What is the Difference Between Management Consulting and Strategy Consulting?

By on April 13, 2017
management consulting

While the founder of the company was sitting on his yacht, drinking Hennessy with the breeze of spring wind in his hair, whispering lightly into his ear “the summer is on its way”, the CEO and managers were busting their heads to keep the company moving.

Now, sometimes you might wonder, what is management? From all the varying definitions let’s go with this one. Management is the process of dealing with or controlling things or people. It has four basic functions: planning,organizing, influencing and controlling. So essentially, we can say, that through management companies reach organizational goals. Of course with the help of other people and other organizational resources.

Moving on, let’s understand what management consulting is and compare it with strategy consulting. Imagine a big balloon, the kind that has a lot of other small balloons inside. The kind that they have on children’s birthdays. And when they pop up the big balloon, all the small ones fall and children step on them by making loud noises. Management consulting is like that big balloon, and has lots of small balloons inside. Those small ones are Operations Consulting, IT Consulting, HR Consulting, Strategy Consulting, etc. So we can say that Strategy Consulting is a subset of Management Consulting. And it is a niche subset: answers questions that are considered very important in the business activities of the company.

Strategy consulting helps clients to plan growth strategy, future roadmap, identify problems in the organization. It helps change the organizational structure if needed: for example from hierarchical to flat. Strategy consulting also can help rationalize products and services, acquisitions and removals. 

To better understand the whole picture, lets go deeper into the topic. Imagine that in the day-to-day activities of the company there are questions raised by all the departments. For example, from the Operations Consulting a question like “How do I better manage operations in my company” might rise.  From the IT consulting a question like “What role should IT play in my business operations” might rise. And, “How to optimize HR functions to better evaluate benefits and talents” question might rise in the HR Consulting.

Remember, that Management consulting concerns to answering questions raised by someone who manages the whole or a part of the business. So all the above-mentioned questions are in the end a worry and a part of Management Consulting. It’s important to note, that management consultants work with businesses, and they also work with NGOs and governments.

And what about Strategy Consulting? This department usually answers questions, which are raised by Corporate Executives (CXO) and Board members. For example, if there is a drop in the profits of the company or if there is a new competitor in the market, Strategy Consulting is the one that gives answers and solves the problems.

So, to conclude, we can say, that different departments answer different sets of questions that concern the business activities. To take it as a whole, Management Consulting is the head of all the other small balloons inside it. And Strategy Consulting is one of the small balloons, but a very important one. And it answers questions that CXOs and Board members need support with.

 

About Kristina Poghosyan

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