On Fri, 1 Dec 1995, Gordon Housworth wrote:
> It is a sad state of events but consultants must be seen, and see
> themselves, as manufacturers (of ideas) just as any conventional
> industrial plant. They must build a "new model" periodically to tantalize
> the buyer and to distinguish themselves from their competitors -- and that
> new model is generally the book(s) produced by the senior rainmakers which
> then sells the consultancy services of their organization.
> Couple this tendency to the unwillingness of most buyers (firms) to
> confront the truly systemic issues plaguing their organizations long
> enough and with enough commitment to solve them, and one has a ready buyer
> for the "ism" of the day. ("Oh dear, that medicine was frightfully
> distasteful [and I didn't take it long enough to see any improvement
> anyway] so perhaps this one will taste better.") And the problem is that
> when any organization has been washed over by successive managerial
> "isms," the only "isn" that sticks is cynicism.
I keep wondering is the above phenomenon stated by Gordan universal or
simply a result of Anglo-American exceptioanlism.
As a former business school assistant professor in China and now a Ph.D.
student in the field of technology policy and competitiveness at George
Mason University, I was shocked by the pervasiveness of consulting
services in the U.S. and the difficulty in selling consulting service in
China. Although lack of hard data, from my reading of the literature about
Japan, Taiwan, and South Korea, it seems to me that the degree of business
reliance on consulting servicess in these countries is much smaller than
business in America.
If the above statement is true, my proposition is, the heavy reliance of
U.S. companies on consulting services may help American competitiveness in
sectors where crucial knowledge and expertise can be "encapsulated",
"modularized", "generalized" and therefore transacted through consulting
services. These sectors may inclode software development, banking,
insurance, retailers, etc. However, it amy hurt U.S. companies in sectors
where firm-specific knowledge the fusion of various types of knowledge is
the key for success. These sectors may include automobile, and home
electronics.
The underlying rationale is: in order for the selling of knowledge and
expertise to be possible, knowledge and expertise should be
"encapsulated", "modularized," and "generalized" in a sellable form (the
field book of The Fifth Discipline, the application of C++, etc.). In some
sectors most crucial knowledge can be "incapsulated" and "generalized",
while in some other sectors lots of crucial knowledge, are firm-sepecific
and can not be effectively "incapsulated", "modularized", and
"generalized". Therefore, the reliance on consulting services may produce
different results in different sectors. It seems to me that the
development of information system belongs the first catagory, while the
"technology fusion" as described by Fomio Kodama belongs to the second
catagory.
When it comes to the organizational change regarding to human resource
management and organizational learning, it seems to me that American firms
are heavily reliant on external agents, such as consultants to enable and
design organizational change, while in Japan, organizational change is
more endogenous.
It seems to me that the American heavy reliance on consulting services is
in part due to the high turnover rate and low exit cost in
employment-relationship in the U.S. The high turnover rate forces
knowledge workers in the US develop their knowledge and expertise in a
sellable way (US: I am a software engineer; Japan: I am a Toyata member).
The low exit cost deprives the incentives of the US company to conduct
in-house on-the-job training, while increasing the incentive for employees
to quit their job to provide their independent consulting service when
they come across some knowledge and expertise that are highly sellable.
My knowledge in the areas of consulting services is very limited.
Therefore The reason I boldly present my premitive propositions here to so
many experts in the organizational learning discussion group is trying to
solicit more thoughtful discussions on the the issue. I will be very
grateful to any comments on the issue.
-- Dengjian Jin Ph.D. Candidate, Research Fellow The Institute of Public Policy George Mason University Fairfax, VA 22030 (703) 993-1560 email: djin1@osf1.gmu.edu