MGMT 422 TEST 1 STUDY GUIDE
Management Consultants - Answer -All share a rigorous, data-driven thought process and a
commitment to tackling their client companies' biggest issues.
Current Changes in Consulting Industry - Answer -Amidst structural changes in the consulting
industry, the industry has continued to grow.
Many notable players have seen growth in consulting revenues between 5-16%.
MBA and PhD salaries are rising
Undergraduate/master's salaries relatively stable.
Nature of Consulting - Answer -Trust
Confidentiality
Aggie Culture helps here
Consulting skills - Answer -High level thinking abilities
Presentation skills
Analytic skills
Power Point skills
High EQ
High energy
Management Consulting History - Answer -Growth & complexity of the largest industrial
organizations in US = market for professional firms.
1890's Arthur Little began offering chemical engineering consulting services.
American firms hired accounting firms to provide external audits & financial controls.
Scientific Management by Frederick Taylor (Taylorism).
Management Consulting History Part 2 - Answer -Management Consulting focus was
organizations.
Merchant bankers had their own internal consultants.
1900's accounting firms in U.S. expanding their roles.
Law firms expanding their roles.
Engineering firms provided accounting.
1/7
, Accounting firms marketed themselves as engineers.
1890's most firms started by professionals & professors (MIT).
Scientific Management by Frederick Taylor (Taylorism) - Answer -Shop Productivity.
Time-motion studies, assembly line design, experience curve.
Shop Management focus vs organizational issues.
Who was the first management consulting firm? - Answer -Arthur D. Little
1914 Booz Allen Hamilton in Chicago - Answer -First to serve both industry & government clients.
McKinsey & Company - Answer -1926 James McKinsey started McKinsey in Chicago.
"Mac" was an accountant and lawyer by training.
First to offer pure management consulting.
Partner, Bower, "We are a professional firm like lawyers & doctors."
1st to hire MBAs (vs industry personnel).
Worked to systematize the process of client solicitation and managing projects.
Glass-Stegall Act of 1933 - Answer -Reaction to Stock Market Crash in October 1929.
Divided investment & deposit-taking functions.
Commercial banks.
Investment Banking.
Commercial banking - Answer -Non-banking activities prohibited.
J.P. Morgan remained a commercial bank.
Investment banking - Answer -Could not use internal consultants to certify new issues.
Morgan, Stanley, & Company formed to manage investment banking.
Result of the Glass-Stegall Act of 1933 - Answer -Business executives encouraged by banks to
hire management consultants.
2/7
Management Consultants - Answer -All share a rigorous, data-driven thought process and a
commitment to tackling their client companies' biggest issues.
Current Changes in Consulting Industry - Answer -Amidst structural changes in the consulting
industry, the industry has continued to grow.
Many notable players have seen growth in consulting revenues between 5-16%.
MBA and PhD salaries are rising
Undergraduate/master's salaries relatively stable.
Nature of Consulting - Answer -Trust
Confidentiality
Aggie Culture helps here
Consulting skills - Answer -High level thinking abilities
Presentation skills
Analytic skills
Power Point skills
High EQ
High energy
Management Consulting History - Answer -Growth & complexity of the largest industrial
organizations in US = market for professional firms.
1890's Arthur Little began offering chemical engineering consulting services.
American firms hired accounting firms to provide external audits & financial controls.
Scientific Management by Frederick Taylor (Taylorism).
Management Consulting History Part 2 - Answer -Management Consulting focus was
organizations.
Merchant bankers had their own internal consultants.
1900's accounting firms in U.S. expanding their roles.
Law firms expanding their roles.
Engineering firms provided accounting.
1/7
, Accounting firms marketed themselves as engineers.
1890's most firms started by professionals & professors (MIT).
Scientific Management by Frederick Taylor (Taylorism) - Answer -Shop Productivity.
Time-motion studies, assembly line design, experience curve.
Shop Management focus vs organizational issues.
Who was the first management consulting firm? - Answer -Arthur D. Little
1914 Booz Allen Hamilton in Chicago - Answer -First to serve both industry & government clients.
McKinsey & Company - Answer -1926 James McKinsey started McKinsey in Chicago.
"Mac" was an accountant and lawyer by training.
First to offer pure management consulting.
Partner, Bower, "We are a professional firm like lawyers & doctors."
1st to hire MBAs (vs industry personnel).
Worked to systematize the process of client solicitation and managing projects.
Glass-Stegall Act of 1933 - Answer -Reaction to Stock Market Crash in October 1929.
Divided investment & deposit-taking functions.
Commercial banks.
Investment Banking.
Commercial banking - Answer -Non-banking activities prohibited.
J.P. Morgan remained a commercial bank.
Investment banking - Answer -Could not use internal consultants to certify new issues.
Morgan, Stanley, & Company formed to manage investment banking.
Result of the Glass-Stegall Act of 1933 - Answer -Business executives encouraged by banks to
hire management consultants.
2/7
