Case Study of Boston Consulting Group-Management consulting

Case Study of Boston Consulting Group- Management consulting
The importance of management consulting is for the efficient operation
of capital markets. It is noted that, without high quality consulting
services, the capital market would be inefficient. This would result in
higher cost of capital. Similarly, studies conclude that the quality of
consulting can affect the reliability of audited financial information,
which in turn plays an important role in capital markets. Management
consulting is, therefore, fundamental in providing the confidence that
capital-market participants require and plays an important role in the
effective allocation of economic resources. Because of a series of
corporate collapses and audit failures, perception of management
consulting has been an issue over the recent past years. Quality is a
degree or grade of excellence or worth, or essential and distinguishing
attribute of something or someone. This essay discusses the case of
management consulting at Boston Consulting Group and the employees’
job satisfaction levels.
Discussion
In defining management consulting, many authors contend that
stakeholders need to get outputs that are worth spending on when calling
for consulting services (Perlow& Herman, 2010). Management consulting is
concerned with good performance and positive characteristics of the
service provided. Martin who is the CEO of Boston Consulting group is
facing challenges of employees’ job satisfaction rating. Top
management employees are complaining of lack of work life balance.
Martin being charged with the responsibility of overseeing the running
of the company has to act swiftly. The best way to manage the problem is
through an open dialogue with all employees. He invites researchers from
Harvard business school to conduct a survey on employees’ job
satisfaction. Since management consulting is unobservable, scholars look
at substitutes or pointers of administration consulting, such as the
opinions of experts and consulting coverage, low rate of litigation and
good peer ratings on peer reviews (Perlow& Herman, 2010).
Management difficulties
The management difficulties experienced at Boston Group are concerning
the top level management staffs who want to quit. The three top level
personnel are Rogers, Quinn and Levine, who have stayed in the
consultancy industry for quite some time. All of them complain of the
lack of work life balance. Martin is confused and does not know what to
do in addressing the matter (Perlow& Herman, 2010). The standards imply
that management consulting is achieved by the issuance of the
‘‘appropriate’’ consultant report on the client’s compliance
with accepted industry principles. A consulting failure occurs if the
management consultant is not independent. Failure also occurs if an
independent consultant incorrectly issues a clean consultant report due
insufficient competent evidence (Perlow & Herman, 2010). The top most
employees of the group are faced with the challenge of maintaining work
schedules and happy families. Peter Quinn, for example complains of
having a poor planning programme outside his office work.
The management department of Harvard Business School defines management
consultancy as the joint probability of discovering material
misrepresentations and reporting them when they exist. The first part
(the ability to discover) is related to professional judgment while the
second part (report truthfully) is related to independence. This is the
most widely adopted definition of management consulting. In line with
other service providers, consultants are evaluated based on technical,
and functional, quality elements (Perlow& Herman, 2010). Technical
management consulting is the degree to which management consulting meets
consumers’ expectation this is in regard to the detection and
reporting of errors and irregularities regarding the company and its
financial statements. Functional management consulting is the degree to
which the process of carrying out the consultancy and communicating its
results meets consumers’ expectations (Perlow& Herman, 2010).
Researchers’ Evaluation/ Decision criteria
Satisfaction is defined as an act of fulfilling a desire or need. A
management consultant is said to have satisfied the client when he/she
performs according to the client’s expectation. The differences in the
expectations of the consultancy have been affecting management
consultants for years. Some of the clients of BCG have the problem of
managing their work well. This caused the consulting team in charge to
work extra hours at night and during the weekends. Martin rated himself
at 8 out of 10 in terms of work life balance. He is however, concerned
about his best performing team demands. Knowledge of the Users of
Financial Information the difference of expectations among users is
related to the lack of knowledge of the users of the financial
information about the work of the management consultant and they affect
clients’ satisfaction (Perlow& Herman, 2010).
Researchers observe that large management consulting firms are perceived
to be providing higher quality management consulting services in order
to protect the firm reputation and to avoid costly litigation (Perlow&
Herman, 2010). George Martin, the CEO of Boston Consulting Group is
faced by challenging managerial roles. However, cases of major external
consultants being faulted by clients and other users of management
consulting reports information for failure to flag off inadequacies have
been on the rise in the recent past. Management consultants work
extremely hard to meet the targets of their clients and at the same time
hit the set organizational deadlines (Perlow& Herman, 2010). This has
greatly affected their work-life balances. Consultants are spending long
hours in the office and thus lacking proper time with their families.
This has a long term effect of families and rises in divorce cases.
Management Key Roles
The Stewardship Hypothesis is based on agency theory: the separation of
ownership and control motivates the owners to incur costs to monitor the
activity of the managers. One of these controls is the hiring of
competent management consultants who certifies the accuracy of the
financial information provided to the clients (Perlow& Herman, 2010).
BCG has employed the policy of tapping the best team in the consulting
industry. They have a policy of retaining the experienced staff as they
hire new ones. A major problem has risen and affected the best
performing employees. Among the affected are Brad Rogers, a second year
consultant who complains of his need to spend more time with his
daughter. There is also Peter Quinn, one of the highest performing
principals. He is complaining of his inability to develop and hold any
plan or schedule outside the office work. Lastly in the list is Rachel
Levine, a senior most woman and a successful commercial partner. She has
a large family which has been left under the care of her husband. Boston
Consulting Group has highly invested in the hiring of competent staff to
handle their large clientele in the industry.
The Information Hypothesis dictates demanding high quality management
consulting. It enhances the information value of financial information.
The demand for management consulting is linked to the demand for
financial information quality (Perlow& Herman, 2010). Given the
separation between ownership and control, shareholders and other
external stakeholders will be motivated to demand an alternative,
un-biased source of information on an ‘‘as needed’’
basis(Perlow& Herman, 2010). These factors affect the work programs for
the consultants who have to bear with the unpredictable work schedules.
Among all the participants of the study, over half of them felt there
was a problem with work-life balance. The problem is not appropriately
handled by the top management because they also inclusive in the list of
the dissatisfied employees.
International standard on quality control (ISQC 1) provides guidance on
the creation of an environment in the firm, which promotes quality in
the management consulting. This standard identifies the important
elements of a quality control system (Perlow& Herman, 2010). They
include leadership responsibilities for quality within the firm,
relevant ethical requirements, human resources, engagement performance
and monitoring (Perlow& Herman, 2010). The industry pressures towards
the members of the consulting firm make it hard for employees to have
ample private time. Some clients fail the consulting team in charge of
providing the management consulting services and this make the employees
work long hours at night and even during the weekends.
Matters Arising and Recommendations
Senior consultants are another source of frustration to the junior
employees in the work environment. They fail to have clear guidelines on
the project undertaken which lead to the last minutes rush. This affects
the work program of all those who are involved in the project (Perlow&
Herman, 2010). The managing partner has received three cases of senior
employees who want to quit the firm. Many have attributed their
intention to leave as the lack of work-life balance. Parents with
children lack the time to spend with their families because of tight
work schedules. There should be a proper schedule for a work-life
balance for all employees at all levels in the organization (Perlow&
Herman, 2010). Management should hold group discussions with employees
to get to know their problems. Another billowing problem is that of
consultants working many hours at night and weekends. This deprives them
time with their families and friends outside the office.
Management consulting drivers can be classified into management
consulting-team and management consulting-firm attributes. Management
consulting-team attributes are characteristics of the consulting team
and consulting partner and include the level of partner attention to the
consultancy, communication and quality of working relationships between
the consulting team and client management, and the skills and experience
of the consulting team (Perlow& Herman, 2010). Martin is disturbed by
the case of the three senior hardworking colleagues who intend to leave.
This is so because of their vast experience and knowledge in the
consultancy industry. This is in relation to the client’s industry,
and the ethical standards of the consulting team and the technical
competence of the consulting team. Imperatively, the suggested
alternatives and recommendations can be implemented in the firm, without
causing serious issues with adjustment. Accordingly, the best course of
action for fixing the issues affecting the firm should minimize the
likelihood of disruptions of the firm’s activities. As such training
is imperative.
Action plan for the Management
The eminent events and ensuing investigations have resulted in changes
to regulatory arrangements. Martin being the CEO of the group has to
address the problem to the letter. The group has designed some work life
balance initiatives. There is the designing and implementation of a part
time work schedule. This is where an employee is allowed a day to work
at home so as to have time with the family. There is also the non-client
work schedule in the office. This is geared towards enabling a
consultant to take on administrative roles in the office. It reduces
time outside the office and also maintains a healthy work schedule for
the employees. Employees are also encouraged to take on internal
projects within the firm. This reduces their travel times to the
clients’ place of work. It is geared toward creating a sustainable
healthy working environment. Lastly, there is the leave of absence
policy where an employee is allowed to have a sabbatical leave with the
family. This mostly happens during maternity days and also child birth.
Also employees are allowed to take on this leave policy when they are
marrying.
The population of interest for this study comprised of employees of the
Boston Consulting Group. The population comprised ninety three employees
who undertook the research study. The high reliance on management
consulting information for investment decision as well as data
availability was the main consideration in the choice of this
population. This population was considered appropriate to gather the
requisite information needed in a reasonable amount of time (Perlow&
Herman, 2010)). The population was a combination of employees from all
the departments and all levels of management. Data was collected through
the issuance of survey question to all the selected employees who were
required to fill in appropriately the forms. The data was tabulated in
graphical form representing the various responses. The results were
presented to the CEO and the top management for implementation.
Conclusion
The essay discusses the case of management consulting at Boston
Consulting Group and the employees’ job satisfaction levels. The
importance of the study is to help management consultants get an insight
on what factors they need to focus on to produce quality management
reports, which will meet the expectations of users of management
consulting information. The group has designed some work life balance
initiatives. There is the designing and implementation of a part time
work schedule. This is where an employee is allowed a day to work at
home so as to have time with the family. There is also the non-client
work schedule in the office. This is geared towards enabling a
consultant to take on administrative roles in the office. It reduces
time outside the office and also maintains a healthy work schedule for
the employees. Employees are also encouraged to take on internal
projects within the firm. This reduces their travel times to the
clients’ place of work. It is geared toward creating a sustainable
healthy working environment. Lastly, there is the leave of absence
policy where an employee is allowed to have a sabbatical leave with the
family. This mostly happens during maternity days and also child birth.
Also employees are allowed to take on this leave policy when they are
marrying.
References
Perlow, L., & Herman, K., (2010). George Martin at the Boston Consulting
Group (A). Harvard Business School.4-410-112.
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