No company is constantly at the peak and the possibility of failing is always in the offing regardless of how stable it seems at present. Most companies that were well-established years ago even suffer the greatest fall. In 2002, global giants included in the FORTUNE 500 declared bankruptcy such as Enron, WorldCom, Global Crossing, Kmart, Polaroid, Arthur Andersen, Xerox, and Qwest. So far, several companies have plummeted simultaneously such as Cisco, Chrysler, Hewlett-Packard, ATT&T and Arthur Andersen.
Why do companies collapse? Most CEOs blame this catastrophe to inevitable factors such as bad economy, market turbulence and weak stock market. However, most corporate failures are caused by one main reason: managerial error. Dunn and Bradstreet said 96 percent of businesses in America fail because of ?managerial incompetence,? which means that the people running the business don?t know what they are doing. According to Tolstoy, companies fall in their own way and failure is part of the natural cycle of business. It?s true that all business industries are vulnerable to the falling sales, shrinking margins and cash flow problems; however, strategic business management is a tested measure to cut down the variables of failure and to help business achieve success.
The changing scopes of business have increased the demands for management consultation. Management consultation is the process of implementing systematic methods to increase the company?s productivity and efficiency. Be it a big, medium or small company, all look forward to the services of management specialists in order to get better profit from optimum utilization of resources.
There are currently three main types of consultation firms. First is for the large, diversified organizations, such as global services that offer upscale services including information technology. The second type is a large management with strategic consulting specialists that offer purely management consultation but not specialized in any specific industry. Finally, there are small firms that focus on specific industries or areas. Management consultants offer specialized services such as CFO services, IFRS services, internal audit service, information security audit services and information technology audit services.
These services are aimed at developing effective strategies to fulfill the company?s goal in the best manner.
On the other hand, management consultants play a great role in elevating the performance of any organization. They work on every detail and study the framework of the company. Examining the deficiencies that hinder the growth or success of a company is their way of providing effective solutions. They connive closely with the management and integrate solutions suitable to the company?s business goals.