McKinsey and Company (A) 1956 Case Solution


The rubric of the case illustrates a myth of providing the management consulting services to the related clients and other new emerging businesses. Under the particular scenario, McKinsey and Company was one of the successful management consulting firms, which provided vast services and solutions to its prospective clients and other new enterprises to growth within a particular industry. On the other side, a complex and undetermined culture of the company had attracted many new partners to become part of the company’s future success. The uniqueness of the served clienteles was necessary for the business success because it was the main operational activity of the firm which utilized billings and profits then distributes to the related partners and other connected consultants who made important decisions and provides enormous services to the prospective clients. Also, another important factor for the success of the business was that McKinsey was granting authority and ownership to each of the consultants to operate their area and to perform best results in exchange for the compensation and other benefits fixed by the planning committee and managing partners.With all these important considerations, it has been analyzed that retaining a partner was the important decision for the company.It means that if the turnover would be high, then it can be said that a particular decrease in the profit margins would incur because the clients would be reduced upon expelled partner (Performed as aconsultant). Therefore, it is concluded that McKinsey was exceptionally lucky in 1956 because of its ability to increase the firm’s partners for increasing the profit margins more than the expected one. Moreover, being a decentralized structure of the enterprise, partners and other authoritative persons feel free to take decisions individually to expand the size of the business regarding more profits. Thus, with all these concerns, it assesses that McKinsey was under the multiplelevels of structure and internal operations subjected to increase the risks and threats from other players in the particular industry. Also from the client’s perspective, a primary objective is to allow them to earn profits by consider being an individual business rather than distribute the share with the partner. It means that the client would only focus on the earnings rather than provide benefit to the other from the current share. This concept is somehow suitable to attract the customers and consultants to increase the billings and shared profits for the firm’s managing partners. The detailed history of McKinsey also provides fluctuations in the performance of the management because of the turnover of the policies and procedures in against of the economic downturn or upward. So, with all these considerations, it can evaluate the future of the business based on the fixed terms and policies applied by McKinsey overtime.

Problem Statement

After the critical evaluation of the firm, a tweak impact of the overall performance determined several challenges in the stage to provide services with the specialist consultancy. The first issue was an inability of McKinsey & Company to increase the staff overtime because of the high cost and expense turnover, which was distributing to the principle, partners, and individual consultants. As far as the nature of the business was to increase the size of partners instead of office workers. It concludes that a particular problem is directly proportional to the barriers to growing staff. On the other side, there are other internal problems faced by the firm like the use of paid consultancy fee and charge per diem instead of monthly basis. In addition to it, an execution of “One-firm policy” would allow increasing the conflicts among the partners treated as consultants of the firm. The main issue was to take authority and freedom to every partner to make decision suitable for themselves instead of focusing on the company’s development. This sort of policy was somehow increased the billing and profits of McKinsey but take away the power to manage as a leading position of all consultants. Therefore, it these issues would not overcome correctly then it can be said that the company would lose its placeshortly.


Problems faced by the McKinsey’s partners

Since the reorganization of McKinsey with Wellington & Company, the firm’s partners met several challenges from internal to communication with others. In the particular scenario, the nature of the business consists of partners at the same level if the partner is in the form of con-owner or individual consultant with having an own business entity. They all treated at the same degree and thus increased the conflicts to provide increased compensation and benefits from the firm’s activity. Another problem was alack of communication with other partners because the company’s policy offered each one freedom to take decisions rather than focus on other’s decisions. This sort of mixed decision and acted criteria had made severe issues to retain the experienced partners in the long-term because every new partner performed well to take aposition and to decrease the other’s power. Therefore, it is said that if the new policies and procedures regarding limit the increase of partners and their freedom would not implement then the whole scenario would take place at the same level and decrease the reputation and performance of the company overtime.......................................................

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