Science Fair Project Encyclopedia
McKinsey & Company
McKinsey & Company is a privately owned management consulting firm that focuses on solving issues of concern to senior management in large corporations and organizations.
Known both internally and externally as simply "The Firm" , McKinsey was founded in Chicago during 1926 by James O. McKinsey. McKinsey was a professor at the University of Chicago pioneered budgeting as a management tool. He left the firm that bore his name to become CEO of Marshall Field but died in 1937.
While he always gave James McKinsey much of the credit for the success of the consulting firm, Marvin Bower is widely credited for shaping the essential character of the Firm.
Inspired by his experience at the law firm of Jones Day, Bower believed that management consulting was a profession that should subscribe to the highest standards. His leadership emphasized the adherence to the Firm's mission of serving clients while building a world-class institution, and guiding principles of professionalism over any other consideration. Among McKinsey firm members and alumni, there is a considerable oral history that illustrates the supremacy of these values.
In keeping with the principle that the Firm is a partnership of professionals, McKinsey's growth to date has been based less on an explicit growth strategy than on meeting apparent client needs. Offices have largely been founded by partners that had developed close relationships with executives in major cities. It now maintains offices on all continents and most major cities; in the last few years, the majority of its work is derived from non-U.S. clients.
While maintaining its commitment to its core values, the Firm has evolved through several eras in management. While the Firm does not discuss internal management issues, McKinsey has gone through several difficult transitions and emerged with its strength intact.
McKinsey is formally organized as a corporation, but functions as a partnership in all important respects. Its managing director is elected for a limited term of four years by the Firm's senior shareholders, titled directors. Each managing director can only serve for three years. Several committees develop policies and make critical decisions. Geographically based offices act as the main business unit, but the Firm maintains cross-geographical practices around industry sectors and management areas. Associates are invited to join the partnership through an evaluation and election process, and shareholders that reach a certain age are obliged to sell back their shares according to a set formula.
McKinsey consultants are also subjected to the practice of "up or out," in which they must advance in their consulting careers within a time frame, or else asked to leave the Firm.
Today McKinsey has around 6,000 consultants in 82 offices across 44 countries. They help solve strategic, organizational, operational and technological problems, for some of the world's largest organizations. Clients include three of the world's five largest companies, two-thirds of the Fortune 1000, governments and other non-profit institutions. McKinsey also performs pro bono engagements for a number of charitable organizations and government agencies worldwide.
Marvin Bower broke with industry practice in his time by focusing hiring efforts on recent graduates from the best business schools, rather than among experienced managers. The premise for this was that analytical rigor and fresh insights were of greater value to clients than conventional wisdom. McKinsey has known to make rare exceptions to this policy by hiring senior staff from industry (John Sawhill being a noted example), and in later years it has diversified its recruting base by soliciting candidates from graduate programs within law, medicine, engineering, science, and liberal arts.
McKinsey is one of the most sought after destinations for graduates of top MBA programs, having been rated #1 in the Universum survey of most desirable employers for the past six years. They are the largest single recruiter at the top US business schools, including Harvard Business School, the MIT Sloan School of Management, the Wharton School, the Stanford Graduate School of Business, the University of Chicago Graduate School of Business and the Kellogg School of Management. They are also the largest recruiter at Harvard Law School and employ more Rhodes Scholars than any organization outside of the White House.
McKinsey also recruits very selectively among undergraduates, hiring as "Business Analysts" recent graduates from top universities to work as consultants alongside its associates for no more than two years. The BA program is one of the most competitive in industry and is coveted by many business-oriented undergraduates. Most business analysts attend graduate schools of business after their tenure at McKinsey and join the firm afterwards.
In spite of the fact that many former McKinsey consultants are asked to resign from the firm, McKinsey maintains and sponsors an active alumni network. By some accounts, more than 80 Fortune 500 CEOs are former McKinsey consultants. Current and former McKinsey consultants include Lou Gerstner, Tom Peters, and Chelsea Clinton.
McKinsey's perspective on the management consulting industry is that it is characterized less by competitive strategies than by commitment to client service.
Publishing and public relations
A print and online publication, The McKinsey Quarterly, (published six times a year) offers journal-length articles on strategy, organization, marketing and other topics of interest to senior executives.
Criticism against McKinsey has generally been formuated in the context of criticism against the practice of management consulting as a whole. The Firm itself will not discuss specific client situations and maintains a carefully crafted and low-profile external image. Client confidentiality is maintained even among alumni of the Firm, and as a result, journalists and writers have had difficulty developing fully informed accounts of mistakes McKinsey consultants may have made.
Much of the distrust toward management consultants in general and McKinsey in particular can be categorized as:
- Wrong or unimaginative analysis, such as the alleged recommendation in 1983 to AT&T that cellular phones would be a niche market
- Hubris or arrogance toward executives, in particular underestimating the difficulty of implementing recommendations
- Lack of coordination among multiple engagement teams working with one client
Among other books and articles, "The Witch Doctors," written by editors of The Economist presents a series of blunders and disasters alleged to have been McKinsey's consultants' fault.
Although former McKinsey consultants overwhelmingly speak and think of their experience at McKinsey in favorable terms, many worry about the firm's capacity to maintain quality and sustain growth. The election of Ian Davis as the new managing director appears to signal a renewed commitment to McKinsey's traditional values.
- Yahoo! - McKinsey & Company Company Profile
- Yellowikis have a list of Management consultants contact details.
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