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The management consultancy effect: Demand inflation and its consequences in the sourcing of external knowledge

  • Article
  • Dec 10, 2020
  • #Management #Inflation
Andrew J. Sturdy
@ajsturdy
(Author)
Nuria Reguera
@NuriaReguera
(Author)
Antonio Blanco-Oliver
@AntonioBlancoOliver
(Author)
Ian Kirkpatrick
@IanKirkpatrick
(Author)
Gianluca Veronesi
@GianlucaVeronesi
(Author)
onlinelibrary.wiley.com
Read on onlinelibrary.wiley.com
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The growing use of external management consultancy services by public sector organizations has generated controversy. Some claim that users have become overreliant on, or even addic... Show More

The growing use of external management consultancy services by public sector organizations has generated controversy. Some claim that users have become overreliant on, or even addicted to, this source of knowledge. However, our understanding of this phenomenon and the precise nature of its risks is underdeveloped. In this article, we address these concerns by focusing on whether using consulting services inflates future demand and on its consequences for efficiency. This is examined in the context of the English National Health Service and the adoption of New Public Management practices such as outsourcing and private finance initiative contracting. Based on an analysis of four years of data, the results suggest that using consulting services is associated with demand inflation and has negative implications for client organizational efficiency. These findings reveal a strong management consultancy effect, emphasizing the risks associated with demand inflation, with implications for both theory and policy.

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Rosie Collington @RosieCollingto · Feb 14, 2023
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A very important paper using data from 120 NHS hospital trusts: "High levels of use of consulting services in the past are linked to greater use in the future despite no efficiency gains." Academic literature on consulting is rich - hope to bring it to the fore with The Big Con!
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