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American Consulting Inc history
American Consulting Inc company history timeline
The first management consulting firm was created in 1886 by Arthur Dehon Little, and initially specialized in technical research.
The very first management consulting firm was Arthur D. Little, founded all the way back in 1886 by a professor at MIT whose name was (funnily enough) Arthur D. Little.
After four years he started working in manufacturing at Midvale Steel and later moved to Manufacturing Investment Company of Philadelphia where he would hone his methods before becoming an independent consultant in 1893.
Morris Cooke, who launched his own firm in 1905
Taylor’s ideas not only influenced his peers, but ended up shaping the curriculum of the first class of Harvard Business School in 1908.
In “Principles of Scientific Management,” written in 1913, Frederick Taylor argues to fellow engineers that management needs to be thought of as “a true science, resting upon clearly defined laws, rules, and principles.”
The first management consultancy to serve both industry and government clients was Booz Allen Hamilton, founded in 1914, while the first modern, pure management and strategy consulting company was McKinsey & Company.
By 1920, when only a third of homes in the country had electricity and only one in five had a flush toilet, the country’s business establishment was embarking on a course of radical, unprecedented expansion.
Budgetary Control (1922)—the first definitive work on budgeting—turned accounting on its head, promoting it as an essential tool of managerial decision making. “Budgetary control involves the following,” McKinsey wrote. “1.
Two subsequent books fleshed out McKinsey’s ideas: 1924’s Managerial Accounting and Business Administration.
1926): 19.Google Scholar Numerous articles in the journal of the National Association of Cost Accountants in the United States show indeed how many companies used the system not only to reduce unit labor costs, but also for cost accounting purposes.
1928, were found in the Lucas Archives, Industrial Relations, Bedaux, Folder A/292, British Motor Industry Heritage Trust, Gaydon.
By 1930, McKinsey’s professional staff totaled fifteen.
22 NICB, Systems of Wage Payment (New York, 1930).Google Scholar While not statistically representative, this survey covered 1,214 plants, employing a total of almost 800,000 workers.
In 1931 he drafted the General Survey Outline, and the next year he opened a New York outpost in the offices of a defunct investment house at 52 Wall Street—six offices with a reception area.
In 1934, the Chicago office moved to the forty-first floor of the new Field Building on 135 South LaSalle.
E. Bedaux Companies; and International Bedaux Company Inc., Representative List of Clients of all Bedaux Companies (New York, 1934)Google Scholar, New York Public Library, in folder “Material on the Bedaux Principle.”
The shift towards advising firms at a broader level would lead McKinsey himself to leave the firm in 1935 to help support a turnaround at Marshall Field as CEO & Chairman.
Bedaux was allowed to re-establish it in 1937, albeit under a different name.
42 According to E. N. B. Mitton who had joined AIC in 1937; interview on 23 Apr.
38 Arbeitswissenschaftliches Institut der DAF, Das Bedaux-System (Berlin, [1938])Google Scholar, Staatsbibliothek Munich.
21 Workers were expected to achieve a minimum of 60B per hour; For more details, see Laloux, Pierre, The systètme Bedaux de calcul des solaires (Paris, 1950).Google Scholar
An Introduction to Methods, Time Study, and Wage Payment (Homewood, Ill., 1958).Google Scholar
In 1960, Booz Allen Hamilton produced 1000 reports for 500 clients, had 300 employees and generated a 12 million dollars turnover.
In the 1960’s when he walked away from the firm, he sold back his shares at book value instead of cashing out with guaranteed riches.
In the 1960’s Bruce Henderson, an alumnus of Arthur D. Little, founded the Boston Consulting Group.
1960, 104–18 and Higdon, The Business Healers, chap.
In Strategy and Structure (1962), historian Alfred Chandler exposed his well-known thesis, according to which, structure follows strategy.
67 Chandler, Alfred Jr, Strategy and Structure: Chapters in the History of the American Industrial Enterprise (Cambridge, Mass., 1962).Google Scholar
7, which focuses on AIC; for its impact on shop floor performance, see Johnston, J., “The Productivity of Management Consultants,” Journal of the Royal Statistical Society, series A, 126:2 (1963): 237–249.CrossRefGoogle Scholar
Boston Consulting Group, arguably the world’s second most prestigious consulting firm, was founded in 1963 by Bruce Henderson.
75 Shanks, Michael, “Management Consultants: Breaking through the British Boardroom,” The Director (May 1964): 268–73Google Scholar; see also Kölle, “Amerikanische Untemehmensberater” and Wolfgang Paulsen, “Vormarsch der amerikanischen Untemehmensberater in Europa.”
A year after BCG’s founding in 1964 both McKinsey and BCG established magazines to highlight business thinking.
66 One of the first to highlight these developments was Geoffrey Owen, “Quality Control for the Management Consultants,” Financial Times, 18 July 1966.
76 Servan-Schreiber, Jean-Jacques, The American Challenge (London, 1968), 38–9.Google Scholar
Despite the new energy injected into the industry by Bain and BCG, McKinsey was still a strong competitor and even stronger globally, with more than 50% of its revenue coming from outside the US by 1970.
24 See “Annals of Collaboration I,” 30, and “Bedaux, Charles Eugène,” in Dictionary of American Biography, Supplement Three (New York, 1973), 49–50.
Ten years later, in 1973, Bill Bain and others left the Boston Consulting Group to form Bain & Company, which is also one of the world’s leading consulting firms.
They remained marginal and, in 1974, merged with Stevenson, Jordan & Harrison, a long established, but also declining consulting company; MCA Council agenda, 09/26/1974, Ibid., Box 4.
103 See “Diener vieler Herren” (for the 1974 ranking); and “Roland Berger 60 Jahre,” Frankfurter Allgemeine Zeitung, 21 Nov.
The influence of the Boston Consulting Group specially increased when the British government ordered, in 1975, a study on the future of the motorcycle industry, in the U.K. The national firms had seen their sales collapse, principally in favor of Honda, who taking hold of the American market.
10 See Maister, David H., “Balancing the Professional Service Firm,” Sloan Management Review (Fall 1982): 15–29.Google Scholar
The other consultants reacted by bringing new ideas into the market. For example, the 7S model exposed in 1982 by two McKinsey consultants in their book In Search of Excellence (1982), that promoted corporate culture as the main boost for competitive edge.
17 For Morinni's “apprenticeship” in the United States, see Christy, Jim, The Price of Power: A Biography of Charles Eugene Bedaux (Toronto, 1984)Google Scholar; for his activities in France, see Moutet, Aimée, “Les origines du système de Taylor en France.
69 Kahn, E. J., The Problem Solvers: A History of Arthur D. Little, Inc. (Boston, 1986).Google Scholar
8 and 9; Montgomery, David, The Fall of the House of Labor (Cambridge, U.K., 1987)CrossRefGoogle Scholar; Downs, Laura Lee, “Industrial Decline, Rationalisation and Equal Pay: The Bedaux Strike at Rover Automobile Company,” Social History 15:1 (Jan.
3 See, for example, Noyelle, Thierry J. and Dutka, Anna B., International Trade in Business Services (Cambridge, Mass., 1988), chap.
77 See Chandler, Alfred Jr with Hikino, Takashi, Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, Mass., 1990).Google Scholar
Wacker, Wilhelm W. (Berlin, 1991), 23–49.Google Scholar
By 1995, The Arthur D. Little lineage inspired the most new firms, giving us BCG and Bain and then eventually, L.E.K. and Parthenon.
6 Kyrö, Paula:, The Management Consulting Industry Described by Using the Concept of “Profession” (Helsinki, 1995)Google Scholar.
83 Deschamps, Pascale-Marie, “McKinsey: Les sorciers de l'entreprise sont de retour,” L'Expansion 527 (13–26 June 1996): 116–123.Google Scholar
93 Interview with Doctor Helmut Wolf, former chief executive of Krauss Maffei, on 10 July 1997.
30 Moutet, Aimée, Les logiques de Ièentreprise: L'effort de rationalisation dans Iìndustrie française de Ièntre-deux-guerres (Paris, 1997), 34–5, 212–14 and 261–2.Google Scholar
86 For additional details and references, see Matthias Kipping, “Bridging the Gap? Consultants and Their Role in France,” The University of Reading, Discussion Papers in Economics and Management, Series 8 (1997/98), No.
Matthias Kipping and Ove Bjarnar (London, 1998).
8; for a more detailed discussion and additional references, see Matthias Kipping and Celeste Amorim, “Consultancies as Management Schools” (paper presented at the 15th Colloquium of the European Group for Organizational Studies, Warwick University, 4–6 July 1999).
After the Glass-Steagall act was repealed in 1999, accounting firms also slowly started to expand their services, adding consulting arms.
In 2001, McKinsey was involved with the Enron scandal, as an advisor to the company and the training ground from one of the architects of the fraud, Jeffrey Skilling.
Firms like BCG continued to grow at 10% or more even through the global financial crisis in 2008 and show no signs of slowing.
Clayton Christensen predicted in 2013 that “the same forces that disrupted so many businesses, from steel to publishing, are starting to reshape the world of consulting.”
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