*Amity Business SchoolClass of 2011, Semester IVManagement in Action Social, Economic & Ethical IssuesDr. Sanjay Srivastava

AimThe course aims at bringing the students closer to reality by developing their understanding of the professional prerequisites to practice of management in terms of required skills and attitude to respond proactively to rapid discontinuous change in business environment. Integrative in approach, this course aims at developing not theoreticians but practitioners who are expected to sense the ongoing conflict between environmental change and internal desire of management for stability.

ObjectiveAt the end of this course the students will understand:Various Issues Involved in practicing management particularly in the Indian contextPossible approaches to Ethical, Economic and socially acceptable Decision-making problem solving through examination of alternative paths.

Module I: IntroductionModern Management Practices and Issues Involved, Outsourcing Management Services and Evolution of Management Consultancy, Skills-set Required for Management Consultants. Consulting and performance counseling.

Module II : The Process of Management Consulting Consulting Proposals. Identification and Definition of Problem, Fact-Finding Leading to Solution Development and Implementation, Developing Strategic and Tactical Plans and Subcontracting, Pricing of Consultancy, Acquiring and Developing Talents for Consulting.

Module III: In-house Management versus Management Outsourced Why a Sense of Skepticism and Unease Towards Management Consultants. Cost versus Value of Advice, Separating Consulting Success from Consulting disaster. Some Revealing Situations.

Module IV:Cross Cultural Management Systems and Processes Types of organizational culture, Strength of organizational culture, Function of organizational culture, Importance of culture to the organization, Cultural Models, Cross- Cultural Perspectives, Geert Hofstede and Cross- Cultural Issues

Module V: Economic and Social Issues in Management Adaptation to Changing Environment in General and Economic Environment in Particular, Economic Growth and Change Areas, Emerging Opportunities in Various Sectors including Social Sector, Management Practice and Cultural Issues, The global Political Situation, The Global Competitive Environment and the internal scene in India, War Game.

Module VI: Ethical Issues in ManagementRelationship among Various Stakeholders, Reasons for Conflict of Interests Among Stakeholders, Corporate Governance and Ethics. Why Unethical Decisions Leading to Conflicts are Taken, Power and Politics, Initiatives on Corporate Governance by the Governments.

The GenesisRoots are in Management ConsultancyEmergence from two concept based issues:1.Total Quality Management & Business Ethics and Corporate Governance2.Theoretical frameworks were drawn from Strategy, Finance & HR

Management Consultancy"The services provided by an independent and qualified person or persons in identifying and investigating problems concerned with policy, organization, procedures and methods, recommending appropriate action and assistance in implementation".

Management ConsultantsKnown as Evolutionary rather than Revolutionary.Application must be Collaborative and Authoritarian.Doctors of Management.

Management Practices & OutsourcingWhat is Outsourcing?What is being Outsourced?Core Expertise need to be retained, nurtured and stretched.

Why to hire Management ConsultantsClient require the skills of the Management Consultants for two purposes:Identification of the Problem.Problem Identification(s), Achieving the objectives and effective performance.

Why to hire Management ConsultantsNeed for fresh ideas from Entrepreneurial Perspective.Need for improved performance from the perspective of Operations, Distribution and Logistics, functional areas of Marketing, Finance, HR and IT.Need for Efficiency and Effectiveness.Need to evaluate performance.Need to train employees.Need for total turnaround.

Clients Expectation(S)Independent Viewpoint

Special Qualifications

Realistic Gains not just moving the wheels.

Attributes of Successful ConsultantsPowerful NegotiatorEffective CommunicatorReservoir of Self ControlUnderstanding of Individual PsychologyUnderstanding of Group PsychologyUnderstanding of Organizational PsychologyComplete mastery of the given area.

Barriers common to ConsultantsKnow it all attitudeInability to understand technical languageInadequate background or knowledgePoor organization of ideasDifferences in perceptionPrejudice or biasPersonality conflictsTendency not to listenResistance to change

Barriers common to Consultants10. Lack of credibility11. Inability to understand Non-Verbal Communication12. Hostile attitude13. Lack of feedback14. Differences in status or position15. Information Overload16. Too many Gatekeepers17. Overly Competitive Attitude

As long as we have hope, we have direction, the energy to move and the map to move by, we have a hundred alternatives, a thousand paths, and an infinity of dreams."

Organizational AppraisalOrganizational Capability FactorsFinancial Capability FactorsMarketing Capability FactorsOperations Capability FactorsHuman Capability FactorsInformation Management Capability FactorsGeneral Management Capability Factors

Theres no business like consulting business

They [Management Consultants] are people who borrow your watch to tell you what time it is and then walk off with it.-R. Townsend, Up the Organization

WHY CLIENTS HIRE CONSULTANTS?To learn To save moneyTo avoid lossesTo solve problemsTo improve safetyTo improve imageTo improve efficiencyTo hire new employeesTo improve performanceTo increase sales and profits

To help through busy periodsTo introduce, facilitate and sustain changeTo open up new markets and opportunitiesTo comply with laws, standards and regulationsTo put new systems, methods and practices into useTo confirm their ideas, concepts, plans and strategies To facilitate transitions, mergers, takeovers and downsizing

The Advantages of Using Consultants

Getting a second opinionMore flexibility in hiringFresh perspective and viewsExpertise that is lacking in the organizationOpportunity to learn and train employeesWork is performed faster and is of better quality

The Disadvantages of Using Consultants

It is expensiveDesired results are not guaranteedIt may create bad vibes amongst employeesProjects and issues may blow up out of all proportions

How do Consultants charge for their services?

Per Hour or Per Day basisRetainer basis Fixed-price assignmentsPerformance-based fee (Contingency Fee)

Contingency feesA client complained that he couldnt afford a consultants hourly fee. Instead of doing the job on a time and material basis, Im willing to do it for a contingency fee, responded the consultant.What is contingency fee? asked the client.Its very simple. If I dont deliver what I promised, Ill be left with no money at all, explained the consultantWhat if you do deliver what you promised? persisted the client.Then youll be left with no money at all, said the consultant.

How consultants market their services?

Membership of community organizations and professional institutions Publishing books and articlesNetworking with other consultantsSpeaking at seminars, conferences and other gatherings attended by both clients and consultantsWord of mouth advertising recommendations from satisfied clients

Paradigm Shift in Consulting AccountabilityActivityBased ConsultingNo business need for the consulting interventionNo assessment of performance issuesNo specific, measurable objectives for implementation and business impactNo effort to prepare stakeholders/participants to achieve resultsNo effort to prepare the work environment to support implementation

Result-Based ConsultingIntervention linked to specific business needsAssessment of performance effectivenessSpecific objectives for implementation and business impactResults/expectations communicated to stakeholders/participantsEnvironment prepared to support implementation

ActivityBased Consulting

No efforts to build partnerships with key managersNo measurement of results or cost benefit analysisPlanning and reporting on consulting intervention is focused on inputResult-Based Consulting

Partnerships established with key managers and clientsMeasurement of results and cost-benefit analysis

Planning and reporting on consulting interventions are focused on output

Methods of Data CollectionFollow-up surveys measure satisfaction from stakeholders.

Follow-up questionnaires measure reaction and uncover specific application issues with consulting interventions.

On-the-Job observation captures actual application and use.Tests and assessment are used to measure the extent of learning (knowledge gained or skills enhanced).

Interviews measure reaction and determine the extent to which the consulting intervention has been implemented.

Focus groups determine the degree of application of the consulting solution in job situations.

Action plans show progress with implementation of the job and the impact obtained.

Performance contracts detail specific outcomes expected or obtained from the consulting intervention.

Business Performance monitoring shows improvement in various performance records and operational data.

Methods for Isolating the Effects of ConsultingA Pilot group with consulting is compared to a control group without consulting to isolate consulting intervention impact.Trend lines are used to project the values of specific output variables, and projection are compared to the actual data after a consulting intervention.A forecasting is used to isolate the effects of a consulting intervention when mathematical relationships between input and output variables are known.Participants/stakeholders estimate the amount of improvement related to a consulting intervention.

Supervisors and manages estimate the impact of a consulting intervention on the output measures.External studies provide input on the impact of a consulting intervention.Independent experts provide estimates of the impact of a consulting intervention on the performance variable.When feasible, other influencing factors are identified and the impact is estimated or calculated, leaving the remaining unexplained improvement attributable to the consulting intervention.Customers provide input on the extent to which the consulting intervention has influenced their decision to use a product or service.

Reaction to and satisfaction with the consulting intervention from a variety of different stakeholders within different time frames.The extent of learning that has taken place as those involved in the consulting intervention learn new skills, processes, procedures, and tasks.The success of the actual application and implementation of the consulting intervention as the process is utilized in the work environment.The Score Card Perspective : Six Balanced Measures

4. The actual business impact changes in the work unit where the consulting project has been initiated. These values include hard data as well as soft data.5. The actual return on investment reported as a ratio or in a percentage format. The measure shows the monetary return on the cost of the project.6. Intangible measures, which are usually soft data items that are not converted to monetary values for use in the ROI formula.

Methods for Converting Data to MoneyOutput data are converted to profit contribution or cost savings and reported as a standard value.

The cost of a quality measure, such as a reject, is calculated and reported as a standard value.

Employee time saved is converted to wages and benefits.

Historical costs of preventing a measure, such as customer complaint, are used when they are available.

Internal and External experts estimate a value of a measure.

External database contain an approximate value or cost of a data item.

Participants estimate the cost or value of the data item.

Supervisors or managers provide estimates of costs or value when they are both willing and capable of assigning values.

The consulting of staff estimates a value of a data item.

The measure is linked to other measures for which the costs are easily developed.

Recommended Consulting CostsThe Cost of initial analysis and assessment, possibly prorated over the expected life of the intervention.The cost of developing solutions.The cost of acquiring solutions.The cost of application and implementation of the intervention.The cost of maintenance and monitoringThe cost of evaluation and reportingThe costs of administration and overhead for the consulting intervention, allocated in some convenient way

Consulting BenefitsBCR = _______________ Consulting CostsSometimes the ratio is stated as a cost-benefit ratio, although the formula is the same as BCR. The return on investment uses the net benefits divided by consulting costs. The net benefits are the consulting benefits minus the costs. In formula form, the ROI becomes.

Net Consulting benefitsROI%=_________________X 100Consulting CostsThis is the same basic formula used in evaluating other investments where the ROI is traditionally reported as earnings divided by investment.

The BCR and the ROI present the same general information, but from slightly different perspectives. An example will illustrate the use of these formulas: a consulting intervention produces benefits of Rs. 581,000 at a cost of Rs. 229,000. Therefore, the benefit-cost ratio is:Rs. 581,000BCR =__________= 2.54 (2.5:1)Rs. 229,000

As this calculation shows, for every Rs.1 invested, Rs.2.50 in benefits are returned. In this example, net benefits are Rs.581,000 - Rs.229,000 = Rs. 352,000. Thus, The ROI is:Rs.352,000ROI% = _________X100 = 154%Rs.229,000

*Amity Business School*