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89-509: Boston Consulting Group, Inc. ( BCG ) is an American global management consulting firm founded in 1963 and headquartered in Boston, Massachusetts . It is one of the " Big Three " (or MBB, the world's three largest management consulting firms by revenue) along with McKinsey & Company and Bain & Company . Since 2021, BCG has been led by the German executive Christoph Schweizer. The firm

178-402: A PowerPoint presentation and a booklet. McKinsey & Company has traditionally charged approximately 25 percent more than competing firms. Its invoices traditionally contain only a single line. A typical McKinsey engagement (called a "study") can last between two and twelve months and involves three to six McKinsey consultants. An engagement is usually managed by a generalist that covers

267-429: A partnership before being legally restructured as a private corporation with shares owned by its partners in 1956. It mimics the structure of a partnership and senior employees are called "partners". The company has a flat hierarchy and each member is assigned a mentor. Since the 1960s, McKinsey's managing director has been elected by a vote of senior directors to work up to three, three-year terms or until reaching

356-511: A service model may vary greatly across markets and its description is therefore contingent . Management consulting grew with the rise of management , as a unique field of study. One of the first management consulting firms was Arthur D. Little Inc., founded in 1886 as a partnership, and later incorporated in 1909. Although Arthur D. Little later became a general management consultancy, it originally specialized in technical research. As Arthur D. Little focused on technical research for

445-476: A "fading empire, where hubris and changing times have diminished the firm's statures." In his February 2020 in-depth article in The Atlantic , Daniel Markovits argues that McKinsey promotes "intellect and elite credentials" and "Meritocrats" over "directly relevant experience". Many of McKinsey's alumni become CEOs of major corporations or hold important government positions. In doing so, they influence

534-462: A 1997 article in The Observer , McKinsey recruited recent graduates and "imbue[d] them with a religious conviction" in the firm, then cull[ed] through them with its " up-or-out " policy. The "up or out" policy, which was established in 1951, meant that consultants that were not being promoted within the firm were asked to leave. By 1997, about one-fifth of McKinsey's consultants departed under

623-677: A McKinsey consultant at the time, published "Make Overhead Cuts That Last" in Harvard Business Review , in which he introduced new rules for scientific management such as "overhead valuation analysis" (OVA). OVA guided McKinsey's "path to downsizing", responding to the "mid-century corporation's excessive reliance on middle management". Neuman wrote that the "process, though swift, is not painless. Since overhead expenses are typically 70% to 85% people-related and most savings come from work-force reductions, cutting overhead does demand some wrenching decisions." In 1976, Ron Daniel

712-489: A Social Sector Office (SSO) in 2008, which is divided into three practices: Global Public Health, Economic Development and Opportunity Creation (EDHOC) and Philanthropy. McKinsey does much of its pro-bono work through the SSO, whereas a Business Technology Office (BTO), founded in 1997, provides consulting on technology strategy. By 2009, the firm consisted of 400 directors (senior partners), up from 151 in 1993. Dominic Barton

801-562: A business magazine, the McKinsey Quarterly . McKinsey has been the subject of significant controversy and is the subject of a criminal investigation into its business practices. The company has been criticized for its role promoting OxyContin use during the opioid crisis in North America , its work with Enron , and its work for authoritarian regimes like Saudi Arabia and Russia . The criminal investigation by

890-475: A failure to develop plans that are executable by the client. As stated above, management consulting is an unregulated profession; anyone or any company can style themselves as management consultants. A number of critical books about management consulting argue that the mismatch between management consulting advice and the ability of executives to actually create the change suggested results in substantial damages to existing businesses. In his book, Flawed Advice and

979-467: A form of corporate social responsibility . Other for-profit firms have spun off nonprofit consulting organizations, e.g. Bain creating Bridgespan . Many firms outside of the Big Three offer management consulting services to nonprofits, philanthropies, and mission-driven organizations. Some, but not all, are nonprofits themselves. As with all client-contractor work, liability depends heavily on

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1068-503: A gradual recovery in the consulting industry's growth rate in the intervening years, with a current trend towards a clearer segmentation of management consulting firms. In recent years, management consulting firms actively recruit top graduates from Ivy League universities, Rhodes Scholars , and students from top MBA programs. In more recent times, traditional management consulting firms have had to face increasing challenges from disruptive online marketplaces that are aiming to cater to

1157-545: A higher cost-efficiency than if clients were to perform research themselves. Three consulting firms are widely regarded as the Big Three or MBB: The Big Four audit firms ( Deloitte , KPMG , PwC , Ernst & Young ) have been working in the strategy consulting market since 2010. In 2013, Deloitte acquired Monitor Group —now Monitor Deloitte —while PwC acquired PRTM in 2011 and Booz & Company in 2013—now Strategy& . From 2010 to 2013, several Big Four firms have tried to acquire Roland Berger . EY followed

1246-424: A lawyer. The firm developed an " up or out " policy, where consultants who are not promoted are asked to leave. In 1937, Bower established a set of rules: that consultants should put the interests of clients before McKinsey's revenues, not discuss client affairs, tell the truth even if it means challenging the client's opinion, and only perform work that is both necessary and that McKinsey can do well. Bower created

1335-525: A mix of both of these categories. In the modern economic environment, management consulting firms are typically classified under the umbrella term of corporate service providers . Consultants have specialized skills on tasks that would involve high internal coordination costs for clients, such as organization-wide changes or the implementation of information technology. In addition, because of economies of scale , consultants' focus on and experience in gathering information across markets and industries enables

1424-419: A notoriously competitive hiring process and is widely seen as one of the most selective employers in the world. McKinsey recruits primarily from top business schools and was one of the first management consultancies to recruit a limited number of candidates with advanced academic degrees (e.g., PhD) and deep field expertise, and who have demonstrated business acumen and analytical skills. McKinsey publishes

1513-490: A period of sustained double-digit annual revenue growth until the financial crisis of 2007–2008 . As financial services and government were two of the largest spenders on consulting services, the financial crash and the resulting public sector austerity drives hit consulting revenues hard. In some markets such as the UK there was a recession in the consulting industry, something which had never happened before or since. There has been

1602-603: A private consulting agreement, violating McKinsey's policies on confidentiality. Gupta was convicted in June 2012, of four counts of conspiracy and securities fraud , and acquitted on two counts. In October 2011, he was arrested by the FBI on charges of sharing insider information from these confidential board meetings with Rajaratnam. At least twice, Gupta used a McKinsey phone to call Rajaratnam and retained other perks—an office, assistant, and $ 6 million retirement salary that year —as

1691-606: A process to centralize knowledge from each practice area and a resource directory of internal experts." By the end of his tenure in 1988 the firm was growing again and had opened new offices in Rome , Helsinki , São Paulo and Minneapolis . Fred Gluck was McKinsey's managing director from 1988 to 1994. The firm's revenues doubled during his tenure. He organized McKinsey into 72 "islands of activity" that were organized under seven sectors and seven functional areas. By 1997, McKinsey had grown eightfold over its size in 1977. In 1989

1780-420: A role at the firm. Bain agreed and joined in 1967 at a starting salary of $ 17,000 per year. In the early 1970s, Bain was considered internally to be Henderson's eventual successor. However, in 1973 Bain resigned from BCG to start his own strategy consulting firm, Bain & Company , hiring away six of BCG's employees. In 1974, Henderson arranged an employee stock ownership plan so that the employees could make

1869-474: A senior partner emeritus. After the scandal McKinsey instituted new policies and procedures to discourage future indiscretions from consultants, including investigating other partners' ties to Gupta. In February 2018, Kevin Sneader was elected as managing director. He had a three-year term that began on July 1, 2018. McKinsey has consulted for multiple cities, states and government organizations during

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1958-469: A single entity, branded as BCG X. This included several business units focused on providing digital and technology-related consulting services for clients: BCG Brighthouse is a consultancy focused on business purpose consulting. The Henderson Institute is Boston Consulting Group's think tank named after Bruce Henderson , the founder of BCG. The institute's primary focus is on conducting research into strategic and managerial issues that impact businesses and

2047-607: A traditional "headquarters"; the managing partner chooses his or her home office. McKinsey & Company provides strategy and management consulting services, such as providing advice on an acquisition, developing a plan to restructure a sales force, creating a new business strategy or providing advice on downsizing, according to the 2013 book, The Firm . The 1999 book, The McKinsey Way said that McKinsey consultants designed and implemented studies to evaluate management decisions using data and interviews to test hypotheses . which were then presented to senior management, typically in

2136-753: A year on research. McKinsey was one of the first organizations to fund management research, when it founded the Foundation for Management Research in 1955. The firm began publishing a business magazine, The McKinsey Quarterly , in 1964. It funds the McKinsey Global Institute, which studies global economic trends and was founded in 1990. It also launched the McKinsey Institute for Black Economic Mobility in 2020 to fund research focused on advancing inclusive growth & racial equity globally. Many consultants are contributors to

2225-490: Is an American multinational strategy and management consulting firm that offers professional services to corporations, governments, and other organizations. Founded in 1926 by James O. McKinsey , McKinsey is the oldest and largest of the "MBB" management consultancies (MBB) . The firm mainly focuses on the finances and operations of their clients. Under the direction of Marvin Bower , McKinsey expanded into Europe during

2314-578: Is credited with founding the firm's principles and strategy as his deputy. The New York office purchased exclusive rights to the McKinsey name from the former McKinsey Chicago office which was separated with AT Kearney in 1946. McKinsey & Company grew quickly in the 1940s and 1950s, especially in Europe. It had 88 staff in 1951 and more than 200 by the 1960s, including 37 in London by 1966. In

2403-467: Is engaged mainly with aim to find hidden weak spots and improve performance, while the reactive consultant engagement is mostly aimed at solving problems identified by external stakeholders. Marvin Bower , McKinsey's long-term director, has mentioned the benefits of a consultant's externality, that they have varied experience outside the client company. Management consulting could be classified into two categories: Management consulting often involves

2492-537: Is involved in designing the economic blueprint for the country, a plan called Vision 2030 . In June 2021, BCG was hired to examine the feasibility for the country to host the 2030 FIFA World Cup . The bid was assessed to be a great deal, as FIFA 's policy of continental rotation blocked all the Asian Football Confederation (AFC) nations from hosting the World Cup until 2034, after Qatar

2581-593: The 2019 coronavirus pandemic . During the first four months of the pandemic, McKinsey obtained in excess of $ 100 million in consulting work, including no-bid contracts with the United States Department of Veterans Affairs and Air Force . The reopening guidelines for Florida's Miami-Dade County , produced with McKinsey's input, were criticized by local media and officials for complexity and lack of clarity. McKinsey discontinued its investment banking advisory unit in 2021, citing "personnel matters" as

2670-486: The Harvard Business Review . McKinsey consultants published only two books from 1960 to 1980, then more than 50 from 1980 to 1996. McKinsey's publications and research give the firm a "quasi-academic" image. A McKinsey book, In Search of Excellence , was published in 1982. It featured eight characteristics of successful businesses based on an analysis of 43 top performing companies. It marked

2759-645: The US Justice Department , with a grand jury to determine charges, is into its role in the opioid crisis and obstruction of justice related to its activities in the sector. McKinsey & Company was founded in Chicago under the name James O. McKinsey & Company in 1926 by James O. McKinsey , a professor of accounting at the University of Chicago . He conceived the idea after he had witnessed inefficiencies in military suppliers while he

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2848-451: The value-based health care model as recommended by BCG had not been properly investigated and have resulted in an exponential growth in administration and lack of responsibility for patients. In 2022, BCG filed a lawsuit against GameStop as the latter allegedly denied payment of fee worth $ 30 million for a project. GameStop argued that it saw it is in the best interest of its stakeholders to deny payment as BCG brought little improvement to

2937-485: The 1940s and 1950s. In the 1960s, McKinsey's Fred Gluck —along with Boston Consulting Group 's Bruce Henderson , Bill Bain at Bain & Company , and Harvard Business School 's Michael Porter —initiated a program designed to transform corporate culture . A 1975 publication by McKinsey's John L. Neuman introduced the business practice of "overhead value analysis" that contributed to a downsizing trend that eliminated many jobs in middle management . McKinsey has

3026-521: The 1970s, BCG created and popularized the "growth–share matrix," a chart to help large corporations decide how to allocate cash among their business units. The corporation would categorize its business units as "Stars," "Cash Cows," "Question Marks," or "Dogs," and then allocate cash accordingly, moving money from "Cash Cows" toward "Stars" and "Question Marks," which have higher market growth rates and hence greater upside potential. In December 2022, BCG consolidated many of its alternative business units under

3115-594: The Boston Consulting Group as having worked with Isabel dos Santos , who exploited Angola's natural resources while the country suffers from poverty, illiteracy, and infant mortality. According to the article, BCG was contracted by the Angolan state-owned petroleum company Sonangol , as well as the jewelry company De Grisogono , owned by her husband through shell companies in Luxembourg, Malta and

3204-609: The EBITDA of the company, which the consultancy allegedly promised to improve. BCG counter argued that the company has delivered more than it promised in statement of proposal and that the quoted variable fee was based on the "projected," not realized, improvement in EBITDA, as per the contract. On July 30, 2024 the suit was concluded in a joint dismissal. Management consulting As a result of their exposure to and relationships with numerous organizations, consulting firms are typically aware of industry " best practices ". However,

3293-480: The Management Trap , Chris Argyris believes that much of the advice given today has real merit. However, a close examination shows that most advice given today contains gaps and inconsistencies that may prevent positive outcomes in the future. Ichak Adizes and coauthors also criticize the timing of consultant services. Client organizations, which are usually lacking the knowledge they want to obtain from

3382-603: The Netherlands; the firm was reportedly paid through offshore companies in tax havens such as Malta. The New York Times also reported that Boston Consulting Group is one of the consulting firms, along with McKinsey and Booz Allen , helping Crown Prince Mohammed bin Salman consolidate power in Saudi Arabia . While a BCG spokesperson said the firm turns down projects involving military and intelligence strategy, BCG

3471-685: The New York-based McKinsey, Wellington & Co. and splitting off the accounting practice into Chicago-based Wellington & Company. A Wellington project that accounted for 55 percent of McKinsey, Wellington & Company's billings was about to expire and Kearney and Bower had disagreements about how to run the firm. Bower wanted to expand nationally and hire young business school graduates, whereas Kearney wanted to stay in Chicago and hire experienced accountants. In 1937, James O. McKinsey died after catching pneumonia. This led to

3560-426: The academic work of Joel Stern , Bill Alberts, and Professor Alfred Rappaport . Other consulting firms including McKinsey and BCG developed VBM approaches. Value-based management became prominent during the late 1980s and 1990s. The industry experienced significant growth in the 1980s and 1990s, gaining considerable importance in relation to national gross domestic product . A period of significant growth in

3649-622: The article, McKinsey was cited as claiming that its consultants were not motivated by money, and that partners talked to each other with "a sense of personal affection and admiration". The article described a culture clash that occurred in the early 1990s, leading to the departure of 151 out of the 254 ICG staff members. In their 1997 book Dangerous Company: Management Consultants and the Businesses They Save and Ruin , authors James O'Shea and Charles Madigan said that McKinsey's culture had often been compared to religion , because of

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3738-410: The basis for recommendations with a view to more effective or efficient ways of performing work tasks. The economic function of management consulting firms is in general to help and facilitate the development , rationalization and optimization of the various markets pertaining to the geographic areas and jurisdictions in which they operate . However, the exact nature of the value of such

3827-496: The beginning of McKinsey's shift from accounting to "softer" aspects of management, like skills and culture. According to David Guest from King's College , In Search of Excellence became popular among business managers because it was easy to read, well-marketed and some of its core messages were valid. However, it was disliked by academics because of flaws in its methodology. Additionally, a 1984 analysis by BusinessWeek found that many of those companies identified as "excellent" in

3916-470: The careers of many more management consultants. For example, one of Taylor's early collaborators, Morris Llewellyn Cooke , opened his own management consultancy in 1905. Taylor's method was used worldwide until industry switched to a method invented by W. Edwards Deming . The initial period of growth in the consulting industry was triggered by the Glass–Steagall Banking Act in the 1930s, and

4005-457: The company independent from The Boston Safe Deposit and Trust Company. The buyout of all shares was completed in 1979. In the 1980s, BCG introduced the concept of time-based competition that reconsidered the role of time management in providing market advantages. The concept was the subject of an essay in the Harvard Business Review . In May 2021, the firm elected Christoph Schweizer as CEO, replacing Rich Lesser who would step down and serve as

4094-697: The company performed more than 1,000 e-commerce projects from 1998 to 2000 alone. An October 1, 2000, article in the New York Times described the compulsory mini-courses that McKinsey—and its two largest rivals Boston Consulting and Bain—offered their "hyper-educated" young new recruits. Once completed, these newly certified management consultants would begin their work of "advising the executives of multibillion-dollar companies" on "projects" not related to their academic backgrounds"—"[l]awyers would help packaged-foods companies develop new products, and physicists would tell Internet start-ups how to stand out from

4183-546: The consultant, cannot correctly estimate the right timing for an engagement of consultants. Consultants are usually engaged too late when problems become visible to the top of the client's organizational pyramid. A proactive checkup, like a regular medical checkup, is recommended. On the other side, this opens additional danger for abuse from disreputable practitioners. ISO published the international standard ISO 20700 Guidelines for Management Consultancy Services on June 1, 2017, replacing EN 16114 . This document represents

4272-464: The consulting business. In 2000, Andersen Consulting broke off from Arthur Andersen and announced their new name Accenture . The name change was effective starting January 1, 2001, and Accenture is currently the largest consulting firm in the world in employee headcount. They are publicly traded on the NYSE with ticker ACN. The industry stagnated in 2001 before recovering after 2003 and then enjoying

4361-469: The crowd." The burst of the dot-com bubble led to a reduction in utilization rates of McKinsey's consultants from 64 to 52 percent. Though McKinsey avoided dismissing any personnel following the decline, the decline in revenues and losses from equity-based payments as stock lost value, together with a recession in 2001, meant the company had to reduce its prices, cut expenses and reduce hiring. In 2001, McKinsey launched several practices that focused on

4450-407: The division of McKinsey, Wellington & Company in 1939. The accounting practice returned to Scovell, Wellington & Company, while the management engineering practice was split into McKinsey & Company and McKinsey, Kearney & Company. Bower had partnered with Guy Crockett from Scovell Wellington, who invested in the new McKinsey & Company and became managing partner, while Marvin Bower

4539-536: The early 1980s was driven by demand for strategy and organization consultancies. The wave of growth in the 1990s was driven by both strategy and information technology advice. In the second half of the 1980s, the big accounting firms entered the IT consulting segment. The then Big Eight, now Big Four , accounting firms ( PricewaterhouseCoopers , KPMG , Ernst & Young and Deloitte Touche Tohmatsu ) had always offered advice in addition to their traditional services, but after

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4628-536: The firm had a "button-down culture" focused on "playing by the rules". In his 2013 book, The Firm: The Story of McKinsey and Its Secret Influence on American Business , Duff McDonald described how McKinsey's consultants were expected to become a part of the community and recruit clients from church, charitable foundations, board positions and other community involvements. McDonald wrote that McKinsey calls itself "The Firm" and its employees "members". BusinessWeek summarized The Firm ' s description of McKinsey as

4717-602: The firm tried to acquire talent in IT services through a $ 10 million purchase of the Information Consulting Group (ICG), but a culture clash caused 151 out of the 254 ICG staff members to leave by 1993. In 1994, Rajat Gupta became the first non-American-born partner to be elected as the firm's managing director. By the end of his tenure, McKinsey had grown from 2,900 to 7,700 staff and 58 to 84 locations. He opened new international offices in cities such as Moscow , Beijing and Bangkok . Continuing

4806-507: The firm's Global Chair. In 2022, Boston Consulting Group released its "2022 Annual Sustainability Report" highlighting numerous initiatives focused on societal and planetary impact. Since 2015, the progress in numbers is 30% less greenhouse gas emissions, 20% less water usage, 15% less waste generation, and 10% less energy consumption. BCG typically hires for an associate or a consultant position, recruiting from top undergraduate colleges, advanced degree programs and business schools . In

4895-592: The firm's principle of only working with CEOs, which was later expanded to CEOs of subsidiaries and divisions. He also created McKinsey's principle of only working with clients the firm felt would follow its advice. Bower also established the firm's language. In 1932, the company opened its second office in New York City . In 1935, McKinsey left the firm temporarily to be the chairman and CEO of client Marshall Field's . In 1935, McKinsey merged with accounting firm Scovell, Wellington & Company, creating

4984-760: The firm's revenues declined. New competitors like the Boston Consulting Group and Bain & Company created increased competition for McKinsey by marketing specific branded products, such as the Growth–Share Matrix , and by selling their industry expertise. In 1971, McKinsey created the Commission on Firm Aims and Goals, which found that McKinsey had become too focused on geographic expansion and lacked adequate industry knowledge. The commission advised that McKinsey slow its growth and develop industry specialties. In 1975, John L. Neuman,

5073-539: The firm, since it prides itself on integrity and client confidentiality. McKinsey no longer maintains a relationship with either senior partner. Senior partner Anil Kumar, described as Gupta's protégé, left the firm after the allegations in 2009, and pleaded guilty in January 2010. While he and other partners had been pitching McKinsey's consulting services to the Galleon Group, Kumar and Rajaratnam reached

5162-486: The first few years, the first management consultancy was that of Frederick Winslow Taylor , who in 1893 opened an independent consulting practice in Philadelphia. His business card read "Consulting Engineer – Systematizing Shop Management and Manufacturing Costs a Specialty". By inventing Scientific Management, also known as Taylor's method, Frederick Winslow Taylor invented the first method of organizing work, spawning

5251-621: The first international standard for the management consultancy industry. An international qualification for a management consulting practitioner is Certified Management Consultant (CMC) available in the United States through the Institute of Management Consultants USA . Additional trainings and courses exist, often as part of a MBA training; see Master of Business Administration § Content . McKinsey %26 Company McKinsey & Company (informally McKinsey or McK )

5340-501: The global economy. The Centre for Public Impact is a not-for-profit organization within BCG that is focused on improving the impact and effectiveness of government and public sector organizations. This group works with governments, nonprofit organizations, and other public sector entities to help them achieve their goals and deliver better outcomes for citizens. An article published by The New York Times on January 19, 2020, identified

5429-497: The increasing number of freelance management consulting professionals. The functions of consulting services are commonly broken down into eight task categories. Consultants can function as bridges for information and knowledge, and external consultants can provide these bridging services more economically than client firms themselves. Consultants can be engaged proactively, without significant external enforcement, and reactively, with external pressure. Proactive consultant engagement

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5518-474: The influence, loyalty and zeal of its members. The firm has a policy against discussing specific client situations. A September 1997 The News Observer story said that McKinsey's internal culture was "collegiate and ruthlessly competitive" and has been described as arrogant. Ethan Rasiel's 1999 book entitled The McKinsey Way , described a culture at McKinsey's whereby members were not supposed to "sell" their services. The Sunday Times wrote that McKinsey

5607-513: The late 1980s these activities became increasingly important in relation to the maturing market of accounting and auditing . By the mid-1990s these firms had outgrown those service providers focusing on corporate strategy and organization. While three of the Big Four legally divided the different service lines after the Enron scandal and the ensuing breakdown of Arthur Andersen, they are now back in

5696-420: The mandatory retirement age of 60. The firm is also managed by a series of committees that each has its own area of responsibility. By 2013, McKinsey was described as having a decentralized structure, whereby different offices operate similarly, but independently. The company's budgeting is centralized, but individual consultants are given a large degree of autonomy. As a global firm McKinsey does not have

5785-428: The organization to which they provide services. Consultancies provide services such as: organizational change management assistance, development of coaching skills, process analysis , technology implementation, strategy development, or operational improvement services. Management consultants often bring their own proprietary methodologies or frameworks to guide the identification of problems and to serve as

5874-666: The other organizations with McKinsey's values and culture. McKinsey's alumni have been appointed as CEOs or high-level executives. In his 2010 publication, The Lords of Strategy: The Secret Intellectual History of the New Corporate World , business journalist Walter Kiechel traced the roots of a profound change in corporate management to "four mavericks" in the 1960s—Fred Gluck at McKinsey & Company, Boston Consulting Group's Bruce Henderson, Bill Bain at Bain & Company, and Harvard Business School professor, Michael Porter. Kiechel recounted how they "revolutionized

5963-541: The position of managing director. Davis promised a return to the company's core values after a period in which the firm had expanded rapidly, which some McKinsey consultants felt was a departure from the company's heritage. Also in 2003, the firm established a headquarters for the Asia-Pacific region in Shanghai . By 2004, more than 60 percent of McKinsey's revenues were generated outside the U.S. The company started

6052-536: The potential conflict of interest where a former BCG employee and then hospital executive approved numerous expenses without proper receipts and the high cost paid for external consultants including BCG. In the investigative journalism book Konsulterna - Kampen om Karolinska (roughly The Consultants - The Struggle for the Karolinska University Hospital ), the authors and Dagens Nyheter journalists Anna Gustavsson and Lisa Röstlund argue that

6141-401: The public and social sector. It took on many public sector or non profit clients on a pro bono basis. By 2002, McKinsey had invested a $ 35.8 million budget on knowledge management , up from $ 8.3 million in 1999. Its revenues were 50, 20, and 30 percent from strategy, operations, and technology consulting, respectively. In 2003, Ian Davis , the head of the London office, was elected to

6230-422: The reason. In 2021, McKinsey's Australian office made two acquisitions, Hypothesis, a digital product development company, and Venturetec, an innovation consulting firm. On June 1, 2022, McKinsey announced that it had acquired Caserta, a data engineering firm. In March 2023, McKinsey announced a layoff of 1,400 employees, in a rare job cut of the company. McKinsey & Company was originally organized as

6319-482: The region the client's headquarters are located in and specialists that have either an industry or functional expertise. Unlike some competing consulting firms, McKinsey does not hold a policy against working for multiple competing companies (although individual consultants are barred from doing so). McKinsey & Company was the first management consultancy to hire recent graduates instead of experienced business managers, when it started doing so in 1953. According to

6408-649: The role of management consultants is rapidly changing. Moreover, with more online platforms that connect business executives to relevant consultants, the role of the traditional 'firm' is being questioned. Large management consulting firms and professional networks have adopted a structure of industry-specific branches, with one branch per industry or market segment served. As such, the firms utilize their ability to serve as knowledge brokers within each market segment and industry addressed. Some for-profit consulting firms, including McKinsey and BCG , offer consulting services to nonprofits at subsidized rates as

6497-555: The same year, McKinsey had six offices in major US cities, including San Francisco , Cleveland , Los Angeles and Washington D.C. , as well as six abroad. These foreign offices were primarily in Europe , such as in London , Paris , and Amsterdam , as well as in Melbourne . By this time, one third of the company's revenues originated from its European offices. Guy Crockett stepped down as managing director in 1959, and Marvin Bower

6586-462: The scope of the contract deliverables has been proven to be of considerable difficulty, also in management consulting. For this reason, it is important that clients procuring management consulting services think twice about what type of help they need, so that the scope, length and content of contract reflects such need. Management consultants are sometimes criticized for the overuse of buzzwords , reliance on and propagation of management fads , and

6675-421: The specific nature of situations under consideration may limit the ability or appropriateness of transferring such practices from one organization to another. Management consulting is an additional service to internal management functions and, for various legal and practical reasons, may not be seen as a replacement for internal management. Unlike interim management , management consultants do not become part of

6764-411: The structure developed by prior directors, Gupta also created 16 industry groups charged with understanding specific markets and instituted a three-term limit for the managing director. McKinsey created practice areas for manufacturing and business technology in the late 1990s. McKinsey set up "accelerators" in the 1990s, where the firm accepted stock -based reimbursement to help internet startups ;

6853-403: The subject of contract terms. While the management consulting service provider for obvious reasons has a business reputation to protect, legally there is little protection for the client. This is due to the scope of the contract being the only thing subject to potential insurance claims as well as lawsuits. As with other client-contractor relationships, settling for liabilities that exist outside

6942-541: The trend, with acquisitions of The Parthenon Group in 2014, and both the BeNeLux and French businesses of OC&C in 2016 and 2017, with all now under the EY-Parthenon brand. In 2013, an article in Harvard Business Review discussed the prevalent trends within the consulting industry to evolve. The authors noted that with knowledge being democratized and information becoming more and more accessible to anyone,

7031-408: The up or out policy each year. McKinsey's practice of hiring recent graduates and the "up-or-out" philosophy, were originally based on Marvin Bower's experiences at the law firm Jones Day in the 1930s, as well as the " Cravath system " used at the law firm Cravath, Swaine and Moore . In recent years, it has consistently been recognized by Vault as the most prestigious consulting firm employer in

7120-836: The way we think about business, changed the very soul of the corporation, and transformed the way we work," according to the Harvard Business Press synopsis. McKinsey has been either directly involved in, or closely associated with, a number of notable scandals, involving Enron in 2001, Galleon in 2009, Valeant in 2015, Saudi Arabia in 2018, China in 2018, ICE in 2019, an internal conflict of interest in 2019 and Purdue Pharma in 2019, among others. By 2019, major news outlets, including The New York Times and ProPublica , had raised concerns about McKinsey's business practices. McKinsey & Company consultants regularly publish books, research and articles about business and management. The firm spends $ 50–$ 100 million

7209-589: The world. In 2018, 800,000 candidates applied for 8,000 jobs. While many recruits have MBAs, by 2009, less than half of the firm's recruits were business majors; by 1999, recruits had advanced degrees in science, medicine, engineering or law. A November 1, 1993, profile story in Fortune magazine said that McKinsey & Company was "the most well-known, most secretive, most high-priced, most prestigious, most consistently successful, most envied, most trusted, most disliked management consulting firm on earth". In

7298-478: Was a pioneer in the industry—the "first firm to hire MBA graduates from the top business schools to staff its projects, rather than relying on older industry personnel." They were still trying to keep a "very low profile public image" in 2005. That year, an article in The Guardian said that McKinsey "hours are long, expectations high and failure not acceptable". According to an October 2009 Reuters article,

7387-467: Was driven by demand for advice on finance, strategy and organization. From the 1950s onwards, consultancies expanded their activities considerably in the United States, and also opened offices in Europe and later in Asia and South America. The management consulting firms Stern Stewart, Marakon Associates , and Alcar pioneered value-based management (VBM), or "managing for value", in the 1980s based on

7476-408: Was elected as managing director, a role he was re-elected for in 2012 and 2015. Rajat Gupta along with another McKinsey executive, Anil Kumar , were among those convicted in a government investigation into insider trading for sharing inside information with Galleon Group hedge fund owner Raj Rajaratnam . Though McKinsey was not accused of any wrongdoing, the convictions were embarrassing for

7565-422: Was elected in his place. McKinsey's profit-sharing, executive and planning committees were formed in 1951. The organization's client base expanded especially among governments, defense contractors, blue-chip companies and military organizations in the post– World War II era. McKinsey became a private corporation with shares owned exclusively by McKinsey employees in 1956. After Bower stepped down in 1967,

7654-443: Was elected managing director, serving until 1988. Daniel and Fred Gluck helped shift the firm away from its generalist approach by developing 15 specialized working groups within McKinsey called Centers of Competence and by developing practice areas called Strategy, Operations and Organization. Daniel also began McKinsey's knowledge management efforts in 1987. This led to the creation of an IT system that tracked McKinsey engagements,

7743-757: Was founded in 1963 as part of The Boston Safe Deposit and Trust Company. Bruce Henderson had been recruited from Arthur D. Little to establish the consulting arm operating as a subsidiary under the name Management and Consulting Division of the Boston Safe Deposit and Trust Company. Initially the division only advised clients of the bank, with billings for the first month at just US$ 500. Henderson hired his second consultant, Arthur P. Contas, in December 1963. In 1966, BCG opened its second office in Tokyo, Japan. In 1967, Henderson met Bill Bain and offered him

7832-584: Was set to become the first Middle Eastern nation to host the tournament in 2022. In 2024, BCG consulting heads were summoned to appear before congress to disclose financial details between them and Saudi Arabia and warned staff that they could face jail time if they reveal information. Boston Consulting Group has received criticism for its involvement in the construction of the New Karolinska Solna University Hospital after an investigation by Dagens Nyheter . Specifically,

7921-510: Was working for the United States Army Ordnance Department . The firm called itself an "accounting and management firm" and started out giving advice on using accounting principles as a management tool. McKinsey's first partners were AT Kearney , hired in 1929, and Marvin Bower , hired in 1933. Bower is credited with establishing McKinsey's values and principles in 1937, based on his experience as

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