What are the reasons for the rise of external management consultancy as presented in the course literature
(e.g. Hodges (2017) chapters 1 and 2, Lapsley & Oldfield (2001), Werr & Styhre (2001) Craft & Howlett (2013))
Four reasons Explained.
The external consultancies continue to rise in demand for various reasons, as presented below:
External consultancies exhibit powerful technological capital. Owing to the specialization kind business which the consulting firms assume, the firms build equity to offer expert services and analytical tools. Seemingly most companies lack the time and knowledge skills to develop in-house consultant capabilities, which leads them to opt for external services (Hodges, pp. 59, 2017). Research indicates that the essence of globalization has weakened the perceived capacity of the public sector to address the modern-day policy challenges (Hodges, pp. 60, 2017). As such, the demand for internals consultancy services has gradually declined and hence heightening the need for outside consultancy services. (Craft, & Howlett, pp. 190, 2013). Further, with the concomitant trend to experience high demand for external consultancies, the managers have paid careful attention to increasing their professional expertise to meet the competency and technological standards required (Hodges, pp. 59, 2017). Notably, clients have extensive experience in consultancy. As such, most of them have a comparative perspective of the prominent consulting firms and hence tend to eye on them for such services. The competent public image of some large firms necessitates the need for more companies to seek for their services (Hodges, pp. 59, 2017). According to Craft, & Howlett, pp. 190, (2013), the progressive public sector reforms have eroded the public sector’s capacity to offer timely advice. Further, an increase in the supply of policy systems initiates a vast demand for external policy advice.
What perspective (either functionalist or critical) is most vividly put forward in the article of the Guardian? Elaborate on your choice.
The article puts forward the functionalist perspective more than the critical one. The functionalist perspective presents a less biased basis for both the consultant and client to choose the service. In this case, the consultant is independent of the client and hence views organizational issues objectively without internal power struggles (Werr & Styhre, pp. 48, 2002). As such, the consultant sees the client’s firm with “fresh eyes,” hence avoiding potential influence to make decisions in generating objective information (Werr & Styhre, pp. 48, 2002). Contrary, in the critical perspective, the client’s dominating image in the functionalist perspective is reversed by becoming mostly naïve in making decisions. In this case, unlike in the functionalist where the client makes informed decisions, the critical perspective dives the client into a naïve victim of the consultant’s influential impression skills (Werr & Styhre, pp. 48, 2002). In this regard, the article acknowledges the functionalist perspective as a better approach to hire consultancy services due to the trustful cooperation presented in the client-consultant relationship. Further, in this perspective, the consultant is cautious to consider the professional, social, and psychological needs of the client to avoid a possible breach of contract.
Argue which one of the two perspectives reflects in your view most accurately the position of management consultancy in the public sector. Use at least 3 articles/book chapters from this course in your answer.
The public sector is largely dependent upon by the citizens to provide essential services. As such, managing consultants play a great role in transforming the public sector functionalist perspective is seemingly the most appropriate position of management. Value creation in management consulting is a vital aspect of the public sector. The functionalist perspective entails a clear definition of content, contract terms, and duration of the relationship which, aids in eliminating any possible hidden agendas of either party. In this regard, a mutual understanding of the scope, fee arrangement, work plan, and objectives is established before engagement in a contract. (Werr & Styhre, pp. 47-48, 2002). In this regard, both parties experience transparency and clarity of the contract terms and hence ensuring that contentment is attained. A simple mess in the public sector dealings can primarily affect the dire citizens, and hence transparency is critical in every kind of service provided or received. As such, while a critical perspective largely depends on the client’s knowledge insufficiencies, which leads to reliance on the influential capabilities of the consultant, functionality is a better option because the client makes informed decisions.
Use insights from both Hodges (2017) and Bromell (2017) write a nuanced statement about the acceptability of risk-and-reward contracts in public management consultancy, as described in the article in the Guardian.
Currently, the increase in external consultants is undeniable, and hence the acceptability of risk and reward contracts in public management consultancy. The establishment of consultation firms has initiated the ‘gig’ economy, which offers credibility in quality assurances through user recommendations and ratings (Lapsley & Oldfield, pp. 540, 2001). Management consultants play a key role in establishing public policies. While the public entails, political, economic, and social concepts, the need to establish policies that fulfill the public interest is paramount. Therefore, the functionalist perspective is a vital consideration to establish long-term public interest, subjecting the participating parties to equal chances of risks as well as rewards. In attaining a fair go objectivity, the public management consultancy ought to adopt the functionalism perspective whereby both the consultants and the public organizations have the opportunity to evaluate possible benefits and risks. In this concept, the interests of both parties are fairly considered. Further, as Bromell, pp. 10. (2017), claims that in the critical perspective, the concept of scapegoat is considerably profound, whereby the risk is largely imposed on the client who ‘ignorantly’ falls in the trap of the consultant’s influential impression. On the other hand, the consultant receives the greater award since, even if they lack sufficient management skills, they benefit from the insufficient knowledge of their clients to win contracts (Bromell, pp. 12, 2017). The current emergence of the freelance consultation firms which lack a geographical location poses a biased risk in establishing a long-term relationship. As such, this can only be considerable factor in the concept of the scapegoat.
References
Bromell, D. (2017). The art and Craft of policy advising: A practical guide. Springer.
Craft, J., & Howlett, M. (2013). The dual dynamics of policy advisory systems: The impact of externalization and politicization on policy advice. Policy and Society, 32(3), 187-197.
Hodges, J. (2017). Consultancy, organizational development and change: a practical guide to delivering value. Kogan Page Publishers.
Lapsley, I., & Oldfield, R. (2001). Transforming the public sector: management consultants as agents of change. European Accounting Review, 10(3), 523-543.
Werr, A., & Styhre, A. (2002). Management consultants-friend or foe? Understanding the ambiguous client-consultant relationship. International Studies of Management & Organization, 32(4), 43-66.