Preferred supplier programs for consulting services: An exploratory study of German client companies

Research has recently provided evidence that at least some companies have involved purchasing departments in buying professional services such as management consulting services. Some departments have established preferred supplier programs (PSPs) for consulting services, i.e., programs for consultancies with whom a company seeks to build up long-term relationships. While there are several studies that analyze such programs for suppliers of goods, research on business services is limited. Our aim is to present an exploratory analysis of PSPs for consulting services. Based on a survey of German client companies, we found that the most important reason for establishing PSPs is to reduce costs and transaction costs. Furthermore, our findings revealed that companies with and without PSPs for consulting services apply high significance to relational selection criteria. Moreover, in companies with PSPs, purchasing departments are more frequently involved in selecting consultancies compared to companies without PSPs. Finally, we found that companies with and without PSPs do not differ in their assessment of problems associated with the purchasing of consulting services. The study contributes to research on the purchasing of consulting services by indicating that the consultant–manager relationship should be extended to a service triad, involving purchasing professionals, managers, and consultants. Moreover, we contribute to research on PSPs by extending the focus to PSPs for knowledge-intensive service providers.     

Management consultants as improvising agents of stability

Relatively few studies have paid theoretical as well as empirical attention to what use organizations have of management consultants and their services. By studying how buyers and sellers of management consulting services describe what management consulting is and represents, this study questions common understandings in the literature, i.e., that management consultants act as agents of change or as standardizers of organizational practice around the world. It is argued that consultants can be understood as playing the role of improvisers because there is considerable uncertainty among both buyers and sellers as to what use organizations really have of them. Playing a recognizable, yet indefinite role based on an institutionalized foundation, in both discourse and practice, of what actors such as consultants are supposed to do in certain situations, helps client organizations to reduce the uncertainty experienced. The conclusion is that management consultants can therefore be understood as agents of stability rather than agents of change.     

Meaningful involvement of municipal purchasing departments in the procurement of consulting services: Case studies from Ontario, Canada

This paper describes the types of activities that were associated with meaningful involvement of municipal purchasing departments in the procurement of consulting services in Ontario, Canada. Included is a discussion of some of the key contextual factors found to enable meaningful involvement and the type of value that results as it relates to the needs of the client department and the overall goals and objectives of the municipalities as a whole. Ten case studies were conducted that involved in-depth interviews with twenty case study informants including ten purchasing agents, nine client department managers, and a consultant. The findings provide a basis for increasing the involvement of municipal purchasing departments in acquisition processes for these services and address some very important gaps in a particularly arid body of research related to local government purchasing. A number of testable hypotheses and research questions that may enable future researchers to address some of the gaps identified by this work are also presented.     

The Stock Market Reaction to the Hiring of Management Consultants: A Signalling Theory Approach

Drawing from signalling theory, this study examines how the stock market reacts to the public announcement of the hiring of management consultants and whether it differentially values clients on the basis of their financial profitability and the brand‐name of the engaged consultant. An event study analysis of 118 client firms that publicly announced the hiring of management consulting firms finds that the stock market, on average, responded positively and significantly to the engagement news. Regression analysis further reveals that the stock market reaction tended to be the highest for client firms that had the highest profitability levels. In addition, the stock market reaction to the hiring announcement was not related to the consultant's brand‐name reputation; clients engaging the most reputable consultants (e.g. McKinsey & Company, Bain, Boston Consulting Group, Booz‐Allen Hamilton) did not realize any different market response than those clients that employed the other consultants. Overall, most client firms that publicly announced the hiring of management consultants experienced a rise in their market value and those that had the highest financial profitability realized the highest increase. Further, the findings imply that there may be boundaries to reputational spillover benefits in partnering relationships.     

Knowledge transfer across permeable boundaries: An empirical study of clients’ decisions to involve management consultants

We investigate the relationship between the knowledge requirements of projects and clients’ decisions whether to procure services from external management consultants for the execution of these projects. Using data from interviews with client decision-makers regarding the execution of 86 projects, we find that knowledge requirements are strongly associated with the decision whether or not to involve external consultants. The results highlight the closeness of the relationships between clients and consultants, supporting Kitay and Wright's [Kitay, J., & Wright, C. (2004). Take the money and run? Organisational boundaries and consultants’ roles, The Service Industries Journal, 24(3) 1–18] view of the permeability of the boundaries between many client organizations and their consultants. The findings also confirm our expectation that clients use the services of external management consultants in order to procure functional or industry-specific knowledge which consultants can pool and apply efficiently across many projects.     

Unpacking the client(s): Constructions, positions and client–consultant dynamics

Research on management consultancy usually emphasizes the role and perspective of the consultants. Whilst important, consultants are only one element in a dynamic relationship involving both consultants and their clients. In much of the literature, the client is neglected, or is assumed to represent a distinct, immutable entity. In this paper, we argue that the client organisation is not uniform but is instead (like organisations generally) a more or less heterogeneous assemblage of actors, interests and inclinations involved in multiple and varied ways in consultancy projects. This paper draws upon three empirical cases and emphasizes three key aspects of clients in the context of consultancy projects: (a) client diversity, including, but not limited to diversity arising solely from (pre-)structured contact relations and interests; (b) processes of constructing ‘the client’ (including negotiation, conflict, and reconstruction) and the client identities which are thereby produced; and (c) the dynamics of client–consultant relations and how these influence the construction of multiple and perhaps contested client positions and identities.     

Heterogeneity in Professional Service Firms

Research on professional service firms emphasizes similarities in their organization and management and distinctiveness from other types of organization. In this paper we take a different tack and focus on the differences between professional service firms, that is, on heterogeneity across different professional sectors. We argue that differences between professions on a number of dimensions affect the nature of professionals' work and, in turn, the organization and management of firms across different professional sectors. Drawing on the sociology of professions literature we focus on three key dimensions of knowledge, jurisdictional control and client relationships to compare legal, auditing and engineering consulting firms. We consider how differences in these dimensions across the three professional services sectors impact upon the way firms are organized. We offer a number of propositions explicating how differences in the nature of knowledge, jurisdictional control and client relationships have implications for organizational form, team-working and pricing systems.     

The expert system: constructing expertise in an IT/management consultancy

Despite widespread uncertainty, if not scepticism, about the precise nature of the expertise that consultants bring to bear in their client engagements, organisations continue to employ consultants in large numbers, especially in information technology-related projects. Drawing on a participant observation study of IT/management consultancy practice, this paper seeks to explore the different ways in which consultants are seen as experts in the light of the pressures of the consultancy market place. The ongoing construction of consultancy expertise through the interaction of consultants and their clients with an array of elements, including technical knowledge, skilled practice, individual and collective experience, and commercial interests is discussed. It is suggested that, rather than being a relatively-enduring property of individuals, based on their mastery of a body abstract knowledge or their skills at managing the perceptions of their clients, the precarious and multi-faceted character of their expertise means that consultants are continuously engaged in its active construction through their situated practice.     

Agency workers and organisation's commitment to its workers

This study explores the understanding that Dutch agency workers (i.e. workers affiliated with a temporary-help service firm) have of organisation's commitment to its workers (OCW). Semi-structured interviews with 33 Dutch agency workers aimed to answer two questions: (1) what do agency workers believe the agency and the client should offer if they are aiming for perceived OCW and (2) who are the potential messengers of agency and client OCW? If agencies and clients want to get rewarded by agency workers with perceived OCW, they have to carry a shared responsibility for many aspects of fair and favourable human resource management. However, agency workers link some aspects exclusively to one of the two organisational parties: agency workers seem to associate promotion with the client organisation, and certain aspects of job characteristics (e.g. autonomy and performance feedback) solely with the client OCW. Other elements related to job characteristics were only associated with agency OCW (current and future person–task fit, job-satisfaction concerns and job-related problems), as well as keeping in touch and problem solving (e.g. job dissatisfaction) solely with agency OCW. Moreover, agency workers personify all the mentioned responsibilities: organisational member's actions concerning these responsibilities represent OCW. Agency consultants seem to be the sole representatives of perceived agency OCW, whereas several agents (e.g. top managers, direct supervisors, co-workers, clients' ‘clients’) serve as potential representatives of client organisations' commitment.     

The cultural embeddedness of professional service purchasing—A comparative study of German and Swedish companies

Research on professional service purchasing generally takes a culturally universalistic approach, implicitly assuming the generalizability of research findings and normative models to different cultural contexts. However, research in related disciplines points to the influence of national culture on managers’ decisions, thereby questioning the culturally universalistic approach. The purpose of this paper is to explore differences in professional service purchasing in different cultural contexts. Based on a survey of large organizations, we analyze how the purchasing process for a specific type of professional services – management consulting services – is organized in two cultural contexts (i.e. Germany and Sweden). The results indicate that organizations in Germany and Sweden differ in the way they approach key aspects of the purchasing process. These differences are discussed in relation to two central cultural dimensions – uncertainty avoidance and masculinity–femininity – in which Germany and Sweden take very different positions. It is proposed that uncertainty avoidance mainly influences the first steps in the purchasing process (specify, select and contract) whereas masculinity–femininity mainly influences the remaining steps (order, expedite and evaluate). The paper contributes to the purchasing and supply management literature by empirically illustrating differences in purchasing practices in different cultural contexts and developing theory-driven propositions for the influence of national culture on the professional service purchasing process.     

Exploring early purchasing involvement in discontinuous innovation: A dynamic capability perspective

This paper aims to address the gap concerning our knowledge about early purchasing's involvement (EPI) in new product development (NPD) projects in contexts characterized by discontinuous innovation. We adopt a dynamic capability perspective to explore how existing sourcing and supplier relationship management capabilities are adapted when purchasing agents become involved in discontinuous innovations projects. We use an embedded case-study approach to study four NPD projects in a heating, ventilation, and air conditioning (HVAC) company. The case studies are based on interviews with managers and staff from the research and development, purchasing, and marketing departments, as well as suppliers involved in the projects. Our empirical findings capture emerging purchasing practices including a “reversed” sourcing process, purchasing-marketing interaction, and the coordination of “a learning atmosphere” between the R&D department and suppliers through proactive innovation meetings and creativity workshops. We derive propositions to conduct further research into the role of the purchasing department in times of discontinuous innovation. We also provide a framework of sourcing and supplier-relationship practices that firms can use when embarking on discontinuous innovation.     

电信运营商采购管理研究

在对电信运营商采购管理现状进行分析的基础上,根据需求的不确定性和专业化程度,将采购产品和服务分为三类,并分析了不同类别产品和服务的采购管理的重点,采购部门、需求部门以及供应商发挥的作用以及彼此间的关系。最后从制度建设、信息平台建设以及人员培养三方面论述了采购管理的保障措施。     

高效的驻厂质量监造工作浅议

监造是一种中介咨询服务。监理行业性质—服务、脑力劳动为主,主要对产品实现过程的质量、进度、投资实施监督管理。本文主要从委托方、监造方各自的角度出发,重点讨论如何实现高效的驻厂质量监督制造,保证设备质量。     

Developing a quality improvement program in materiel management

Materiel management frequently considers itself a service organization but infrequently considers the service provided as contributing to quality patient care. Quality patient care can only be delivered if every department is delivering quality service. Materiel management's ultimate customer is the patient waiting for the supply that is to be delivered by central stores or the prosthetic device to be obtained through purchasing. Quality service is the key to success, and materiel management must be proactive and deliver quality services.     

Implementing organizational change in supply towards decentralization

This paper presents the findings from research in large companies investigating implementation issues faced by chief purchasing officers as their supply organization changed to greater decentralization. Once the decision was made to decentralize, responsibility for implementation was given to the chief purchasing officer (CPO). Firms changing their supply organization to a more decentralized structure faced a number of implementation issues, including the business unit concerns, role of the chief purchasing officer, top management involvement, changes to existing purchasing staff and the involvement of consultants. In the nine changes studied across seven companies, the decentralization process also required the CPO to address a number of simultaneous activities, including cost reduction objectives and implementation of information technology systems. A surprising “purchasing paradox” was also uncovered as top management still expected decentralized supply units to provide additional savings.     

Assessment and selection of management consultants: A comparative cognitive study between small- and large-scale companies

This paper explores alternative ways of evaluating and ultimately hiring a generalist consultancy for short- and medium-term projects, and how this is shaped by the size of the clients’ company. What buying factors do managers of small and large firms have in mind when hiring consultants for their projects?Instead of employing surveys incorporating predefined buying factors based on what the researchers think would be important, a cognitive mapping methodology - the repertory grid technique - is applied to investigate the underlying phenomena. Using the repertory grid technique to draw mental models is a novel research technique within the supply management field. Recent behavioral supply chain management research found the behavior of managers to be critically influenced by mental models: the lenses through which managers perceive, simplify and interpret the world.Results show differences between the buying factors used in small- and large-scale companies: managers of large companies are more ‘reputation and outcome-oriented’ and managers of small businesses are more concerned with ‘how the services are rendered’. However, both constituents stressed the importance of expertise, quality and the relationship between the client and the management consultancy, although the character of such a relationship differed between small- and large-scale firms. Results also point out criteria that managers of small and large companies employ to discriminate between good and poor performing consultancies and to judge service delivery. The practical implications for both companies hiring consultancies and the consultancy companies are discussed. For consultancies, our findings can help tailoring their efforts to a differing clientele when marketing and selling their services. For companies hiring consultancies, fixating too much on particular buying factors may lead to biased decisions.     

A control rule for recruitment planning in engineering consultancy

The most valuable asset of a professional service firm is its people. Owing to the high labor turnover, staffing decision is very critical in its operations. We take engineering consultancy as a professional service and emphasize the importance of developing knowledge stock of skilled consultants in a planned manner for efficient productivity management. Our focus is management of knowledge-mix, which is the mix of consultants at different productivity levels. Our model is designed to determine the steady-state number of consultant-mix to meet demand at a desired service level. This is done through the use of control theory and chance constrained programming.      

How different is professional service operations management?

This paper presents detailed analysis of the operational and operations management characteristics of a professional service firm, a legal partnership. An in-depth study of customer interactions, service customization, process throughput and variability, professional employee behavior and managerial interventions provided the basis for confirmatory and exploratory research. The results suggested a number of refinements to existing conceptualizations of the professional service type operation and indicated areas where professional service operations management should be viewed as highly distinctive. First, professional–client exchange is variably asymmetrical – with significant implications for service package and process design. Second, professional service operations comprise a substantial number of less variable and faster throughput processes – creating a significant opportunity for commoditization. Third, professional status and corresponding organisational structures (e.g. the partnership model) need to be explicitly recognised in any typology – these factors introduce distinctive trade-offs when seeking greater efficiency and effectiveness.     

How to achieve cost savings and strategic performance in purchasing simultaneously: A knowledge-based view

The competitive advantage purchasing provides has been debated for decades. For a novel perspective we derive a theoretical framework grounded in the knowledge-based view in order to examine how purchasing knowledge and purchasing integration impact cost and strategic performance. The derived hypotheses are tested based on extensive secondary data from a large European multinational utility company. The 179 studied ‘purchasing-internal client relationships’ contain real contracted savings data and internal client ratings of purchasing knowledge, purchasing integration and strategic purchasing performance. We show that purchasing knowledge is a major antecedent for both savings and strategic purchasing performance. This effect is further amplified by purchasing integration. With this study, we extend the understanding of the purchasing knowledge–performance link. We conclude that purchasing knowledge becomes particularly valuable when combined with other functions' processes through purchasing integration. This causal chain is also supported through general knowledge-based view theory. Moreover, we provide numerical evidence of the value of knowledge creation and integration processes to purchasing professionals in our managerial implications based on results obtained from actual purchasing savings data.