
Archer (1995: 258-60) distinguishes between what she identifies as ‘corporate’ and
‘primary’ agents. Corporate agents are organised groups (such as consultants and
other professions) capable of articulating their interests and able to engage in
concerted action to either maintain the status quo or re-model structures. On the other
hand Primary agents are so-called such because they are not strategically involved and
have the capacity only to reproduce the conditions in which they exist.
A final and, given our interests in this paper, crucial set of insights to draw from this
approach are with regard to how one understands change. In stark contrast to the
functionalist assumptions that underpin much contemporary institutional theory
(where the stress on system integration) critical realism asserts that flux and change is
the normal state of human affairs. In any social system - even those that may
experience periods of relative stability – tensions arise as a result of competing
interests and structural demands. Change also occurs as a consequence of the
interaction, over time, between structure and agency. According to Reed (2001: 216):
‘realist explanation is necessarily […] historical to the extent that it must
attempt to account for the complex interplay between “structure” and “agency”
as it works its way through reproducing and/or transforming the institutional
arrangements that temporarily precede them and the dialectical interaction
between them’.
Archer (1995) usefully describes this process as a morphogenetic cycle, involving
three (analytically) distinct phases of: structural conditioning, social interaction and
structural elaboration. The former relates to the context that predates action (or social
interaction) and establishes constraints and opportunities for it. According to Archer
(1995: 201) ‘emergent structures represent objective limitations upon the situations
and settings which agents can encounter’ shaping what resources are available to
them, their cultural beliefs and even perceptions of vested interest. However, as we
noted earlier, these structural conditions do not determine social interaction in a
straightforward way. Over time social interaction leads to the elaboration of
structures, either reproducing them (effectively maintaining the status quo) or, more
likely, modifying them in, largely unintended, ways. Hence, what is emphasised
above all in this approach is the importance of history and the dynamic nature of
social systems.
These ideas are not of course new and, arguably, have already influenced (if only
indirectly) a great deal of organisation theory (Ackroyd and Fleetwood 2000). One
example of this in the US, in the growing body of work focus ing on the ‘co-evolution’
of organisational forms (Lewin et al. 1999; Lewin and Volberda 1999). This approach
arose from a desire to reintegrate accounts of organisational change that emphasise
either selection (namely population ecology theory) or management adaptation
(strategic choice theory). The result is an attempt to account for the development of
organisational forms (or indeed of entire sectors) as a process of co-evolution in
which both environmental conditions and organisational adaptations are important
(Lewin and Volberda 1999). As in critical realism, the focus is on looking at the
interaction between different levels of analysis (organisations, markets and national
systems) and on investigating change over longer time periods. Considerable
emphasis is also given to path dependency and historical legacy in shaping the
development of organisational forms and sectors. Djelic and Ainamo (1999), for
instance, look at how pressures for globalisation in the world fashion industry (no
relation to the above) led to different kinds of responses in terms of organisational
change in Italy, France and the US. In each case structural pressures – for more
flexible patterns of organising – were mediated by organisations located within
national business institut ions and culture bound, management traditions. Hence, co-
evolution theory represents one way in which ideas, very similar to those articulated
by critical realists, might be applied in organisational analysis. The result is a more
satisfactory way of understanding historical change, one that focuses both on the role
of both corporate agency and founding conditions that shape and present opportunities
for that agency.
In the following section of the paper we use the development of the management
consultancy industry to illustrate how these ideas would help to explain the rise of
consultants and the changes within the industry in a long-term perspective.
Applying our approach to the development of consulting
We believe that the ideas introduced above are useful for helping to explain major
transformations in the consulting business as a function both of (a) structural
conditions, which opened opportunities for existing or new consultants to grow and
(b) the entrepreneurial activities of consultants themselves. The latter helped new
ideas to spread and, sometimes modified these ideas and, possibly, even the structural
context as a whole. In this section we will use some examples from the three waves
identified above to illustrate these mechanisms. For the structural changes that drive
the shifts in the management consulting business, we draw on existing studies of the
development of managerial capitalism (Chandler 1962, 1977, 1990; Whittington and
Mayer 2000; Fligstein 1990; Barley and Kunda 1992; for the dominant ideologies see
also Guillén 1994). While these accounts differ widely in their underlying
assumptions about the drivers of change, they show remarkable similarity in terms of
periodisation and the major characteristics of each period (see Appendix). We will
combine these with the literature on the history of management consulting to see how
consultants (some better than others) took advantage of new opportunities and, at the
same time, helped spread new ideas more widely – and how they eventually become
victims of their own success, once structural conditions changed again.
The first wave of consulting development (‘scientific management’) is clearly linked
to the emergence of the large-scale mass-producing manufacturing enterprise towards
the end of the 19th century (Chandler 1977) and the rise of engineers to positions of
responsibility (Fligstein 1990; Shenhav 1999). All this generated pressure for more
systematic organization of the production process and for new forms of control over
the large number of workers involved. This in turn created the opportunity for a new
type of consulting engineer, the so-called industrial engineer or efficiency expert.
There were a number of entrepreneurs exploiting these opportunities with new ideas.
Best know today is certainly Frederick Taylor – even if as a consultant he was not
particularly successful. Others include Henry L. Gantt and his famous chart
(popularised in particular by Wallace Clark) and Lillian Gilbreth, famous for motion
studies. More successful as businessmen were Harrington Emerson, whose firm
already had several offices within the United States by the turn of the century, and
Charles E. Bedaux. A relative latecomer – he founded his firm only in 1916 – Bedaux
managed to create the most important scientific management consultancy worldwide
by the 1930s, employing several hundred consultants (compared to McKinsey’s 11
employees in 1936).
What were the reasons behind his success? First, according to all accounts, he was a
tremendous salesman. Probably more importantly, he had a great capacity for creating
publicity, for example by organizing semi-adventurous trips through the Rocky
Mountains (‘Champagne Safari’) and the Sahara desert. (Incidentally, the negative
publicity due to his Nazi connections played an important part in his down fall in the
1940s). He also was excellent at building networks with important business people in
each of the countries where he operated; many of them sat on the board of his local
office (cf. Brownlow; Kipping 1999). He apparently managed to simplify the often
complex scientific management systems sold by his competitors. His system
standardized every task carried out in a factory (or an office) to 60B per hour, with
bonuses paid to workers achieving higher B values. This was not only highly intuitive
(an hour has 60 minutes), but also allowed managers to compare performances tasks
across a wide variety of tasks, allowing the system to be used in many organizations,
even those which were not strictly speaking mass producing. According to HBS
accounting Professor Thomas H. Sanders (1926: 19), this ‘elasticity of the Bedaux
system, its serviceability for general management purposes, as well as for technical
cost-accounting purposes, rather than its effectiveness as an incentive wage system’
was the reasons for its widespread application. Numerous articles in the journal of the
National Association of Cost Accountants (NACA) in the United States show indeed
how many companies used the system not only to reduce unit labour costs, but also
for cost accounting purposes.
Salesmanship was also behind the –temporary– success of another well-known first
wave consulting firm, George S. May. He literally bombarded potential clients with
letters extolling the virtues of hiring his consultancy, which experienced rapid growth
from the 1930s onwards, first in the United States and then abroad, making him one
of the largest service providers worldwide by the 1960 (cf. Table 1). But his promises
often went beyond what his consultants could deliver, which lead to complaints from
clients and even a number of law suits – creating bad publicity not only for himself
but also for consulting as a whole (e.g. Tisdall 1982). Another consultant, H.B.
Maynard took a different route to success, one that took more account of worker
resistance against being measured. His so-called Methods-Time-Management (MTM)
system established optimal working time and procedures under laboratory conditions
before applying it to the shop floor. This approach allowed Maynard and the Methods
Engineering Council (MEC) to be particularly successful in countries with strong
labour influence, e.g. in Scandinavia, making him the largest American service
provider in Europe well into the 1970s (Kipping 1999; cf. Table 1).
Once involved with clients, all these consultants would first try to install their systems
in the whole organization, which sometimes could take years, depending on the
number of factories and the number of workshops in each of them, and then update it,
whenever manufacturing technology or process had changed. The success of Bedaux
and the other firms prompted both spin-offs and imitation – again, spreading their
ideas more widely. Most scientific management consultancies started in the United
States, but expanded quickly to Europe and, often with the help of their multinational
clients, also into the colonies or former colonies, for example in the case of the ‘Big
Four’ British consultancies. But their fate changed when structural conditions
changed, leading top managers to focus less on operational matters. Since their modus
operandi in terms of their particular competences and their reputation were wedded to
optimising operational management, these consultancies gradually lost influence from
the 1960s onwards and most of them eventually disappeared. The opportunities
created by the new structural conditions were exploited by other consultancies from
the 1930s onwards.
Much of the literature on the evolution of capitalism sees the next major changes in
the inter-war period, but differs about the nature of these changes. Some others
highlight the rise of human relations ideologies, particularly from the 1930s (Barley
and Kunda 1992; Guillén 1994). Others point at organisational changes in the large
firms, namely the separation of strategic decision-making in a central office and
operational execution and control in product- or regionally-based divisions (Chandler
1962; Whittington and Mayer 2000). This so-called multi-divisional or M-form was
‘invented’ by a few large, diversified American companies, namely DuPont and GM,
in the inter-war period. It expanded more widely both in the United States and abroad
after the Second World War, before eventually ‘degenerating’ into conglomerates,
marked by unrelated diversification. Fligstein (1990) links these changes with the rise
of marketing and sales-oriented managers in the interwar period and finance-oriented
managers from the 1950s onwards. One could also relate it to the growing importance
of the MBA degree after 1945 (cf. Engwall and Zamagni 1998), promoting and
implementing the idea of general management (cf. Locke 1996).
In the consulting industry, these changes find their reflection, on the one hand, in the
formation of the first human resources consultancies, like Hay, in the 1930s. On the
other hand, and more importantly, they also saw the gradual rise of a new generation
of management consultancies, providing advice to top management on ‘strategic’
issues. Again, entrepreneurial skills played an important role in determining which
firms were well placed to take advantage of these opportunities. One of the early
innovators was Chicago accounting professor James O. McKinsey, who saw
budgeting as a new form of controlling the growing and diversifying enterprises
(Wolf 1978). He wrote a highly influential book on this topic in 1922 and established
his own consultancy in 1926. In the early 1930s he developed a standardized tool, the
so-called ‘general survey’ to allow his consultants to make an initial assessment of
any company. As mentioned above, he also took advantage of the ‘vacuum’ created
by the new banking regulation in the 1930s, offering his services to those who had
previously sought advice from their merchant banker. He even successfully asked
banks to provide him with introduction to their clients (McKenna 1995). Nevertheless
McKinsey remained somewhat stuck in the dominant tradition of consulting, linked to
existing professions like engineering and accounting. He also could not take his
consultancy further, since he left it in 1935 to join one of its clients and two years
later died of pneumonia.
The role to move management consulting beyond the realm of the existing
professions, to create its own professional identity (albeit modelled on the legal
profession), and to tie it firmly to top management decision-making fell to Marvin
Bower. Bower, who held both a law degree and an MBA from Harvard had joined
McKinsey in 1933. After McKinsey’s death, Bower and the other partners in the New
York office severed ties with the other offices and with the accounting and
engineering traditions, gradually building up what is still by many considered to be
the archetype of professional management –or rather strategy– consulting (cf. Bhide
1995, Edersheim 2004, Kipping and Kirkpatrick 2004). The cornerstone of this model
is the so-called ‘one-firm policy’: The whole partner group decides overall strategies
and policies, thus setting a fairly tight framework for the managers of each office;
new consultants become members of the firm, not of a particular office; and profits
are shared among all offices and partners. In the 1950s, the consultancy changed its
recruitment policy, taking advantage from the success of the MBA degree. Rather
than experienced executives, it hired recent MBA graduates who were charged out to
client firms at high rates based on the reputation of the consultancy as a whole rather
than their individual experience. They were also easier to mould into McKinsey’s
specific culture. Moreover, under Bower, McKinsey not only offered analytical tools,
like McKinsey’s general survey, but complete solutions. It actually became
instrumental in transferring the M-form to Europe, decentralising many large
European companies and equipping them with the planning and budgeting tools to run
a more decentralized operation (cf. Channon 1973; Dyas and Thannheiser 1976;
Whittington and Mayer 2000). The reliance on one major fashion proved
counterproductive in the long run. In the 1970s, when most companies had
decentralised their operations, ‘the phone stopped ringing’ (McKenna 2000).
McKinsey had to look for new ideas and tools to offer to their clients, also because its
success had generated a large number of competitors, often offering new innovative
approaches, such as the Boston Consulting Group and its portfolio matrix (Bartlett
2000). One could argue that it is around that time when the whole cycles of
management fashions started, in particular with the best-selling book In Search of
Excellence, written by the McKinsey consultants Tom Peters and Robert Waterman.
As mentioned, McKinsey was not the only consulting firm benefiting from the
structural changes. Other firms, such as Arthur D. Little, a chemical research
company founded in 1893 (Kahn 1986),.also expanded their activities from the 1930s
onwards. While focussing mainly on contract research this firm had always offered
some advice. This activity expanded in particular after the Second World War, when
the consultancy became heavily involved in using operational research as a tool for
planning and control. One of its former consultants, Bruce Henderson left in 1963 to
set up the Boston Consulting Group (BCG), which became very successful based on
the use of other decision-making tools such as the portfolio matrix and the experience
curve (the latter apparently originally developed during the Second World War). In
1973, a former BCG consultant, William Bain, set up his own firm, mainly based on
the idea to help managers learn by shadowing them during a limited time.
All of these consultancies and their tools no longer focussed on controlling the output
of (shop floor or office) workers. Instead, they helped top managers retain control
over their expanding enterprises and the growing hierarchies of middle managers.
Consultants clearly helped to spread this new management model worldwide. They
also contributed to its downfall, by pushing the idea that management was a general
skill that could be applied to any kind of activity, thereby fomenting the formation of
conglomerates. And they also participated in the eventual demise of conglomerates
and managerial hierarchies by selling tools such as Overhead Value Analysis
(McKinsey) and Time-Based Competition (BCG) that helped reduce ‘unproductive’
management and administrative staff. However, it was different consulting firms that
benefited from the change in structural conditions, which came about from the 1980s,
following the success of the leaner Japanese competitors and the assertion of
shareholder rights against managerial prerogatives.
To respond to these new structural conditions, companies became leaner, removing
many layers of management, and smaller, concentrating on their core competencies
and outsourcing the rest. To operate successfully, these companies needed tools to
connect and control both their internal departments and their external networks. Since
these were IT based tools, those who could take advantage of the new conditions were
the large accounting and audit firms, who were among the earlier users of large IT
systems, as well as the hardware and software providers. While all of them had
traditionally offered some form of advice to their clients, they became major players
in the industry during the 1990s, also attracted by the higher margins in consulting.
Rather than designing the new systems, which was done by companies like SAP or
Oracle, they helped clients adapt their organizations to the system requirements, train
their staff etc.
It is more difficult to identify the major entrepreneurs among this new generation of
management consultants. One could mention Serge Kampf of Capgemini and Lou
Gerstner of IBM. Kampf left the French computer firm Bull in 1967 to set up the
software, data processing and consulting firm Sogeti, which grew through a long
series of acquisitions to become the world’s fourth largest consulting firm at the
beginning of the 21st century (Gaston-Breton, 1999). Gerstner, a former McKinsey
consultant, was instrumental in changing IBM from a production to a service
company – a development completed by his success with the acquisition of the
consulting arm of PriceWaterhouseCoopers in 2002 and the sale of the PC division to
Lenovo of China in 2004. In general, what actually characterises these firms and
distinguishes them from those of the second generation is their systematic way of
generating and management knowledge. They do no longer rely on skilled
professionals, but on elaborate systems to capture, store and disseminate knowledge,
which allows them to hire young, inexperienced undergraduates and train them in-
house for the application of a standardised, but also highly specific set of blueprints
(cf. Kipping and Kirkpatrick 2004).
Given their worldwide presence (which predates their massive entry into the
consultancy business), these firms have been able to spread the new control
technologies (such as ERP) very fast around the globe. Since much of the structural
changes underlying the success of this third generation of consultancies are still
ongoing, it is too early to tell whether they will also fall victim to future changes.
The following table 3 summarizes the main results from this brief narrative, based
largely on the existing historical research. What it represents is an attempt to develop
a general illustration of how one might analyse change drawing on notions of critical
realism and co-evolution. The first three rows therefore relate to the structural
conditions that pre-date and contextualize the development of consultants. Here we
emphasise the nature of corporate firms and their organisation, the education and
orientations of clients and the availability of different kinds of control technology.
Following this the next three rows consider how consultants, as corporate agents,
were able to take advantage of these structural conditions, developing new tools and
methods of salesmanship to increase their influence. Finally we stress how, as a
consequence of this entrepreneurial activity, consultants played some role in
modifying their environment and generating client dependency.
TABLE 3 ABOUT HERE
Conclusion
Fashion theory, as we have called it in this paper, has made a very important
contribution to our understanding of the most recent growth of the management
consulting industry. It has highlighted the role of agency in developing and selling
new or repackaged ideas to unsuspecting managers, leading to a succession of
management fashions or fads. These have been observed empirically in the bell-
shaped curves depicting the growing and then declining popularity of these ideas.
Many authors in this literature suggest –at least implicitly– that these ideas have little
intrinsic value and only help consultants to maintain their own business. In this
scenario, managers benefit little if at all, possibly using the ideas to introduce
‘change’, and certainly assuaging their own fears of control loss (callously exploited
by the consultants).
This depiction of managers as gullible victims of consultants and other fashion setters
has been much criticised in the literature (Sturdy, 1997; Fincham, 1999). However,
there has been little attempt to provide an alternative explanation for both the growth
and the changes in the management consulting industry during the last century. Nor
have some underlying theoretical assumptions in this approach been questioned, most
notably those arising from institutional theory. In this paper our aim has been to
address these deficiencies. In doing so we have also tried to suggest an alternative
way of investigating historical change, We have tried to provide such an alternative,
arguing that critical realism can help explain both by introducing a more balanced
view between structure and agency. Based on this theoretical foundation, we have
drawn on the historical literature to show how consultants benefited from changes in
the structure of capitalism and, in the process of spreading management ideas about
management, also helped to modify them (albeit at the margins). This process, we
suggest, was not linear (as might be implied in the fashion-based literature) but rathe r
involved periodic restructurings of the ‘field’ of consulting itself. In each phase of
development successful consulting firms where to some extent victims of their own
success (locked into path dependent ways of working) and were unable to change
when structural conditions shifted again.
The narrative presented in this paper is of course limited in certain respects. Space
considerations mean that we have been able to talk only briefly about the structural
conditions that pre-figured the growth of consulting. Our narrative also focused only
on the most visible and most entrepreneurial consulting firms. What remains to be
investigated is how these changes affected the population of the firms in the
consulting industry as a whole. But these limitations aside what we have hopefully
been able to demonstrate in this paper is the usefulness of a different kind of
approach to researching change. What this involves is a need to recognise the
dynamic interplay between the corporate agency of consultants in developing fashion
and manufacturing demand and the broader structural context in which this activity
takes place.
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Table 1: Top ten global consultancies ranked by revenue (in million US dollar) 1973 16
3 1983 1,29
5 1993 10,57
6 2003 51,63
8
1 McKinsey & Company
45 Arthur Andersen
218 Andersen Consulting
2,720 IBM 14,900
2 Booz-Allen & Hamilton
18 Booz-Allen & Hamilton
210 McKinsey & Company
1,200 Accenture 8,909
3 Arthur D Little
18 McKinsey & Company
145 Coopers & Lybrand
1,126 Deloitte Touche Tohmatsu
6,075
4 Alexander Proudfoot
18 Arthur D Little
141 Ernst & Young
981 Cap Gemini Ernst & Young
5,394
5 Science Management
14 Towers Perrin Forster & Crosby
120 Mercer Consulting Group
908 CSC 3,170
6 George S. May
12 William M. Mercer
120 KPMG Peat Marwick
829 Hewlett Packard
3,100
7 H.B. Maynard
12 Peat Marwick Mitchell
112 Deloitte & Touche
825 McKinsey & Company
3,000
8 A.T. Kearney
11 Ernst & Whinney
85 Price Waterhouse
736 BearingPoint
2,368
9 Hay Associates
8 Coopers & Lybrand
79 Towers Perrin
641 Mercer 2,364
10
Cresap McCormick & Paget
7 American Management Systems
65 Booz-Allen Hamilton
610 LogicaCMG
2,358
Source: Consultants News
Table 2. Three Waves of Consultancy Development in the 20th Century
Consultancy Focus (Service Type)
Client Firm Type (Locus of Action)
Overall Duration Period of Dominance
Prominent Consultancies
Scientific Management
Production Unit 1900s-80s 1930s-50s
Emerson, Bedaux, Big 4, Maynard
Strategy & Structure
Corporation (M-form)
1930s-?? 1960s-80s
BAH, McKinsey, ATK, ADL, BCG
Information & Communication
Network Organization
1950s-?? 1990s-??
IBM, Accenture, Capgemini, DTT
Source: Kipping 2002
Table 3: Consultancy Development between Structure and Agency
Wave Scientific
Management
Strategy &
Structure
ICT-based
Networks
Period 1890s-1960s 1920s-2000s 1960s-
Structural
Changes
Firm focus Manufacturing Sales/Marketing Finance
Dominant Actors Engineers Managers (MBAs) Shareholders/CIO
Control
Technologies
Stop watch Punch-cards /
Mainframe
computers
PCs / Networks /
Intranet
Agency
Tools Time and motion
studies, payment-
by-results
General survey;
budget planning,
OVA
ERP, e-business,
CRM
Salesmanship Personal, heroic Professional Systematic;
Competence
Entrepreneurs Bedaux, May,
Maynard
McKinsey, Bower,
Henderson, Bain
Kampf, Gerstner
Modification of
structures
Control of workers
by managers;
‘Americanization’
Control of
managers by plans,
budgets;
‘Americanization’
Control over all
stakeholders,
including clients;
‘Japanization (?)’