3 Thing to Know About Management Consulting

By Gyungbin Lim - Korean Minjok Leadership Academy - NextGenVest Club President - South Korea

If you have any hardships on managing a group or corporation you are in charge of, management consulting might be what you need.Did you have any trouble leading your group or making your own brand popular? Asking advice to management consultants is a resolution to overcome all the difficulties because they are the people who are 1) knowledgeable about the topic 2) well-connected within the industry 3) have an esteemed reputation and brand, and 4) are effective communicators. What these consultants do are called “Management Consulting.” Management consulting means the action taken to help organization to improve their performance, diagnose their structural problem, and overcome their difficulties for further development. Some of the prevalent management consultation corporations involve SJO analysis, Clarexec Business works, Pipeline management group, etc. Here’s a Q&A section which might help you to comprehend basic concept of management consulting.

What is the function of management consulting?

Main task of management consultants is to connect information and knowledge, so that clients can take these bridging service more economically. However, since consultants have specialized skills on tasks which require high cost, there are shortcomings of hiring consultants. We can deduce that hiring management consultants won’t be a wise decision unless anticipated increase in income surpasses the cost of hiring management consultants. Plus, their additional value of information and knowledge which function as bridges to connect each countries will cause additional effect and trigger economics of scale. (Network externalities will be triggered and there are infinite possibilities which proliferation of knowledge will occur.)

What is the current tendency of management consulting?

As the time passes by, management consultancy becomes more prevalent in not only in business area but also in non-business fields. Because most of the organization in these fields are adopting the measure of management similar to the business group. 21st century was the watershed of segregating consulting and accounting units. To name a few corporations of the public sector which adapted management consulting, there are Deloitte, Ernst & Young, PwC and KPMG. The corporations elaborated the organization through management consulting. On the other hand, the reverse phenomenon is occurring nowadays; corporations are making subsidiaries which also provides management consultation on themselves.

What are the advantages and disadvantages of management consulting?

Like as I mentioned previously there are several advantages of taking management consulting from the subsidiaries. First of all, internal consultants can be the splendid guider of a project because they are familiar with dealing them, secretariat who can keep corporate information private, and recruit and develop potential senior managers. Like a coin, there are also disadvantages of keeping internal management consultants; internal consultants can have subjective inspection on structural problem compared to external management consultants because they are also members of the corporation, candidates of management consultants won’t be recruited enough in the case of corporation with high consulting compensation, corporations can have hardships on estimating true profit which can be triggered by internal consulting group.I hope these questions and subsequent answers help you to understand concepts of management consulting and decide on whether to have internal consultant or external consultant, hire management consultants or not, predicting possible advantages and costs brought by them.