Management consulting is a broad set of tools supposed to help companies improve productivity and performance. A management consulting firm helps a company identify future goals, current skills, and fault lines. Management or strategy consulting uses specific methodologies to analyze everything that affects companies, their employees, competitiveness, and products and services. These factors include intangibles like best practices, branding, and strategic marketing decisions, motivation and incentives, as well as technological adaptation, production line efficiency, and profitable accounting. IT consulting and accounting are two significant areas of management consulting expertise. Although often derided for stating the obvious in jargon and leaving room for corruption through 'incentives' and 'creative accounting', management consulting can occasionally help improve working conditions and output.
Business schools turn out the most management consultants. On the non-quantifiable side there is an emphasis on getting employees to feel greater identification with their firm. The idea is that they then have a greater investment in the fortunes of the company, and thus work smarter. Incentives and motivational schemes fall into this category, as do team- and corporate identity-building exercises with activities like Lego Serious Play and coaching. The more technical, tangible aspects range from improving production line and supply chain efficiency to creating more profitable accounting paths, or using technology to streamline data-gathering, communications and strategic decision-making. Some firms such as IBM's Global Services and Deloitte offer the full range including change management, others like McKinsey offer soft skills and analysis, and more specialized ones such as First Manhattan offer a single area of expertise, like banking. Management consulting firms are said to bring an outsider's eye and superior training in organizational matters.
Although generally a high growth industry – management consulting averaged over 20% growth through most of the 1980s and 1990s – it is fundamentally linked to business cycles. In times of very low growth or recession, such as 2001-2003, the services of management consultants are not in great demand, though some argue that periods of low growth are exactly what strategy consultants should help companies overcome.
Management consultants are often satirized as translating business and corporate talk into meaningless buzzwords, most notably in the Dilbert comic strip. They are also accused of never having worked in any other capacity and therefore not having real corporate world experience, knowledge or skills.
Most recently the industry has been hit by the involvement of consulting giants such as Arthur Anderson in a spate of multi billion-dollar scandals, including 'creative' accounting, insider trading, fraud, and political and military involvement. The collapse or prosecution of firms such as Enron, WorldCom, Halliburton, and Parmalat can all be traced to seriously flawed management advice (at the cost of millions in billing fees alone), nepotism or active collusion on political or military matters, and have forced the management consulting industry to look more closely at its own practices and deal-making.