The Management Consulting Industry Growth Of Consulting Services In India: Panel Discussion

Vol 26, No 3; Article by R. Srinivasan

Management consulting as an industry has received less attention than it deserves in academic research. This could be attributed to the myriad forms of organizations/ business models the industry supports, the fragmented nature of the industry, or even questions about the legitimacy of the role of the organizations/ business models in large corporate/ government clients. The academic note, preceding the panel discussion on the Indian management consulting industry intends to study management consulting as an industry -- define its boundaries, elaborate on business models, and describe positioning options/ sources of competitive advantage. Institutional entrepreneurship and transaction cost economics lenses are used to study management consulting firms as "professional service firms".

Based on the history and evolution of the industry, this note draws up the industry structure, elaborates on the industry constituents and the various positioning opportunities. The note subsequently discusses the legitimacy and value addition generated by the management consulting firms using transaction costs logic. After analyzing management consulting firms as professional service firms, and based on differences in their positioning, a typology of management consulting firms is evolved: firms that specialize in strategy and organizational restructuring (leveraging their tacit knowledge); firms that specialize in technology/ operations and cost control (leveraging their breadth of experience and expertise), and firms that provide niche consulting (leveraging their deep domain expertise).

The note then elucidates the emerging challenges facing the management consulting industry, as firms globalize and technology contributes to commoditize explicit knowledge significantly. The three major challenges facing the industry are: competition and differentiation in an increasingly fragmenting industry; need to relook at traditional organizational forms in the wake of globalization and new norms of work; and management of internal tacit knowledge to continue providing superior value to clients. The note then describes the structure and context of the Indian management consulting industry, and finally evolves the agenda for the round table discussion. A panel of experts from the management consulting industry discusses issues connected with the growth of the industry in India and the challenges it faces.