Introduction
The topic of management consulting is currently relevant because a large number of companies resort to business consulting services. This is done for various reasons, such as changing the company’s strategy, improving its efficiency and profitability, or reorganizing its personnel policy. The issue of change and counseling discussed in this article is the relationship between management and counseling issues and their influence on each other. The study of the problems of cooperation between consulting and business is one of the essential aspects of this paper. To better understand how these components work, the article also discusses each component separately, consulting and management. O’Mahoney et al. (2021) argue that management consulting is one of the most critical aspects of management knowledge. Moreover, this is true because it is often difficult to achieve the desired results without consulting, especially for young companies.
One of the crucial components of successful cooperation between managers and consultants is their communication. The contact between the parties impacts whether clients are satisfied because such cooperation is not due to the consulting firm’s marketing strategy and the client’s initiative (Raišienė & Raišys, 2022). However, besides this, several vital components affect the results of the joint work of the client and the consulting company. This is, for example, a possible rejection by the company’s staff of its changes. This phenomenon can manifest itself in organizations with a well-formed corporate culture for a long time. This question is not too common, but it requires further study.
The demand for consultants’ services is determined by the fact that the managerial tasks that company managers face in practice are characterized by multi-criteria and uncertainty about the future results of decisions made. This is part of the difficulty in managing organizational change. During strategic development, management decisions should be well thought out and taken comprehensively (Selyutina, 2018). Otherwise, the consequences may be discord in the organizational work of the company, and none of the changes will work as intended. According to Guo (2020), “decision-making is inherent in all managerial functions and is closely related to the planning function” (p. 118). In addition, today’s best decision is the best decision only at the time of its adoption.
Not fully explored to date is the question that consulting can be a significant factor in the success of an organization. In addition, this article will look at management and how it relates to the changes that counseling brings. Another purpose of this work is to identify the main aspects and functions of management consulting in organizational change.
Connecting Sessions
Scope of Consulting
To understand what consulting ideas have remained underestimated in management, one should analyze what consulting is. In order to understand what consulting is, it is necessary to consider how different researchers designate it. The term management consulting means professional management assistance to managers and management personnel in the subject area of their interests – the analysis and solution of problems and tasks of the functioning and development of the organization. As Sturdy (2018) states, “consulting products can be seen to emerge as a response to various problems experienced by different client communities” (p. 79). One of the areas of management consulting is advising on organizational changes and the company’s development strategy implementation. According to Malikova (2020), “Consulting refers to management recommendations provided by external consultants on a wide range of financial, legal, technological, technical and expert activities” (p. 169). Different researchers give different designations of consulting, but after analyzing them all, one can derive its universal definition. Consulting is an external intervention in the form of advice in the work of an organization in order to improve its performance.
Consultants do not carry out changes in companies without reason. For this, it is necessary to conduct an internal study and understand the company’s needs. Analyzing the periodicity of imbalance allows for timely planning of upcoming organizational changes that bring the production system into a relatively equilibrium state but at a qualitatively new level. Therefore, in the conditions of the required changes, each organization is forced to solve two main problems: to survive in a changing environment and to cooperate and integrate to avoid falling apart under the influence of internal contradictions and conflicts. Brunetto & Teo (2018) give examples of the need for organizational change, such as “the need to engage in greater collaboration and enhance networks, and the devolution and delegation of authority and autonomy” (p. 149). All of the above reasons can be a reason for management to resort to the services of consulting companies.
Often consulting firms advise clients on how to integrate management skills into their organizations. At the same time, they are expected to have huge potential and growth in this direction. Knowledge sharing is a complex issue due to a lack of trust, competitiveness, fear of criticism, and lack of time (Brandi & Elkjaer, 2019). Such aspects as the main factors of change, strategies for organizational change, consulting in management, its type, and strategy in the development of companies will be studied. Despite the usefulness of advisory interventions, “Consultation programs need to be regularly evaluated for effectiveness, and the evaluation process itself needs to be periodically reviewed” (Pierce et al. 2022, p. 2). In addition, attention will be paid to issues related to marketing consulting and the impact of consulting on the factors of organizational change. One of the tasks consultants solve is the introduction of centralized management in organizations. Nissen et al. (2018) state, “Decentralized management occurs when there is no formalized product development or innovation management” (line 215). This issue is important because many companies have the wrong approach to the organizational change process, do not know how to use management consulting effectively, and, as a result, fail in the market.
Many may fail to manage their organizations by underestimating the value of consulting. As Weiss & Ballenger (2019) argue, management consulting is still a poorly understood issue. Moreover, even within the same interaction, the subject is controlled by the object, which acts as the subject of control in this case. The qualitative aspect of management, as we see, is now primarily due to the role assigned by managers to both the subject and the object of the management process.
In this regard, management consulting can be attributed to the subject of management, which combines the main functions of good leadership. According to Wandiga et al. (2019), the “management consulting business has proliferated over the past few years because of the expansion in economic activity” (p. 470). A modern manager needs it, acting on the one hand as an organization – a client, object of management.
The main operating tool of a consultant in any field of activity is his knowledge and skills. It is thanks to them that it becomes possible to implement significant positive changes in management activities. Barthélemy (2017) argues that consultants’ knowledge comes from two sources, experience gained through work and experience from theoretical training. This suggests that one cannot become a professional consultant only by studying the theoretical aspects of work. Each consultant is distinguished by professional features, strengths and weaknesses, level of influence, public authority, and recognition. External consultants in the form of independent consulting firms or individual consultants with a specialization provide management consulting services based on relevant contracts or agreements. With a specific skill set, a consultant can work in more depth and detail with every aspect of the client’s firm (Bergh & Gibbons, 2011). This, in turn, allows to apply more fundamental changes in the management structure.
Consulting Models for Change
From the point of view of methods, the following forms of counseling can be distinguished: expert, process, and training. The model is selected depending on the problem being solved, the client organization’s characteristics, and the consultants’ skills, experience, and personal qualities. In this study, it was found that the tasks that a consulting company must solve can be divided into several. Thus, the client can conclude contracts with two or three consultants at once, delegating the solution to various tasks to them, as shown in Diagram A. The fields in which organizational theory and strategy are applied using different methods to understand the different structures of organizations better and select the appropriate system of mechanisms (Joseph & Gaba, 2020). The disadvantage of this model is that the consultant develops a recommendation without conducting an independent analysis of the situation. Implements the changes, again, the client himself. It is advisable to use the model if it is necessary to gain knowledge of standard procedures and standards.
The consultant not only collects ideas and analyzes solutions but also prepares the ground for their emergence, providing the client with relevant theoretical and practical information in the form of lectures, training and business games. When external and internal consultants collaborate, staff training can be implemented, especially in change management (Hobbs, n. d.). Consultants at all stages of the project actively interact with the client, encouraging him to express his ideas, considerations, and suggestions, critically correlate with ideas proposed from outside, conduct problem analysis, and develop solutions with the help of consultants. Rustamova et al. (2021) state that “The effectiveness of the information and consulting service is due to many factors, including the right choice of its organizational and legal form” (p. 3). At the same time, the role of consultants is to collect these external and internal ideas, evaluate the solutions obtained in working with the client, and bring them into a system of recommendations.
Way of Organizational Consulting
As discussed above, hiring consultants is an effective way to bring about organizational change. According to Nissi & Hirsto (2021), consulting can touch on various managerial, organizational, and leadership practices, from organizational restructuring to strategic planning. Van de Ven (2021) states that “These changes vary greatly in frequency, size, novelty, and temporal duration” (p. 437). The involvement of consultants allows the organization to receive methodological assistance in ensuring ongoing changes. According to Lee et al. (2021), “many organizations have established in-house innovation departments or design capabilities to foster change management and navigate uncertainties” (p. 406). In the course of consulting, the staff is trained, and the methods of effective management of the organization are transferred to its employees.
In addition, consultants can create a new organizational culture through the changes they make. Sturdy (2021) argues that the value of consulting is centered on enhancing organizations’ financial and organizational capabilities. Consulting can be aimed at training staff for new opportunities, this is one way to achieve changes. Business consulting issues include many areas, such as business strategy, financial and accounting management, and human resources (Lee & Seo, 2018). In addition to developing solutions to problems, consultants can help managers implement them. Brancu & Hayes (2020) argue that one of the consulting challenges is the inconsistency of terms within and across fields. If the advisory intervention is done correctly, the changes in the future will lead to the constant growth of the company and not the minute-by-minute result. Professional consulting has strict requirements for the quality of its services since companies that want to carry out organizational changes depend on the results of their work.
Novel Insights
Managing and Consulting Changes
Change management occurs at three levels, and the first is the change of projects – a particular sequence of actions aimed at solving a specific problem or satisfying a need. When a company becomes diversified and focused on achieving its goals, accounting norms can conflict with advisory boards (Kowaleski et al., 2018). These actions can be successful in the short term, primarily if they are focused, result-oriented, and do not violate the company’s traditions. The second level is change programs, related projects designed to have a cumulative organizational impact. In this case, success depends not only on the quality of the project or the methods of its implementation but on how each project is linked to other company activities. The third level is the agents of change – organizations that can continuously innovate, improve and do it at a pace ahead of competitors. The middle management executive is typically the primary beneficiary of consultancy services (Mauerer, 2019). The main phases of positive change are forming a launching pad, designing a desirable future, identifying the prospects of workers for the projected future, analyzing and ranking the collected ideas, and monitoring organizational progress.
From here, many can highlight some of the main effects that organizational consulting should have. Firstly, this is an increase in the efficiency of the work of structural divisions, vertical and horizontal consistency, distribution of responsibility, and improvement of dispositional management with an emphasis on the marketing service. Secondly, reducing risks, reducing the possibility of acceptable economic risks, increasing the company’s adaptability to changes and the needs of the external environment, and increasing competitiveness.
In many ways, organizational changes depend on how the company is focused on its client and on helping him change management. Cooperation between the consulting agency and the client’s firm is important for productive work on managerial changes. Thus, the main success factors in managing complex organizational changes include assessing the external environment, consulting for changes, linking strategic and operational changes, human resources, and alignment.
Consulting as a Mandatory Factor in the Success of Organization
The most detailed diagram of the components of an organization subject to change consists of four components: goals, people, structure, and technology. Additionally, Stouten et al. (2018) argue that one of the main challenges managers face in implementing organizational change is the difficulty of learning from experience. All components are connected both in pairs and as a whole. Therefore, even a minimal change in each of them leads to changes in the other three and the entire organization. Pang et al. (2019) state that “To measure the contributions of more accurate predictions, the consulting service company’s contribution is defined as the power output/load corrections – the difference between the power output/load gaps with and without consulting services” (p. 948). Different rates of change can lead to an imbalance in the entire system, tension in the interaction of components, conflicts, and crises.
At the same time, the impact on any component can be carried out not only directly but also indirectly, that is, through other components. According to a study by Bruhn et al. (2018), consultants note that in the companies where they work there is often no clear understanding of the goals and strategies for the organization’s future work. Therefore, a change in the company’s strategy often leads to a change in personnel, and the emergence of departments can lead to a revision of the organization’s goals. Often, changes initiated by management cause conscious or unconscious resistance from employees.
One of the reasons why consulting is a significant factor in a company’s future success is that consulting takes place over a limited time frame. This allows the organization to implement the necessary changes in time. According to McGivern et al. (2018), “How organizations and the problems they face are constructed also affects the legitimacy of time frames and related approaches to organizational change” (p. 1009). Therefore, consultants and managers should take a diagnostic approach to change management problems. For each specific organizational situation, it is necessary to develop its version of interrelated activities, which should determine the policy of change, the system of motivation and activation of personnel, and the strategy for managing the transition to the state as it should be. According to Coban et al. (2019), companies “which manage the organizational change have adapted themselves to a changing society, and therefore, they become more durable” (p. 130). Effective change management allows the company to move quickly to a sustainable development path. The transition to sustainable development is not idle reasoning of business analysts and not another whim of the authorities. It is an objective necessity, an essential condition for ensuring business competitiveness.
Conclusion
Summing up all the studied materials on consulting and its role in organizational changes, we can say that this area needs further study. Consulting plays a critical role in companies that want to improve their operations and profitability. This conclusion can be drawn because the main factors of managerial changes are an independent assessment of the company’s current strategy. Only a specialist invited from outside can objectively evaluate the organization’s work. To do this, he must have the necessary skills and understand the field of activity of the client organization. In addition, during the study, the connection between consulting and implemented changes became evident. These factors are directly related because the management of organizations often remains conservative and does not see the shortcomings of their management strategy. In conclusion, it can be said that the work of consulting agencies remains the most crucial factor in improving the company’s policy.
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