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Purchasing and using Management Consultants

Management Consultants are an increasingly common source of competence and resources in contemporary organization in both the private and public sector. However, their use is also debated based on a questionable value for money and potentially negative effects of becoming reliant on external expertise. The current project is concerned with organizations’ purchasing and use of management consulting services.

Background and research questions:

Research provides limited insights into the practices and challenges involved in purchasing and using management consulting services in contemporary organizations. Research questions pursued in the project include:

  • How do organizations purchase management consulting services and what are the consequences of these practices?
  • What determines the demand for management consulting services?
  • How do organizations follow-up on their purchase and use of management consulting services?

Research approach:

In addressing the above questions, a number of different methodologies and data sources have been applied ranging from interview-based case studies to secondary data on consultant use on both organizational and national level.

Key findings:

  • In evaluating service quality ex ante, buyers rely on a number of different cues resource quality, delivery quality and relational quality. Read more here.
  • Buyers in the public sector increasingly learn how to navigate the institutional complexity arising from competing needs for on the one hand hiring management consultants they trust and on the other hand not letting subjective criteria determine the choice of supplier.
  • The use of management consulting services in public sector organizations is driven by CEO tenure. CEOs increase their use of consultants to peak in their 3rd year of tenure. The relationship between tenure and use of consultants in moderated by CEOs previous experience and managerial discretion. Read more here.
  • The professional identity of the buyers determines to what extent they see management consultants’ expertise as valuable – and thus whether they see hiring management consultants is a reasonable choice. 
  • National culture influences the use of management consulting services. Organizations in high uncertainty avoidance and individualistic cultures use professional services less than organizations in low uncertainty avoidance and collectivist cultures. Read more here.

Further information:

The project has been funded partly by Forte and partly by Ragnar Söderbergs Stiftelse.

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