The Management Consulting Industry Business Essay
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Published: Mon, 5 Dec 2016
There are two approaches in strategy development; the intended strategy approach and the emergent strategy approach. Strategies indentified in MacFarlane Solutions are developed using the emergent strategy approach. The process of this approach involves creativity and intuitions through cumulative day to day routines and activities (such as Bill’s expertise and its passion about new technology) which determine the decisions that eventually become the long term direction of the organization. Seeing that creative strategic thinking is the stronghold of Macfarlane Solutions due to the vision of a single leader – Bill and adaptable to new opportunities, it cannot be applied to practice after Bill’s retirement because there is no clear set of tools and strategy framework that the management team can use.
Hence, strategy can be pre-planned in Macfarlane Solutions as suggested by Rigby and Bilodeau (2007) that strategic planning is one of the most essential management tool in strategy development. The intended strategy is a strategy that is planned in advance and monitored closely by the organization and it begins with an intention or an idea, a plan is then developed and communicated (Ocasio and Joseph 2008). On the other hand, due to today’s dynamic environment, there are frequent changes in the practice of the intended strategy approach where managers find it difficult to rely solely upon the planning process and eventually it is often misguided. The underlying principle for this is the lacking of flexibility and openness of the intended approach that is vital for responsiveness and improvisation in today’s ever changing environment.
In addition, Bill’s autocratic leadership style as identified in the case study serves as a barrier to the intended strategy approach and the stability of the management team in MacFarlane Solutions. The term stability here refers to the ability of the management team to operate as an intact system in the long run (Arrow, McGrath, & Berdahl, 2000). The rationale for this is because there is less contributions and participations in strategy development with an autocratic leader allow free riding on the efforts of others. According to Tyler & Smith (1998), there are possibilities that team management may not want to belong to the autocratic led group because they want to contribute more inputs in decision making. This is demonstrated by the feedbacks from Graham Smith and Bill’s nephew – Pete that they enjoyed the workshop conducted by Dr. Jane where there are high involvements are implicated.
For that reason, it is suggested that Macfarlane Solutions need to find a balance between these two strategic perspectives rather than the perfect form of either. By integrating these two strategic approaches, it forms the boundary of a continuum along which has the potential to set the groundwork for an innovative and integrative concept of strategy creation (Mintzberg and Walters 1985, Birkinshaw, Hamel and Mol, 2008). Therefore, the framework of strategy development process in MacFarlane Solutions needs to follow 4 major requirements:
Multiple options: The team management of MacFarlane Solutions needs to explicitly consider strategic alternatives in order to account for the ever changing environment and prepare for future possible developments.
Multiple perspectives: The integration of intended and emergent approach need to consider various viewpoints and inputs from the stakeholders of MacFarlane Solutions for the purpose of overcoming existing inertia.
Systematic tool based process: The integrative strategy approach needs to be clear a set of tools and strategy framework that the management team can use, for example after Bill’s retirement.
Flexibility: The integrative strategy framework must be adaptable to different types of context.
The integration of the two strategic perspectives can be demonstrated via the scenario planning that has the potential to lay the basic of the abovementioned requirements and will be discussed in question 2.
The configuration of MacFarlane Solutions plays an important role in succeeding the integration. Therefore, the decentralized structure in particular – delegation can help increase the distribution of power in decision making by creating a semi-autonomous where the management team have some substantial practices and contributions at making decision but ultimately accountable for it. According to X (2), a decentralized structure tends to be more agile in decision making, and the decisions made are more customer oriented by which fulfill Bill’s requirement in the process of decision making.
In addition to that, decentralized structures not only facilitate in succeeding the integration of two strategy approach, but also to serve as a learning organization. According to Minzberg (1983), a learning organization tends to be flat and flexible organization and preferable to one that is tall centralized bureaucratic structure. Therefore, shared vision by Bill to his management team is important so that everyone knows the preferred direction of the organization. In this way, organization learning is precondition for a learning organization, because each member in the MacFarlane Solution’s team management learns to be more accountable in reference to making decisions in the interest of the organization and not only the employee’s. In addition to that, strategy development in the field of learning may be formal and explicit, but it also may well include the informal and implicit part of wider strategies for the Macfarlane Solutions such as its culture and people management approach.
As the management consulting industry in today’s business has been growing steadily in the development strategy of organizations such as Boston Consulting Group and McKinsey & Co over the last decades (Kieser 2002, Werr & Styhre 2003, Susanne 2008) it has come under strong criticism from both academic and business journalists (Craig 2005, Kihn 2006, Klenter and Mollgard 2006). Reasons for failure are recognized as consultants deserving the blames such as consultant do not listen, incompetent, not understanding the business and failure to deliver results. Nevertheless, in the case study of Macfarlane Solutions, the state of affairs where consultants are often to be blamed for consulting failures are no longer just a one party’s fault when in fact it is both the consultants and the clients of the consulting process are mutually accountable that is eventually at fault (Appelbaum 2004 and Mohe 2005).
The consultant-client relationship in the case study is developed unsteadily due to several reasons such as the personal characteristic of the consultant and client (such as lack of skills), bad consultant and client relationship (lack of communications) and sociopolitical factors of the client’s organization. There is tendency that the clients are considered as the passive part and the consultant should play the active role in a consultant-client relationship because consultant fails to adapt to the individuality of the client’s perspective. The underlying reasons of this is due to the lack of skills such as the consultant’s expertise or often known as the “know it all” attitude, consultants often develop approaches based on their experiences without in actuality understand the situation. For example, Bill was left out and considered the passive part when Dr. Jane believed that the solution should be solely meeting Bill’s criterion that is to involve more people in strategy making process, without looking sufficiently beyond her expertise to determine if there were other issues-area related.
The consultant-client relationship is more than just simply a personal relationship albeit it is often seen as a direct communication from the consultant to the client. According to Luhmann (2005), the concept of communication is not only mutual understanding and shared meaning of the two parties but also to include mutual inputs. This is because the relationship between client and consultant belongs to two different communication systems and cultures where each party has its own communication system. Therefore, Luhmann (2005) introduced the third communication system that is the gap between the two parties where consulting no longer treated as an one way flow of input-output relation where the consultants provide solutions only but also to understand the consulting interventions. For instance, instead of creating a summary report to Bill on the various outcomes and idea from the management level, Dr. Jane should inquire inputs and feedbacks from her client – Bill. There are possibilities that Dr. Jane is able to identify another issues-related area from the feedback such as Bill’s real requirements. In addition to that, seeing that Bill have decided to retired in two years time and appointed a new CEO in his mind, it can be assumed that Bill wanted direct involvement in decision making. Involvement can be differentiated into two categories according to Marchington and Wilkinson (2005) that is direct involvement and indirect involvement in which Bill need to seek clarification on how the consultant will operate where he should understand the consultant’s approach and methods of operations and address this requirement to the consultant at the first place.
The scenario planning adopted by Dr. Jane is an essential tool in helping policy makers and managers encounter strategic decisions due to uncertain future outcomes, however a contradiction to the nature of how strategy are developed in MacFarlane Solutions – the emergent strategy development. The blend of the agile emergent strategy development and Bill’s autocratic leadership style leads him to do whatever he feel that is necessary to deliver the common good and require its members to contribute without asking for input (Arrow, McGrath, & Berdahl, 2000).
Therefore, Dr. Jane should make clear that two different strategy perspectives – intended and emergent strategy can be integrated in the scenario planning approach. The underlying principle for this is (1) intended strategy requires from theories of strategy development based on incorporated creativity that allows intuition, hence enabling existing assumptions to be challenged by innovative strategies (2) which is similar to intended strategy if the strategy development process consider multiple strategic choices rather than one ‘best’ strategy (Grant 2003, Schoemaker and Day 2009). Next, Dr. Jane can adapt to the nature of MacFarlane Solutions and transform the scenario planning from an indirect form to a direct form of scenario based decision support which ultimately leads to a strategic planning approach as supported by Parson et al. (2007) and Volkery and Ribiero (2009).
The indirect form of scenario planning that relates to the early stages of strategy making such as participation of managers and open-minded discussion is instituted similarly to the case study as Figure 2. Hence, instead of having more strategic alternatives as an end output, the direct form of scenario planning require the output of more specific and targeted information on strategies in queries, eliminating less plausible alternatives and focus on the most optimistic ones. In reference to Figure 2, Dr. Jane should focus on the most direct form of scenario based decision support that is ‘appraising robustness of options for future action’ rather than ‘stimulating a wider debate about possible futures’. Even though it is arguable that one best strategy will be eventually selected as the output in the case study if the workshop continues, however the distinct of the scenario planning as thinking framework and learning framework should be addressed by Dr. Jane. Therefore, through demonstrating the consequences of a respective choice made, the direct form of scenario planning serves as learning framework targeted to evaluate real life strategy and projects (Coates 2000). The ultimate value of the amended scenario planning does not emphasize that much in the creation of scenario but the discussion of the consequences (Bishop, Hines and Collins, 2007).
It can be concluded that the consulting approach adopted by Dr. Jane comes from a constructivist and classical position tends to be less directive and provide less information that results in the process of explorations as indentified in the case study where interviews with the management team are carried out. Using the exploration process, the requirement of the client is obtained through interpretation and information sharing which deserting away from identifying and fixing the real problem. Therefore, it is essential for Dr. Jane to find the common ground for the two distinct systems as abovementioned and consultation process should commence only in the common ground of the contact system. At such, the challenges in finding the common ground of the consultant-client relationship can be achieved by using the naturalist associated with the narrative approach. The naturalist approach to interviewing differs from the constructivist approach because more probing questions are used by Dr. Jane during the interview such as:
What are the people doing in MacFarlane Solution’s strategy development?
What are the experiences the team management of nine had of undergoing the emergent strategy development?
What does this mean to them?
The CEO of MacFarlane Solutions – Bill should not be excluded from the above assessment as well. By practicing the naturalist approach, circular questioning can assist Dr. Jane to identify vital non-obvious and indirect information of the client system (such as the nature of emergent strategy, autocratic leadership and more direct involvement) that ultimately allow new ways to act in supporting problem definition. It is strongly stressed that communication is the key factor to the succession of a consultant-client relationship and its consulting process, therefore one consultant, as suggested by Wrzesniewski et al. (2003) and Peavy (1992) should keep in mind that the meaning-making factor is significant before consultation process can take place. The consultant must first ask itself, “How can I assist my client to elaborate and evaluate its constructions and meanings of interest to their decisions?”
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