Aston Business School Postgraduate Programme Business Essay

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"Here is an infallible rule: a prince who is not himself wise cannot be wisely advised.... Good advice depends on the shrewdness of the prince who seeks it, and not the shrewdness of the prince on good advice"

- Machiavelli (The Prince)-

There is a general agreement that strategy is a crucial and time consuming activity. It is supposed to lead an organization through changes and shifts to secure its future growth and sustainable success, and it has become the master concept with which to address CEOs of contemporary organizations and their senior managers (Carter et al., 2008). Hence its talismanic importance can hardly be overstated. Praise from researchers such as Barry and Elmes (1997) state that 'strategy must rank as one of the most prominent, influential and costly stories told in organizations'. This view may be due to it being a labour intensive activity that consumes hours, days, weeks and months of senior and middle management time. But there seems to be more to strategy than a senior management team scanning the environment, devising a plan and then implementing it. And there are those who argue (Clark, 2004) that managers are but one of a number of important 'actors' involved in the production of strategy and they state that we cannot continue with over-simplistic notions of strategy as being the sole preserve of a single elite group of individuals, and propose that if we are to amplify, extend and deepen our knowledge of strategy, we need to begin to conceive of it as a process built on an extended division of labour.

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In this review we attempt to analyse this line of argument by focusing on the 'external agents' of strategy, more specifically, the strategy consultants. It will begin by exploring the literature for the genesis for this line of thought; highlight possible importance of these actors; and highlight gaps, all with the aim of critically attending to the following research question, 'Do strategy consultants warrant more focus in strategy research?'

Strategic management is increasingly understood as the task of the top management team (Carter et al., 2010), and though there are other players such as the management consultants, shareholder representatives, auditors, investment bankers, and so forth, they are generally viewed as incidental and/or irrelevant with little direct impact on the character of strategies that emerge. Yet some claim these plethora of advice givers have had a critical impact on the nature of organizational life for many years (Kipping and Engwall, 2002), hence the description of strategy as a very intensive, and expensive, activity involving a full cast of players that extends well beyond the immediate confines of the management group within an organization (Clark, 2004). However, these other players within the strategy process seem to be ignored regardless of this purported importance, and presently little is understood of how they impact on and influence strategy.

The evolution of the strategy-as-practice (SAP) approach would seem to attempt to narrow this gap. Since it not only depicts strategy as an activity undertaken by people (Jarzabkowski, 2004), but also claims to acknowledge these external agents by its emphasis on 'actors' and 'actions'. Its view of strategy is as the stream of goal oriented activity over time contributed to by actors at different levels and which is consequential for the survival, reputation, and profitability of the organization (Jarzabkowski, 2005). Even Johnson and his colleagues (2007) further state that SAP is concerned with what people do in relation to strategy and how this is influenced by and influences their organisational and institutional context. Hence we understand the approach to be on practice (i.e. the activity that incorporates strategy); practitioners (i.e. the people/actors who do strategy); and practices (i.e. the tools these actors use). And we would expect that these external agents such as the management gurus, consulting firms, business schools and management academics, and so forth would all be studied as 'actors' of strategy, since strategy is shaped by a broad, plurality of influences (Jarzabkowski, 2004). However, the very stance of the sap approach has made it vulnerable to great criticism. First of all its ambiguous relationship with well established conservative notions of strategy has been greatly challenged by David Knights (2002) despite the stance of SAP researchers, for example the arguments that their micro perspective is able to improve on the weaknesses of the RBV through the 'value generated' (Johnson et al., 2003:6). Secondly, most publications in the SAP area start from premises that share a more managerial perspective. Hence though it proposes to make more sense to practitioners than older approaches, there are claims that the deliverables of the new and old approach are the same (Carter et al., 2010). And more importantly, by focussing on the current elite, the approach is implicitly conservative and therefore it does not seem to emphasize the ways in which outsiders to the organisation might influence strategy in practice (Hamel, 1996). Hence, our observation is that despite the SAP perspective on 'actors' this gap remains wide open.

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But the question to ask is 'Why should we focus on these strategy consultants'? We are aware that some external agents have been in existence for as long as the modern corporation (Kipping and Engwall, 2002). Strategy consulting, for example, was the prominent form of consulting activity as far back as between the 1930s and 1980s (Kipping, 2002), and the activities of these firms have had a considerable impact on the nature of the bets that managers place on the future, the supporting investment, and the consequent directions that organizations have followed (Clark, 2004). However, especially more recently, strategy has also had its failures and is now generally observed as a terrain very much to be contested. An example case is the world's biggest bankruptcy, Enron, an important client of the world's most influential and prestigious strategy consulting firm, McKinsey & Co. (Fusaro & Miller, 2002) and who also drew support from prominent strategy gurus (Eisenhardt & Sull, 2001; Hamel, 2000). Indeed now there is no shortage of books criticising strategy consultants for example Rip Off , Dangerous Company and Con Tricks to name a few (Johnson et al., 2008). And the field of strategy, once the stable and long-term visionary bastion of corporate strategists with their positioning and analytical models, is today in something of a crisis (Wilson & Jarzabkowski, 2004:14).

Despite this chaos, managers are still generally viewed as independent, self-sufficient agents with singular and absolute control over the process of strategy development and implementation. Hence just 'How important are these strategy consultants anyway'? 'Why do some researchers call for increased scrutiny'? Indeed, we are aware of the immense praise for the strategy consultants. Many researchers (Whittington et al., 2003) insist that we should be under no illusion as to their influence since it is the ideas produced by this community that have come to dominate contemporary notions of the strategic ideal. Some have more formally state that;

"Consultancies contain powerful knowledge creation/management systems that support the generation of management knowledge that can be converted into commodified and commercial products. The outcome of these processes may be that a consultancy either 'builds a coherent arrangement of well-elaborated techniques around a leading mode' or 'builds up a collection of different, loosely coupled and multi-purpose tools that enhance flexibility and support the handling of a range of organizational problems" (Heusinkveld & Benders 2002:3)

Hence we also concede that consulting firms are both significant consumers and producers of management knowledge and their outputs govern to a large extent what is valued within the strategy field. However, we argue here that, consultancies are fundamentally in the business of producing 'boundary objects' (Star & Griesemer, 1989) and the resulting package is often reduced to a number of broad principles that lack situational precision since they remain ambiguous and vague (Clark, 2004). And this is possibly due to their desire that the consultancy knowledge is highly adaptable and applicable to different communities, to ensure the broadest range of clients. But, this may be the root of the many harsh accusations directed to consultancies. One of which is that they are perceived as expensive, overpaid individually and always trying to sell on unnecessary projects (Johnson et al., 2008).

Another major criticism is that they rely too much on inexperienced young staff fresh out of business school who typically have the slimmest understanding of how client organisations and their markets really work (Johnson et al., 2008). But researchers claim that it is too simplistic to argue that they only draw upon the ideas that gurus create, since many consultancies are in the business of positioning themselves as 'thought leaders' by actively creating in-house gurus (Clark, 2004). They further state that especially the larger firms such as the 'big four', in addition to niche firms such as Bain, McKinsey, Monitor, Strategos have significant research capacities and systems of personal development, which enable them to develop proprietary products that contain powerful and influential notions of strategy. And because they are now organised on industry lines and build up expertise in particular areas, they also draw upon the individual experience of consultants with clients for the benefit of the whole firm (Werr, 2002). And they increasingly recruit experienced managers from these industries. They also seem to incorporate what is described as a 'people to documents approach' whereby experience is 'extracted from the person who developed it, made independent of that person, and reused for various purposes' (Hansen et al., 1999).

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On digestion of all the statements above, we do concede that the strategy consultants do have some, if not huge impact not only in determining the repertoires that are made available to academics and practitioners, but also the choices that are deemed legitimate (Clark, 2004). However, when considering their presence in strategic management research we then ask the question, What areas of strategic research would benefit from the increased scrutiny of strategy consultants? Clark in his paper identifies these external agents and depicts them as key actors within the management fashion-setting arena and their relationship. He also highlights three areas for future research as; Who does what? Is external advice a source of competitive advantage? And, what is the nature of the output from the management fashion setting arena? (ibid)

Clark (2004) begins by highlighting that there is voluminous literature on the nature of the consulting industry, its history, and prescriptions relating to the management of the client-consultant relationship as well as an emerging literature on the management guru phenomenon, however, there is presently a void with respect to the role of the members of this arena in strategy. He argues that by casting an intensive light on this system of actors, we will become more cognisant of the ways in which strategy emerges as the result of a series of collaborative relationships with a number of usually unseen heads and hands. This line of thought is related to the SAP approach where the focus is on strategy actors and the actions they undertake in the production of strategy. However, we would comment that for this to actually be of benefit to the research arena on strategy, SAP researchers would have to look beyond the confines of the management team. There are other players that contribute hugely to the strategy process that are presently ignored. Even Whittington (2003) asks, what is the role of other groups, such as conference and workshop organizers? Hence we are of the opinion that researchers should focus more on linking all the actors of strategy making, asking for their roles and how they relate to one another.

The resource-based view of the firm is widely popular and Barney's (1991) has been called by some (Barney et al., 2001) the most influential framework for understanding strategy. The main argument in this article is that competition has become so fierce that a sustained competitive advantage can only be derived from rare, imitable resources of the company that are not imitable. Hence we share the same opinion with Clark (2004) that when examining the role of external agents in the strategy process, researchers need to consider whether the use of these external resources contributes to a firm's competitive advantage. Because it really would be interesting to figure out and value the contributions of these external agents as well as to determine the extent to which these firms generate and sustain their own resources and capabilities.

With regards to the nature of the output from the management fashion-setting arena, Clark (2004) states that the there is a critical need to examine the nature of the outputs of these external agents. Researchers state that especially the strategy consultants, represent a central feature of communication in modern society, the pre-eminence of the image (Kellner, 2003). They are successful actors, trained to capture managerial attention by producing ideas and techniques in which image predominates over substance (Clark and Greatbatch, 2004), and these ideas are manufactured contrivances that are designed to have maximum impact on the intended audience and so gain a broad appeal. Indeed, we have observed that the contents produced are presented as a 'spectacular and glittering universe of image and signs' (Best and Kellner, 1999). Here Clark (2004) indicates that if we are to better understand the impact of ideas and the choices that managers make, we need to move away from a focus on rational explanations and start emphasizing the aesthetic, by asking questions such as to what extent are they viewed as beautiful or ugly and how does this impact on their selection? However we fail to understand the specific resear ch direction or benefit that the researchers propose here. There is already a lineage of literature (e.g. Abrahamson's 1991; 1996; 1996b) that is concerned with identifying and explicating patterns in the life cycle of the management fashion discourse. Hence we fail to understand the benefits that are proposed by this specific focus.

As Whittington (2007) notes in a piece of Organization Studies, the time has come for SAP approaches to mature. And we agree. In our opinion an increased focus on external agents, especially the strategy consultants would add a more colourful aspect to the study of strategy. However care must be taken, as there is the problem of adding more ambiguity to an already ambiguous concept. At present the SAP researchers have adopted an unclear and contradictory path. As Elena Antonacopoulou (2007:1292) has written, 'the richness in perspectives informing social practice could also account for the lack of clarity concerning practice'. Indeed they have failed to identify the 'distinctive' contribution of their approach (Carter et al., 2010: 106). Thus though it has been argued that the strategy consultants have a critical, if presently neglected, impact on the nature strategy, we propose that a clear direction and agenda be outlined, or else we run the risk of producing yet the same implicitly conservative results, the benefits of which are widely challenged.

In conclusion, in this review we attempted to identify the presence of these external agents with special focus on strategy consultants and highlighted their purported importance and failures in strategy practice. We then discussed gaps in SAP research and analysed the possible benefits of the inclusion of such actors in future research agendas. Hence we would lie to agree with Whittington (2003) who states that we need to pay attention to the actual practice of strategy, what he refers to as the 'labour of strategy'. However we insist that we need to desist from our current understanding of strategy as something done only by strategists, only when they are explicitly doing strategy (Carter et al., 2008). And hence therefore concede to the propagation of the following hypothesis that; an increased focus on strategy consultants in strategy research would be a step towards extending quite easily and productively the SAP agenda.