The role of Business Consultancy in contemporary Business


Consulting is the business of providing advisory services to the leaders of an organization and consultants are the problem solver who has expertise and outside perspective of dealing with a problem. The objective of this essay is to discuss the role of the consultant in client's decision making process. The critical analysis will focus on every aspect of the consultant's responsibility as facilitator in the decision making process, aiming to demonstrate the practical knowledge of theories and models learnt all over the module. Furthermore, a deep analytical discussion will be embedded throughout.

Report will start with the definition of consulting and the role of consultant in contemporary business followed by the consultant and client relationship. Thereafter, the role of a consultant as facilitator in client's decision-making is explained. Before discussing the factors that influence decision-making in organization, the process of decision-making and the decision-making unit is elaborated. After this the appetite for decision-making will lead to the explanation of change process. Finally the importance of communication to deliver change and the responses of individuals will be considered.

2. What is Consulting?

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Consulting is the business of providing expert advice to clients in return of fee to help them solve their problem within particular area of business (Salmon 1995). Consultants are the individuals having expertise as well as the ability to apply that expertise to practical problem solving. Koch consulting explains that the role of a consultant is to assist management in the diagnosis of the problems, formulate factual information, recommend optimum solutions and help in implementation activities (2009). Consultant involves experienced professionals who analyses client's situation using the data provided and information obtained and relates the situation, potentialities and business attitude to practical and action based solutions to arrive at the most economical and viable recommendations.

Wickham articulates consultants as information providers who give information to management. This "information is used to analyze possible courses of action and then to justify the decision eventually" (Wickham 2007).

3. Consultant- Client Relationship

According to Sobel, client relationship is a non-mechanical process of managing clients. As per his statement "it is a system of strategies and methods, led by a senior relationship manager, for engaging with client executives, building trust, adding value, and bringing to bear the best people, ideas, and resources your firm can offer in order to help the client achieve its goals" (Sobel 2007).

Client wants a relationship with a trusted consultant and a consultant earns trust by proving concern for, insight in and knowledge of the client's business. Therefore client expectations seem to be core concern for a consultant.

From client expectations perspective, consulting can be viewed in a three phase model. The phases in 3-D model are:

Discover: phase in which client expectations are unearthed Define: phase in which expectations are given shape, form and boundaries Deliver: phase wherein activities are performed to meet the expectations (Khosla 2004)

In order to build healthy client relationship and to support client in making right decision, consultant must understand the factors influencing decision making in an organization.

4. Consultant as Facilitator

Facilitator is an individual who helps to manage a process of information exchange. According to Bob Kelsch of Xerox Corporation, facilitator means "Guiding without directing; bringing about change without disruption; knocking down walls which have been built between people whilst preserving structures of value... and, above all, appreciate people as people. All of this must be done without leaving any fingerprints". Facilitation approach is usually recommended when the organization is concerned about the way decision is made and not merely what decision is made.

Therefore according to Institute of Cultural Affairs, Canada, a consultant needs to posses following skills as a facilitator:

Knowledge of problem solving and process redesign techniques and practical experience of implementing them

Excellent communication skills to communicate at different levels in the organization

Training skills to deliver messages to employees

Good listening and questioning skills to know the root cause of the issue

Acting as a counselor than a sergeant and mentor than a scientist and

Ability to keep focus on the 'big picture' while delivering the change

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As facilitator, a consultant must explain the process steps to the client organization and must stick to the process with some room for flexibility.

5. Decision Making Process

Decision making is a cognitive process of selecting a course of action amongst several alternatives. Henry Mintzberg (1979) said that organizational decision-making is making a commitment to action. Decision making is an important skill that managers must possess and every manager is expected to make the right decision. Since corporate decision making process is of utmost importance for effective management, the process of decision making is informed by expert knowledge and experience (Heller and Bono 2004). Baker et al (2001) says "efficient decision-making involves a series of steps that require the input of information at different stages of the process, as well as a process for feedback".

To take the right decision, a management hires a consultant who provides the factual data, information and beliefs about the situation. Consultant's knowledge and experience in dealing with such situations helps managers to take the right decision. The data, information, facts and beliefs that constitute decision, must therefore be authentic and must be informed well by the consultants. There are three broad theories of decision making process viz:

Normative - what rational decision-maker does

Descriptive- what actually people does

Prescriptive - what managers should do

(Matthias 2011).



According to Richard Bowett, the model shown in fig.1 is normative model of decision making because it illustrates the process of taking a good decision. Interaction between individuals at each level of this model is necessary to understand effective decision making.

In order to be effective in supporting the client organization to achieve its objectives, consultants must understand the way in which decisions are actually made, justified and implemented within the organization (Wickham and Wickham 2007). Therefore Wickham suggest that consultants must follow levels of insight:

Appreciation of the types of decision to be made

Recognizing the people involved in decision making

Understanding the approach in which decision is defined

Ability to define the ways of decision making that an organization may adopt.

6. Decision Making Unit

Decision making unit (DMU) is the group of managers within an organization, who interact as a whole to accomplish decision making process. Poole and Akhter in there article on decision-making processes states that "decisions are undertaken by people within organizations, and understanding of organizational decision-making processes is closely linked to the role attributed to participants in the decision process". Thus, a consultant must recognize the following key players in DMU, so that he/she can facilitate client's decision.

Decision Maker: person who actually makes decision and is responsible for the outcomes of the decision.

Authorizer: authorizes, modifies or sanctions the decision taken by decision maker.

Information Provider: provides information and data which is analyzed by decision maker in order to choose possible course of action and to justify the decision.

Resource Provider: authorizes the use of resources that are required before implementation of the decision.

Influencer: puts the decision into effect e.g. operations, R&D and sales team

A consultant's objective should be to contribute to sustainable development by eliminating obstructions to optimized decision making and to take care of all the members of the DMU while providing the information and facilitating the management decision.

7. Factors Influencing Decision Making in Organizations

To facilitate client in their decision-making without changing the decision, a consultant is expected to understand and follow the decision-making style in the client organization. The three major factors that can influence client decision making are:

Organizational Orientation

Organizational Culture and

Strategy Process

Organizational Orientation:

These are the priorities that an organization is believed to have focus on and the issues pertaining to them. As explained by Wickham and Wickham, there can be three different types of orientations that an organization may have: production, sales and marketing (2007).

Production Orientation: organizations having production orientation concentrates on developing the products or services it provides rather than their demand (Wickham 2007).

Sales Orientation: Such organizations give priority to decisions focused on sales strategy and short term promotional tactics.

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Marketing Orientation: Such businesses are concerned with the decisions focused on developing strategic marketing approach.

Organizational Culture:

Culture of an organization has a major impact on its decision making process. A consultant needs to understand organization's culture to assist client effectively in making decision and implementing it. There can be four broad categories of culture in an organization as sufficed by Wickham:

Power culture: Often found in small firms, this culture is dominated by a single person who is the source of all authority in the organization and also dominates the DMU.

Role culture: such cultures define individual roles through job descriptions and specifications. There are well-defined departments and their functions.

Task culture: Business in such cultures is segregated into teams rather than departments and the decision making is centered on the project team.

Person culture: Decision making in these cultures is informal since such organizations give priority to internal environment rather than external world.

Strategy Process:

A consultant must know the strategy process of an organization which consists of the content of the strategy and the process of the strategy. Content of the strategy signifies the actual business an organization does and the process tells the way in which organization decides what to do.

8. Change: Appetite for Decision Making

Decision making process starts when the management needs change of some kind in the organization. "Consulting opportunities arise due to the clients' desire to undertake change within its organization and its realization that it requires external help to do this" (Khosla 2004). Desire for change could arise from several intrinsic and extrinsic factors such as change in market, competition and technology or change in stakeholder expectations, vision and role of the company.

Consultant's role is to assist the company in determining the main problems, to bring effective changes to cope with those problems and to manage any resistance to changes (Waters 2010).

At some instances, the motivation for change is not very high due to less dissatisfaction of the current state or due to unclear vision of the change. Lack of resources and unsuccessful past experiences can also become barriers to change. Consultant need to detect such barriers and help the client managers to overcome these barriers. Khosla explains that a consultant need to assess the strength of business logic for change and the motivation levels of the decision makers.

9. Change Process

Dr. John Kotter says that 70% of all major change efforts in organizations fail because organizations do not adopt the appropriate approach to see the change. Kotter outlines the following eight stage process of change that a consultant must understand while assisting change managers in organizations.

Step-1: Creating a sense of urgency

Often organization and the employees do not feel the urge to change and remain complacent. However when some people notice the vulnerability in the organization than they need to establish a sense of urgency among others for prompt action. Consultants may be hired to show the bigger picture and motivate the employees to create a sense of urgency.

Step-2: Creating a coalition

The change leader should gather all those people who support change and have enough motivation to make it happen. Team of such leaders and managers will result in effective decision making under complex circumstances. A consultant needs to interact with the change team to find its weak areas and ensure that it consist of people from different departments and levels.

Step-3: Developing vision and strategy

Change leader must show the vision and impact of the change on organization and propose strategies to achieve the desired change. This will simplify the further decision making process and will motivate people to participate in the change process. It is important for the consultant to understand the vision of the change in order to facilitate client.

Stage-4: Communicating the change vision

Management must communicate the change vision among relevant employees to enhance their motivation to participate. Organizations may hire consultants to communicate this vision to employees. It than becomes the responsibility of a consultant to communicate the right vision, to address peoples' concerns and anxieties and to motivate them to accept the change.

Stage-5: Empowering employees and removing barriers

Management should remove the obstacles that may affect change. Employees should be provided all the resources needed to act in accordance with the vision and should be encouraged to take risks. At this stage, consultant may help the client in identifying the barriers and ways to eliminate them.

Stage-6: Generating short-term wins

Communicating the progress to employees and rewarding at the same time can develop a feeling of success and celebration. Creating short-term targets helps leaves little room for failure. A consultant may assist change leaders in creating these short-term goals and in rewarding the employees.

Stage-7: Consolidating improvements and keeping the momentum for change moving

Kotter warns that victory should not be declared until changes sink deeply into organization's culture. A premature declaration of victory may lead to bitter consequences giving space to resistors to emerge.

Stage-8: Anchoring new approaches to culture

Eventually, a change should be absorbed in the organization's culture in a way that the value behind the vision must be seen in day-to-day working. It is also required that leader's continue to support change and new leaders adopt it.

10. Communicating Change

According to John Stark the way of communicating the change is very important to overcome the fear and concerns aroused by change (2000). Employees become curios to know the impact of change on their job, position, role and future of the organization. Engaging employees is vital for a successful change and effective communication with employees is fundamental to doing that. Kotter notes that most of the change programs fail due to lack of communication of change to the staff that implements it. Kelly M. Gordon states that "change will not be effectively implemented unless it is communicated to an organization's staff in such a way that resistance is overcome, fears are assuaged, confusion is minimized, and buy-in by all affected individuals is secured" (2006). The aim of communication is to deliver information that changes behavior in front-line employees.

For change to be successful people need to know and understand why they are being asked to change (Wells 2007) and if consultant is acting as a facilitator to communicate change than it is the consultant's responsibility to communicate it effectively and to manage the responses to change. Merely providing information is not communication, therefore consultants need to make sure that employees have a voice in decision and their view is heard, considered and responded before decision is made.

11. Responses to Change

Peter Stark suggests that employees' response to change can be due to several factors ranging from fear and panic to enthusiastic support (2010). Change in the economic and the business environment forces some organizations to change the way of doing business. Consultants must understand the reason behind employee's response to change and assist managers and leaders in designing a change strategy accordingly.

Quoting Michael W. Durant words "Organizational change has an element of loss inherent in the process, and it is a loss that is often deeply felt by employees" (1999). In order to facilitate clients in their decision making process and change, a consultant needs to understand the emotional quotient of the employees. This can be understood using Kubler-Ross transition cycle which has five stages:

Denial: employees might respond by ignoring the issue

Anger: resistance to change

Bargaining: to put off change or find an alternative way out to the situation

Depression: when bargaining fails, employees feel down and low in energy

Acceptance: when nothing works, employees accept the change