Management Consulting

Not much written work is available about the origins, development and impact of management consulting. The professional origin of management consulting emerging at the turn of the century took an accelerating pace after WW1. Suggestions made to merchant bankers from engineers, accountants, lawyers, etc., providing counsel later formed primary repertoire of management consultancy. And, importantly, legal separation of investment and commercial banking in 1933 escalated rapid growth of management consultancy firms.

Historians have traced the impact of Taylorism on contemporary diverse institutions. Trying to trace the history of management consulting it was assumed that undoubtedly the most influential factor in the growth of modern management consulting was about 'scientific management’ by Frederick Taylor. ... The concept combined the practice of engineering with the principles of economics, and it was out of this coupling that today's profession was born. But mostly early management consultants focused on bureaucratic organization.

The expanding corporate clientele needed to expand supported younger professional to build practices of management engineering and borrow skills from older members as they struggled to attract customers. Management engineers like other professionals struggling for status used multiple credentials to support their claims for specialized knowledge and to market a new service that was management. Bankers active in management advisory needed to evaluate worth, organization and prospect of companies for various projects such as valuation of initial public offering, reorganisation of bankrupt companies, or the administration of mergers. They acted both as internal advisor and as external regulator. Bankers coordinated engineers for valuation, organizational survey and accountants for audits and cost controls, and lawyers for re-organisations.

The number of professional management counsels grew after 1930 and was marked out to be important institution in the business world to improve overall strategy, structure and financial performances. The growth was not market led but mostly an institutional response to new government regulations. Governments’ regulation to enforce more open system also encouraged growth of management consulting that was needed for these new institutional arrangements. The complicated process of soliciting new clients and conducting an engineering management survey were systematized. “General survey outline” later dubbed as “banker’s survey” was a model to follow for young inexperience engineers to start with. Due to political changes merchandize banking were forced to abandon coordinating these studies and do internal management consulting activities. The origins of modern management consulting are in the 1930s. since that year management consultants have reorganized the largest and most important organizations in the world.

Christopher D. McKenna, The Origins of Modern Management Consulting,
Said Business School, Oxford University
www.sbs.ox.ac.uk

Money and Bank Credit

One of the most obscure and complex spheres of economics: the theory of money, bank credit, and economic cycles. Now that the issue of socialism has been resolved,2 at least from a theoretical standpoint, and it has been empirically illustrated to be impracticable, the main theoretical challenge facing economists at the dawn of the twenty-first century lies most likely in the field of money, credit, and financial institutions. The highly abstract nature of social relationships involving money in its various forms makes these relationships remarkably difficult to understand and the corresponding theoretical treatment of them particularly complex. A series of institutions has been developed and imposed; namely central banks, bank legislation, a monopoly on the issue of currency, and foreign exchange control. These institutions thoroughly regulate every country’s financial sector, rendering it much more similar to the socialist system of central planning than is appropriate to a true market economy. Hence, the arguments which establish the impracticability of socialist economic calculation are fully applicable to the financial sphere.
A research plan to determine which financial and banking system is appropriate for a free society.

De Soto, MONEY, BANK CREDIT, AND ECONOMIC CYCLES
http://www.mises.org/books/desoto.pdf