SUMMARY READINGS
Strategy Consulting
Amsterdam Business School | University of Amsterdam
May 2020
Table of contents
WEEK 1. Defining management consultancy and the industry
Suddaby & Greenwood (2001) …………………………………………………………………. 2
Baaij (2014), Chapter 1 …………………………………………………………………. 5
Baaij (2014), Chapter 2 …………………………………………………………………. 7
Baaij (2014), Chapter 5 …………………………………………………………………. 10
WEEK 2. Managing the consulting firm
Anand et al. (2007) …………………………………………………………………. 13
Maister (1982) …………………………………………………………………. 15
Baaij (2014), Chapter 7 …………………………………………………………………. 18
Baaij (2014), Chapter 8 …………………………………………………………………. 21
WEEK 3. Structured problem diagnosis
Collis & Rukstad (2008) …………………………………………………………………. 24
Gunn & Williams (2007) …………………………………………………………………. 24
Baaij (2014), Chapter 10 …………………………………………………………………. 26
Baaij (2014), Chapter 12 …………………………………………………………………. 30
WEEK 4. Structured solution development and communication
Weeks (2005) …………………………………………………………………. 36
Williams (1997) …………………………………………………………………. 36
Baaij (2014), Chapter 13 …………………………………………………………………. 37
Baaij (2014), Chapter 14 …………………………………………………………………. 41
WEEK 5. Strategy Analysis Toolbox I
Gottredson et al. (2008) …………………………………………………………………. 44
Grant (1991) …………………………………………………………………. 47
Porter (2008) …………………………………………………………………. 50
Ulrich & Smallwood (2004) …………………………………………………………………. 53
WEEK 6. Strategy Analysis Toolbox II
Schoemaker (1995) …………………………………………………………………. 56
Kaplan & Norton (2008) …………………………………………………………………. 59
Higgins (2005) …………………………………………………………………. 63
Baaij (2014), Chapter 15 …………………………………………………………………. 65
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, WEEK 1 | Defining management consultancy and the industry
Suddaby & Greenwood (2001) | Colonizing Knowledge: Commodification as a Dynamic of
Jurisdictional Expansion in Professional Service Firms
Field analysis of the process by which management knowledge is produced, in which the dynamics of
commodification (tendency to reduce knowledge to a routinised and codified product and colonization
(the struggle to expand the scale and scope of their managerial knowledge products, involving the
legitimation of specific social actors as the appropriate sources of management knowledge and the de-
legitimation of others) are important components. Colonization results from commodification and has
produced intense conflict and change in the field of management knowledge production.
1. Introduction
The importance of knowledge in organizations and mainly professional service firms (PFs) has gained more
attention. The production and consumption of management knowledge involves complex interactions
between sets or communities of organizational actors. The primary unit of analysis in this article is the
organizational field: communities of organizations that, in the aggregate, constitute a recognised area of
institutional life: key suppliers, resource and product consumers, regulatory agencies and other
organisations that produce similar services or products.
Observation: the cycle of commodification is intensifying and increasingly becoming internalised within the
confines of large, conglomerate PSFs such as the Big Five accounting firms.
2. The organizational field of management knowledge production
The organizational field of management knowledge production consists of distinct organizational groups.
They might overlap and form a partial social system of mutual dependence that collectively provides an
array of resources essential to the production of manamgent knowledge:
- Business schools:
- due diligence: provide a quality control function for managerial knowledge currently in use, where
managerial knowledge is evaluated and refined.
- research-led innovation: the process of trying to understand existing knowledge leads to new insights,
which form the basis for new managerial trends.
- cognitive foundation: by educating and accrediting an ongoing stream of management students.
- Gurus:
- translating managerial knowledge between communities in the field and thus make ideas accessible.
- legitimation: involves gaining normative acceptance, for example by translating specific managerial
practices into the popular business press etc. Their individual reputation sets gurus apart from pure
consultants or academics.
- Consultants:
- convert managerial knowledge into useable and saleable form, contributing to the process of
commodification. Three things that have to be done with management knowledge from academic
theory, industry or consumer experience:
- (1) codification: converting individual experience into something that can be stored, moved and
reused, in order to benefit other consultants (for example storing info in computer database).
- (2) abstraction: converting codified information into a more portable and universal form (for
example using routinized checklists/templates/icons to make information easily understood and
implemented).
- (3) translation: reapplication of codified and abstracted knowledge into a variety of different
organizational contexts.
- Conglomerate professional service firms (the Big Five)
- rapid growth and diversification of function distinguishes them
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, - internalize many of the functions of the field of management knowledge production inside individual
organizations
- Consumers
- strong and growing demand amongst consumers for knowledge management, but also scepticism
about validity and quality of the offerings.
- consumption occurs regardless of improvements because actors in the field provide a collective
legitimating discourse that makes consumption normatively acceptable as well as rational and
mandatory.
3. The cycle of management knowledge
production and consumption
All the groups named above play a critical
role in the ongoing production and
consumption of management knowledge.
Individuals can move freely from one
group to another. Management knowledge
has a lifecycle (cycle of knowledge
production and consumption, Figure 1):
as new managerial practices emerge from
the field, they are refined but the
academic community, abstracted and
legitimated by gurus and commodified by
consultants. Competition intensifies
because commodification has made the
knowledge product imitable demand form
new management knowledge products is
stimulated.
The stages:
- Legitimation phase: the actors of converting new ideas or managerial practices into language that can
be understood by a wider audience (by Gurus).
- Commodification phase: management knowledge is converted into a product by codifying, abstracting
and translating managerial practices. Mainly takes place within consultancy firms and aims to routines
management knowledge to sell it with minor modification to a variety of corporate consumers.
- Colonization phase: the extension of commodified managerial knowledge products into professional
jurisdictions (mainly by the Big Five PSFs, who find economies of scope in transferring knowledge to
different jurisdictions). This intensifies the cycle of management knowledge production for two reasons:
- (1) tends to increase competition among consulting firms because of imitability
- (2) generates conflicts
- Due Diligence and innovation phase: the analysis and refinement of existing products, which primarily
occurs at business schools, but can also happen in another community. Claims of one party are
confirmed by another party, leading to popularisation, legitimisation and commodification.
The need for new knowledge serves as engine for change and the cycle starts over.
4. Implications of commodification
Useful insights of applying the notion of commodification to the field of management knowledge:
- 1. Explanation for the increased decoupling of technical and aesthetic value of management consulting
products: over time, the commodified product’s technical use becomes detached from its value as social
object (separated from the maker). Moreover, management knowledge is not just valued for its
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, contribution in achieving organizational efficiency, but also for its ability to enhance careers, give status
etc.
- 2. Understanding why knowledge is increasingly treated as a property in contemporary discourse. A
tendency of individuals engaged in the process of commodification is to treat their social relations as if
they were natural things, resulting in detachment of services from their producers and objectification.
- 3. Transparency of knowledge increases by the process of converting experience and expertise in routine
templates. Commodification increases competition and therefore produces a growing need for new ideas
that can be commodified and sold.
5. Intensification of the cycle
Commodification leads to hyper-competition. The quickening pace of commodification has disturbed the
cycle of management knowledge production in two ways: the pressure for new knowledge products has led
to…
- 1. Jurisdictional migration (the colonization of knowledge)
- 2. Internalization of roles previously provided by discrete actors (the Big Five do not only commodify
managerial knowledge but also the knowledge creation process), raising the problem of legitimacy.
6. Colonization of knowledge
The ongoing need for new managerial knowledge generates a field-wide migration of certain actors who
seek new intellectual space. Mass customization of services is using well-defined knowledge products
from the basis of a product platform with minor modifications in new markets. Exploiting new markets most
often requires an aggressive migration into adjacent professional jurisdictions, most apparent with large
diversified consulting firms such as Big Five PSFs. With their knowledge colonization strategy, they
transformed themselves from accounting firms to consultancy firms to multidisciplinary business service
providers.
This is how it went: when audit work became commodified, the Big Six turned to management consulting
as this offerend higher profits and less risk. The Big Five dominated the global market for consulting
services, together earning over 50% of the total consulting revenue, championing the concept of
multidisciplinary practices (MDPs). Intellectual spaces identified for colonisation include the legal
profession, advertising, public relations, lobbying and investment banking.
Their broader strategy of dominating the field of management knowledge production can only be
accomplished by fully internalising the management knowledge production cycle within the confines of a
single organisation. However, no singly group has the power nor resources to solely determine the success
or failure of a given managerial knowledge product. So, to acquire the ability to legitimate knowledge to
consumers at the societal level, the Big Five have turned their colonialist efforts to universities.
7. Internalizing the management knowledge industry
The Big Five have been particularly aggressive in their efforts to re-create inside themselves, employing
different strategies. Two prominent ones:
- 1. Establishment of knowledge centres: mainly consisting of large databases of experts: consultants
with specific industry experience, accessible for other professionals within the firm.
- 2. Creation of linked relationships with prominent business schools: knowledge centres increasingly
draw upon expertise of prominent academics, for example by co-production of management books in
order to raise a firm’s legitimacy. Two aspects of internalisation of stages:
- (1) It does not necessarily reduces transaction costs: think about all the costs of establishing
knowledge centres etc.
- (2) It makes universities the targets of colonization efforts and threatens the due diligence role of
universities.
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