- •In praise of the fourth edition
- •CONTENTS
- •FOREWORD
- •The concept of consulting
- •Purpose of the book
- •Terminology
- •Plan of the book
- •ABBREVIATIONS AND ACRONYMS
- •1.1 What is consulting?
- •Box 1.1 On giving and receiving advice
- •1.2 Why are consultants used? Five generic purposes
- •Figure 1.1 Generic consulting purposes
- •Box 1.2 Define the purpose, not the problem
- •1.3 How are consultants used? Ten principal ways
- •Box 1.3 Should consultants justify management decisions?
- •1.4 The consulting process
- •Figure 1.2 Phases of the consulting process
- •1.5 Evolving concepts and scope of management consulting
- •2 THE CONSULTING INDUSTRY
- •2.1 A historical perspective
- •2.2 The current consulting scene
- •2.3 Range of services provided
- •2.4 Generalist and specialist services
- •2.5 Main types of consulting organization
- •2.6 Internal consultants
- •2.7 Management consulting and other professions
- •Figure 2.1 Professional service infrastructure
- •2.8 Management consulting, training and research
- •Box 2.1 Factors differentiating research and consulting
- •3.1 Defining expectations and roles
- •Box 3.1 What it feels like to be a buyer
- •3.2 The client and the consultant systems
- •Box 3.2 Various categories of clients within a client system
- •Box 3.3 Attributes of trusted advisers
- •3.4 Behavioural roles of the consultant
- •Box 3.4 Why process consultation must be a part of every consultation
- •3.5 Further refinement of the role concept
- •3.6 Methods of influencing the client system
- •3.7 Counselling and coaching as tools of consulting
- •Box 3.5 The ICF on coaching and consulting
- •4 CONSULTING AND CHANGE
- •4.1 Understanding the nature of change
- •Figure 4.1 Time span and level of difficulty involved for various levels of change
- •Box 4.1 Which change comes first?
- •Box 4.2 Reasons for resistance to change
- •4.2 How organizations approach change
- •Box 4.3 What is addressed in planning change?
- •Box 4.4 Ten overlapping management styles, from no participation to complete participation
- •4.3 Gaining support for change
- •4.4 Managing conflict
- •Box 4.5 How to manage conflict
- •4.5 Structural arrangements and interventions for assisting change
- •5 CONSULTING AND CULTURE
- •5.1 Understanding and respecting culture
- •Box 5.1 What do we mean by culture?
- •5.2 Levels of culture
- •Box 5.2 Cultural factors affecting management
- •Box 5.3 Japanese culture and management consulting
- •Box 5.4 Cultural values and norms in organizations
- •5.3 Facing culture in consulting assignments
- •Box 5.5 Characteristics of “high-tech” company cultures
- •6.1 Is management consulting a profession?
- •6.2 The professional approach
- •Box 6.1 The power of the professional adviser
- •Box 6.2 Is there conflict of interest? Test your value system.
- •Box 6.3 On audit and consulting
- •6.3 Professional associations and codes of conduct
- •6.4 Certification and licensing
- •Box 6.4 International model for consultant certification (CMC)
- •6.5 Legal liability and professional responsibility
- •7 ENTRY
- •7.1 Initial contacts
- •Box 7.1 What a buyer looks for
- •7.2 Preliminary problem diagnosis
- •Figure 7.1 The consultant’s approach to a management survey
- •Box 7.2 Information materials for preliminary surveys
- •7.3 Terms of reference
- •Box 7.3 Terms of reference – checklist
- •7.4 Assignment strategy and plan
- •Box 7.4 Concepts and terms used in international technical cooperation projects
- •7.5 Proposal to the client
- •7.6 The consulting contract
- •Box 7.5 Confidential information on the client organization
- •Box 7.6 What to cover in a contract – checklist
- •8 DIAGNOSIS
- •8.1 Conceptual framework of diagnosis
- •8.2 Diagnosing purposes and problems
- •Box 8.1 The focus purpose – an example
- •Box 8.2 Issues in problem identification
- •8.3 Defining necessary facts
- •8.4 Sources and ways of obtaining facts
- •Box 8.3 Principles of effective interviewing
- •8.5 Data analysis
- •Box 8.4 Cultural factors in data-gathering – some examples
- •Box 8.5 Difficulties and pitfalls of causal analysis
- •Figure 8.1 Force-field analysis
- •Figure 8.2 Various bases for comparison
- •8.6 Feedback to the client
- •9 ACTION PLANNING
- •9.1 Searching for possible solutions
- •Box 9.1 Checklist of preliminary considerations
- •Box 9.2 Variables for developing new forms of transport
- •9.2 Developing and evaluating alternatives
- •Box 9.3 Searching for an ideal solution – three checklists
- •9.3 Presenting action proposals to the client
- •10 IMPLEMENTATION
- •10.1 The consultant’s role in implementation
- •10.2 Planning and monitoring implementation
- •10.3 Training and developing client staff
- •10.4 Some tactical guidelines for introducing changes in work methods
- •Figure 10.1 Comparison of the effects on eventual performance when using individualized versus conformed initial approaches
- •Figure 10.2 Comparison of spaced practice with a continuous or massed practice approach in terms of performance
- •Figure 10.3 Generalized illustration of the high points in attention level of a captive audience
- •10.5 Maintenance and control of the new practice
- •11.1 Time for withdrawal
- •11.2 Evaluation
- •11.3 Follow-up
- •11.4 Final reporting
- •12.1 Nature and scope of consulting in corporate strategy and general management
- •12.2 Corporate strategy
- •12.3 Processes, systems and structures
- •12.4 Corporate culture and management style
- •12.5 Corporate governance
- •13.1 The developing role of information technology
- •13.2 Scope and special features of IT consulting
- •13.3 An overall model of information systems consulting
- •Figure 13.1 A model of IT consulting
- •Figure 13.2 An IT systems portfolio
- •13.4 Quality of information systems
- •13.5 The providers of IT consulting services
- •Box 13.1 Choosing an IT consultant
- •13.6 Managing an IT consulting project
- •13.7 IT consulting to small businesses
- •13.8 Future perspectives
- •14.1 Creating value
- •14.2 The basic tools
- •14.3 Working capital and liquidity management
- •14.4 Capital structure and the financial markets
- •14.5 Mergers and acquisitions
- •14.6 Finance and operations: capital investment analysis
- •14.7 Accounting systems and budgetary control
- •14.8 Financial management under inflation
- •15.1 The marketing strategy level
- •15.2 Marketing operations
- •15.3 Consulting in commercial enterprises
- •15.4 International marketing
- •15.5 Physical distribution
- •15.6 Public relations
- •16 CONSULTING IN E-BUSINESS
- •16.1 The scope of e-business consulting
- •Figure 16.1 Classification of the connected relationship
- •Box 16.1 British Telecom entering new markets
- •Box 16.2 Pricing models
- •Box 16.3 EasyRentaCar.com breaks the industry rules
- •Box 16.4 The ThomasCook.com story
- •16.4 Dot.com organizations
- •16.5 Internet research
- •17.1 Developing an operations strategy
- •Box 17.1 Performance criteria of operations
- •Box 17.2 Major types of manufacturing choice
- •17.2 The product perspective
- •Box 17.3 Central themes in ineffective and effective development projects
- •17.3 The process perspective
- •17.4 The human aspects of operations
- •18.1 The changing nature of the personnel function
- •18.2 Policies, practices and the human resource audit
- •Box 18.1 The human resource audit (data for the past 12 months)
- •18.3 Human resource planning
- •18.4 Recruitment and selection
- •18.5 Motivation and remuneration
- •18.6 Human resource development
- •18.7 Labour–management relations
- •18.8 New areas and issues
- •Box 18.2 Current issues in Japanese human resource management
- •Box 18.3 Current issues in European HR management
- •19.1 Managing in the knowledge economy
- •Figure 19.1 Knowledge: a key resource of the post-industrial area
- •19.2 Knowledge-based value creation
- •Figure 19.2 The competence ladder
- •Figure 19.3 Four modes of knowledge transformation
- •Figure 19.4 Components of intellectual capital
- •Figure 19.5 What is your strategy to manage knowledge?
- •19.3 Developing a knowledge organization
- •Figure 19.6 Implementation paths for knowledge management
- •Box 19.1 The Siemens Business Services knowledge management framework
- •20.1 Shifts in productivity concepts, factors and conditions
- •Figure 20.1 An integrated model of productivity factors
- •Figure 20.2 A results-oriented human resource development cycle
- •20.2 Productivity and performance measurement
- •Figure 20.3 The contribution of productivity to profits
- •20.3 Approaches and strategies to improve productivity
- •Figure 20.4 Kaizen building-blocks
- •Box 20.1 Green productivity practices
- •Figure 20.5 Nokia’s corporate fitness rating
- •Box 20.2 Benchmarking process
- •20.4 Designing and implementing productivity and performance improvement programmes
- •Figure 20.6 The performance improvement planning process
- •Figure 20.7 The “royal road” of productivity improvement
- •20.5 Tools and techniques for productivity improvement
- •Box 20.3 Some simple productivity tools
- •Box 20.4 Multipurpose productivity techniques
- •Box 20.5 Tools used by most successful companies
- •21.1 Understanding TQM
- •21.2 Cost of quality – quality is free
- •Figure 21.1 Typical quality cost reduction
- •Box 21.1 Cost items of non-conformance associated with internal and external failures
- •Box 21.2 The cost items of conformance
- •21.3 Principles and building-blocks of TQM
- •Figure 21.2 TQM business structures
- •21.4 Implementing TQM
- •Box 21.3 The road to TQM
- •Figure 21.3 TQM process blocks
- •21.5 Principal TQM tools
- •Box 21.4 Tools for simple tasks in quality improvement
- •Figure 21.4 Quality tools according to quality improvement steps
- •Box 21.5 Powerful tools for company-wide TQM
- •21.6 ISO 9000 as a vehicle to TQM
- •21.7 Pitfalls and problems of TQM
- •21.8 Impact on management
- •21.9 Consulting competencies for TQM
- •22.1 What is organizational transformation?
- •22.2 Preparing for transformation
- •Figure 22.1 The change-resistant organization
- •22.3 Strategies and processes of transformation
- •Figure 22.2 Linkage between transformation types and organizational conditions
- •Figure 22.3 Relationships between business performance and types of transformation
- •Box 22.1 Eight stages for transforming an organization
- •22.4 Company turnarounds
- •Box 22.2 Implementing a turnaround plan
- •22.5 Downsizing
- •22.6 Business process re-engineering (BPR)
- •22.7 Outsourcing and insourcing
- •22.8 Joint ventures for transformation
- •22.9 Mergers and acquisitions
- •Box 22.3 Restructuring through acquisitions: the case of Cisco Systems
- •22.10 Networking arrangements
- •22.11 Transforming organizational structures
- •22.12 Ownership restructuring
- •22.13 Privatization
- •22.14 Pitfalls and errors to avoid in transformation
- •23.1 The social dimension of business
- •23.2 Current concepts and trends
- •Box 23.1 International guidelines on socially responsible business
- •23.3 Consulting services
- •Box 23.2 Typology of corporate citizenship consulting
- •23.4 A strategic approach to corporate responsibility
- •Figure 23.1 The total responsibility management system
- •23.5 Consulting in specific functions and areas of business
- •23.6 Future perspectives
- •24.1 Characteristics of small enterprises
- •24.2 The role and profile of the consultant
- •24.4 Areas of special concern
- •24.5 An enabling environment
- •24.6 Innovations in small-business consulting
- •25.1 What is different about micro-enterprises?
- •Box 25.1 Consulting in the informal sector – a mini case study
- •25.3 The special skills of micro-enterprise consultants
- •Box 25.2 Private consulting services for micro-enterprises
- •26.1 The evolving role of government
- •Box 26.1 Reinventing government
- •26.2 Understanding the public sector environment
- •Figure 26.1 The public sector decision-making process
- •Box 26.2 The consultant–client relationship in support of decision-making
- •Box 26.3 “Shoulds” and “should nots” in consulting to government
- •26.3 Working with public sector clients throughout the consulting cycle
- •26.4 The service providers
- •26.5 Some current challenges
- •27.1 The management challenge of the professions
- •27.2 Managing a professional service
- •Box 27.1 Challenges in people management
- •27.3 Managing a professional business
- •Box 27.2 Leverage and profitability
- •Box 27.3 Hunters and farmers
- •27.4 Achieving excellence professionally and in business
- •28.1 The strategic approach
- •28.2 The scope of client services
- •Box 28.1 Could consultants live without fads?
- •28.3 The client base
- •28.4 Growth and expansion
- •28.5 Going international
- •28.6 Profile and image of the firm
- •Box 28.2 Five prototypes of consulting firms
- •28.7 Strategic management in practice
- •Box 28.3 Strategic audit of a consulting firm: checklist of questions
- •Box 28.4 What do we want to know about competitors?
- •Box 28.5 Environmental factors affecting strategy
- •29.1 The marketing approach in consulting
- •Box 29.1 Marketing of consulting: seven fundamental principles
- •29.2 A client’s perspective
- •29.3 Techniques for marketing the consulting firm
- •Box 29.2 Criteria for selecting consultants
- •Box 29.3 Branding – the new myth of marketing?
- •29.4 Techniques for marketing consulting assignments
- •29.5 Marketing to existing clients
- •Box 29.4 The cost of marketing efforts: an example
- •29.6 Managing the marketing process
- •Box 29.5 Information about clients
- •30 COSTS AND FEES
- •30.1 Income-generating activities
- •Table 30.1 Chargeable time
- •30.2 Costing chargeable services
- •30.3 Marketing-policy considerations
- •30.4 Principal fee-setting methods
- •30.5 Fair play in fee-setting and billing
- •30.6 Towards value billing
- •30.7 Costing and pricing an assignment
- •30.8 Billing clients and collecting fees
- •Box 30.1 Information to be provided in a bill
- •31 ASSIGNMENT MANAGEMENT
- •31.1 Structuring and scheduling an assignment
- •31.2 Preparing for an assignment
- •Box 31.1 Checklist of points for briefing
- •31.3 Managing assignment execution
- •31.4 Controlling costs and budgets
- •31.5 Assignment records and reports
- •Figure 31.1 Notification of assignment
- •Box 31.2 Assignment reference report – a checklist
- •31.6 Closing an assignment
- •32.1 What is quality management in consulting?
- •Box 32.1 Primary stakeholders’ needs
- •Box 32.2 Responsibility for quality
- •32.2 Key elements of a quality assurance programme
- •Box 32.3 Introducing a quality assurance programme
- •Box 32.4 Assuring quality during assignments
- •32.3 Quality certification
- •32.4 Sustaining quality
- •33.1 Operating workplan and budget
- •Box 33.1 Ways of improving efficiency and raising profits
- •Table 33.2 Typical structure of expenses and income
- •33.2 Performance monitoring
- •Box 33.2 Monthly controls: a checklist
- •Figure 33.1 Expanded profit model for consulting firms
- •33.3 Bookkeeping and accounting
- •34.1 Drivers for knowledge management in consulting
- •34.2 Factors inherent in the consulting process
- •34.3 A knowledge management programme
- •34.4 Sharing knowledge with clients
- •Box 34.1 Checklist for applying knowledge management in a small or medium-sized consulting firm
- •35.1 Legal forms of business
- •35.2 Management and operations structure
- •Figure 35.1 Possible organizational structure of a consulting company
- •Figure 35.2 Professional core of a consulting unit
- •35.3 IT support and outsourcing
- •35.4 Office facilities
- •36.1 Personal characteristics of consultants
- •36.2 Recruitment and selection
- •Box 36.1 Qualities of a consultant
- •36.3 Career development
- •Box 36.2 Career structure in a consulting firm
- •36.4 Compensation policies and practices
- •Box 36.3 Criteria for partners’ compensation
- •Box 36.4 Ideas for improving compensation policies
- •37.1 What should consultants learn?
- •Box 37.1 Areas of consultant knowledge and skills
- •37.2 Training of new consultants
- •Figure 37.1 Consultant development matrix
- •37.3 Training methods
- •Box 37.2 Training in process consulting
- •37.4 Further training and development of consultants
- •37.5 Motivation for consultant development
- •37.6 Learning options available to sole practitioners
- •38 PREPARING FOR THE FUTURE
- •38.1 Your market
- •Box 38.1 Change in the consulting business
- •38.2 Your profession
- •38.3 Your self-development
- •38.4 Conclusion
- •APPENDICES
- •4 TERMS OF A CONSULTING CONTRACT
- •5 CONSULTING AND INTELLECTUAL PROPERTY
- •7 WRITING REPORTS
- •SUBJECT INDEX
Management consulting
Box 26.3 “Shoulds” and “should nots” in consulting to government
“Shoulds” that work
1.Show knowledge of the agency’s methods, procedures and processes.
2.Demonstrate genuine interest in the public sector work environment and the difficulties faced by public servants.
3.Learn the specialized jargon.
4.Understand how the agency is measured.
5.Treat each government employee as an individual, separate from governmental stereotypes.
6.Match your own staff qualifications closely to the agency’s requirements.
7.Recognize that decisions often take longer than in business.
8.Respect the fiscal year constraint.
9.Identify and meet the client’s perception of a good job.
“Should nots” that don’t work
1.Refrain from a hard-sell approach.
2.Avoid designing projects that require a great deal of interdepartmental cooperation.
3.Don’t just finish a project but “ease into the completion”, suggesting review steps and follow-up activities.
4.Don’t forget to keep the client fully informed and closely involved, even if the client tries to avoid responsibility.
5.Don’t underestimate the role of the written agreement, especially with deliverables.
Source: W. P. Cordeiro and S. A. Bartik, “How to consult to government”, in Journal of Management Consulting (Milwaukee, WI), Fall 1993, pp. 20–24.
solutions that the client can accept as his or her own and defend with superiors, elected public bodies and even with the public at large. It is important to believe that quality public services are essential to the life and development of the community, including healthy development of the private sector. A negative and unduly critical attitude to public sector managers and other civil servants is counterproductive and inhibits effective problem-solving.
26.3Working with public sector clients throughout the consulting cycle
Marketing
Most marketing to the public sector (development of leads and identification of consulting projects) is through networking and personal contacts. A good network can only be developed over the course of time and requires constant
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effort to maintain. In a limited number of cases, it can lead to direct selection, but more often will facilitate pre-selection and shortlisting.
Most large assignments in the public sector are awarded on the basis of competitive bids; the success ratio of firms bidding competitively varies but is not very high, and preparing proposals is both expensive and time-consuming. Consultants are therefore well advised to develop an efficient process for competitive bidding and to try to maximize their chances of repeat business, which is much less expensive to obtain than is new business. It is useful to develop some business as sole-source, directly awarded contracts: these are generally small, but are relatively inexpensive to obtain and permit consultants to build up and maintain good client contacts.
Selection through public procurement
The selection of consultants, as indeed of other goods and services, has to comply with legislation and rules applied to public procurement in general. A general description of consultant selection is given in Chapter 7 and Appendix 1. What, then, is typical of the public sector? Invariably, formal, precisely defined and structured procedures are used. Most probably there will be an official document, issued by a government agency, which describes the procedure and criteria for selecting a consultant and provides information and guidelines, contract clauses, forms and the like.
The reasons for the use of mandatory formal procedures in the public sector can be summarized as follows:
●to give all eligible candidates the same chance;
●to increase the probability of identifying and choosing the most suitable consultant;
●to make selection “transparent” and less open to criticism;
●to reduce the risks of favouritism, nepotism and corruption;
●to harmonize the approaches used and transfer good experience among various government departments and public agencies;
●to improve the overall quality of consultant selection and appointment in a complex public sector environment.
As a rule, the procedure separates project identification and the drafting of terms of reference from project implementation. A consultant who helps the client to develop a new project idea, analyse the situation and the client’s needs, and produce the terms of reference is regarded as an “insider” and is not usually authorized to participate in the bidding for project execution. The consulting process is thus split into two separate phases, for which different consultants are engaged. This can create technical difficulties and discriminates against the consultants who do the creative and conceptual work of designing the project and producing terms of reference. Conversely, consultants who implement a project may not feel responsible for conceptual flaws because they follow the
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instructions – which may be very detailed – in the terms of reference. They can always refer to the terms that were given to them if the client is not happy with the focus of the assignment and the results produced.
Data banks. Many public sector organizations maintain a data bank of consultants. These data banks may have thousands of consultants and consulting firms, classified by skill areas. In some cases, registration with the relevant data bank is a prerequisite to receiving invitations to make a proposal or being eligible to supply services.
Competitive bids. Depending on the size of the proposed consulting assignment, competitive bids may be requested from consulting firms or individual consultants. Bid documents must generally conform to detailed specifications; failure to respect these specifications leads to the disqualification of the bidder. The evaluation procedures of these bids also depend on the size of the proposed assignment: the criteria, and often the results, are usually available to the bidder.
Budgetary constraints. There may be a strict budgetary constraint limiting the size of the assignment, or predetermining its time schedule.
Managerial discretion. Despite the predominance of formal procedures, public sector procurement of consulting is not totally inflexible. As a rule, small assignments may be arranged by direct selection or using simplified procedures. In certain cases, the appointment of consultants who have done a satisfactory job may be authorized for further services related to the previous job.
Contracting
Both consultants and public sector client agencies may have their standard contract formats. In such a situation, the consulting firm will normally be more flexible and agree to accept its client’s mandatory contract format. Several aspects of contracts with public sector clients (see also Chapter 7 and Appendix 4) ought to be stressed:
●Definition of results should be clear and detailed (what results, including their quantity and quality, who will identify and endorse results, who will assess quality, who will have the final word).
●There needs to be a clear understanding of what is meant by implementation and how far the consultant should go, e.g. in implementation of a new system, what is understood by “system”? Does the consultant have to deliver a preliminary proposal, complete documentation, a system that works, a system plus trained staff to operate it, a system that has attained agreed parameters? etc.
●The participation of the client’s management and staff should be specified precisely, especially for projects that cannot be completed without this participation.
●Confidentiality is a key issue.
●The consultant’s right and obligation to contact directly and consult the public administration’s own clients, users and stakeholders should be specified.
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●The fee structure should be clear (what is reimbursable and at what rates, e.g. subsistence allowances, first-class air tickets or hospitality expenses).
●The budget and payments structure and schedule should be clear (to comply with budgetary and payment periods and procedures of clients).
●The fee levels should be specified. Requests for proposals generally ask for detailed information on pricing, including the daily rates and time allocation of individual consultants. Often maximum or set fee rates are established by regulations, and these may be below market rates in the private sector.
Implementation
Many experienced consultants consider that in the public sector, people and process problems prevail over technical problems. It is important to adopt an approach that includes full consultation and communication with all stakeholders. Consultants can be excessively idealistic or tempted to recommend the best theoretical solutions. While there is academic satisfaction in finding a “best” solution, what matters most is finding solutions that are practical, acceptable and stand a good chance of being implemented. A recommendation that leads to real change is worth any number of elegant reports that will gather dust on the shelf. Full consultation will ensure that conclusions and recommendations do not surprise and antagonize stakeholders, although it is in the nature of societal problems that not all stakeholders will be equally satisfied with a recommendation.
As with all consulting, public sector assignments must be managed for quality, scheduling and budget. Perhaps the greatest risk with public sector work lies in inadequately forecasting the amount of time necessary for working with stakeholders and for the decision process in general. There are no short cuts in the process of consultation with stakeholders, and neglecting this process can have painful consequences. Another characteristic of most public sector assignments is the need to produce well-edited reports: these documents are, or might be, made public and care and time should therefore be given to their production.
26.4 The service providers
The market for management consulting services in public administration is large and challenging. With the current changes and new challenges, the demand for public sector consulting in many countries is likely to remain stable or even increase in the future.
Private consulting firms
Many public sector assignments are large and complex enough to require the resources and experience of large consultancies that can mobilize multifunctional consultant teams and run parallel activities in a number of public
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agencies. Indeed, all major consultancies on the international scene have worked for governments and consider public sector contracts to be a standard and fairly stable part of their service portfolio. Some consultancies are known as specialists in certain fields, e.g. in consulting to local government or national health administrations. However, various projects provide opportunities for smaller consulting firms and also for individual consultants, especially if they become known to civil servants as specialists in their fields of activity.
Institutes and schools of administration and management
Institutes and schools of administration and management tend to regard consulting to government not only as a source of income, but as a service that is complementary to training and education and provides the institution with needed insights into the administrative and decision-making practices of the public sector. Governments, in turn, seek the advice of professional researchers and educators from both public and private institutions on a broad range of issues, especially in the fields of public policy, policy analysis, strategies of government modernization and reform, service ethics and staff development. Professors of law, political science, public administration and management are often chosen as senior advisers to government institutions and members of various expert committees. Their influence on changes in public administration can be considerable.
Internal consulting groups
In marketing services to the public sector, management consultants must also be aware of the frequent presence of internal consulting groups within public sector organizations (see also section 2.6). While the number of these groups has been decreasing, they still exist in many countries. Some of them provide free consulting services to government clients, while others charge fees (as a rule subsidized) for their services. The range of services provided varies significantly: some groups provide only limited services such as personnel and audit, while others provide a wide range of services.5
The procedures for public sector managers purchasing the services of internal consulting groups are generally simpler than those that apply to private sector purchases. Most internal consulting groups complement their own resources by hiring consultants on subcontract from the private sector, and can therefore be valuable clients for private sector consultants. Some internal consulting groups also manage other consultants on behalf of an agency and provide information to government on consultants’ competencies and profiles and on competitive fee rates. On the rare occasion that an internal consulting group is fully dependent on revenue, i.e. self-financing, it can provide a yardstick for reasonable fee rates for consultants hired by government.
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