When a business grows, crossing the boundaries defined by limited internal resources, it pays to engage the services of external business management consultants. Large business management consulting houses such as McKinsey and Company or PricewaterhouseCoopers, pride in their vast exposure to handling wide ranging business complexities under differing international conditions.
Businesses become complex as time passes by and handling them is a new challenge. Businesses house of all types and sizes depend on external experts and management consultants, who analyze the situation on hand and optimize the possible, profitable way ahead. This may include ways to improve the firm’s structure, efficiency and returns.
When fast growing companies in the small sector find it difficult to manage various aspects of their business, like inventory control, expenses, and legal matters, they have two options to choose from:
1. They recruit managers with proven expertise
2. They hire the services of external business management consulting agencies
The latter option always gives the firms the cost benefit over recruiting managers, without the long-term commitment. Normally, small businesses are served by small consulting firms which range in size from a single practitioner firm to a team of professionals.
Why Large Corporations Hire Business Consultants
The spread and expanse of large, multibillion-dollar corporations involves operations in complex situations besides being engaged in a variety of transactions. They may not find it worthwhile doing onetime operations and tasks themselves. Other circumstances when large corporations engage management consulting firms include:
1. Market research and site selection for their offshore expansion plans to help make decision on a new venture.
2. To explore the possibilities of merger and acquisition of a firm engaged in the same line of business or a related one, and to help complete the legal, corporate, as well as financial formalities.
3. Fund raising through either of the IPO, private placement of instruments of investment or loans and venture capitals including fulfilling statutory requirements
Vertical and Horizontal Expertise of Business Management Consulting Firms
Most consulting firms specialize in specific lines of businesses. You might have heard of Public Issue Management firms or firms specializing in Market Research and Finance Management and so on. Such consulting firms can be termed as vertically specialized in their fields, while companies like McKinsey & Company are experts in multiple areas of business conducting right from financial auditing to offshore acquisitions and can be termed as firms with horizontal specialization.
Business Management Consulting Firms, by their virtue of experience of having handled various situations will have a practical approach to problem solving. This is another plus in their favor.