As time goes by -Consultancy in Oldenburg-

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As time goes by

-Consultancy in Oldenburg-

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A STUDY OF THE DYNAMICS OF THE SMALL- AND MIDDLE

SCALE CONSULTANTS ILLUSTRATED BY THE CONSULTANCY

BRANCH IN OLDENBURG/ GERMANY.

Groningen, May 2006

Faculty of Management and Organization

Specialization: International Business and Management First Supervisor: Mr. K. van Veen

Second Supervisor: Mr. B. Neuijen

Seyda Ukena

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author-PREFACE

Almost daily one can read one of the names of the big consultancy firms on the front page of newspapers. Management consultancy is with no doubt a hot item. But what is really hidden behind this term? What do consultants do? How has their profession developed?

Especially when it comes to small- and middle scale consultants, our knowledge about the work they do, the products offered, the clients and the career background is limited. Whereas a lot of papers have been written about the working field of big players in the consultancy branch like McKinsey, Accenture, Roland Berger and the Boston Consulting Group, very little is known about consultancy work which is done by smaller players in the industries.

Inspired by a study conducted by K. van Veen and L. Karsten, who analyzed the dynamics of the Dutch Consulting Field in the period 1960-2000 under the perspective of Population Ecology, I was wondering how the consulting field in Germany developed throughout this period. In the Netherlands, consultancy gets a lot of attention, as well from the media, as students as scientist. So what about Germany? What interested me at most was the question how consultancy is understood in Germany. What is a consultant doing? Who are the clients and what services do they offer? These aspects seem to be pretty clear for the big mostly Amercian originated consultants but what about all the small players who refer to themselves as consultants?

Throughout this paper I seek to answer these and other questions regarding the field of small- and middle scale consultants by the instance of the city Oldenburg. The reason for choosing this city is the possibility that this bears for further research. Since K. van Veen has done a similar study for Groningen, it will be interesting to use these two studies for later comparison1.

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Eventually, I want to thank the people without whose support and encouragement this paper would not exist. First of all I want to thank my supervisor K. van Veen for the possibility to work on this interesting project which is part of a long term research. I really appreciated his useful comments and always having been helping me finding back the thread. Furthermore I would like to thank my second supervisor, Mr. Neuijen for his helpful feedback and the companies who were willing to cooperate with me and who find some gaps in their busy agendas for a personal interview: Mr. Schostak, Mr. Weinreich, Mrs. Keller and Mr. Selignow.

Last but not least I want to express special thanks to my parents who always supported me with my study and with great love and my sister, who is always there for me, especially when the world once more just seems to me too big and complicated.

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“Survival for the present obligates one to take certain risks, to respect routines, to be organised…the advancement for the future, on the other hand, requires one to have

vision, to take risk and to be innovative.” (Y. Lowrey 20032₎

SUMMARY

Consultancy is a broad industry which has triggered a lot of interest during the last years. Studies about e.g. the origin of consultancy, the relation of consultancy and sciences, the impact that consultants’ advice has on companies’ operations are accumulating the last years. Consultancy is an industry which seems to grow and fall with the development in other industries and which is strongly linked to overall economic conditions. Consequently, consulting is a highly dynamic industry. Whereas the field of big consultants as McKinsey, Roland Berger and the Boston Consulting Group seems well investigated, there is a great gap when it comes to studies about small- and middles scale consultants. Under this perspective, this study dealt with the question: What are the main characteristics and dynamics of small- and middle scale consultants in Oldenburg from 1960 till toady?

In order to guarantee the feasibility of this study, the investigation has been geographically limited. The country where the investigation has taken place is Germany with a focus on the small- and middle scale consultancy branch in a city in Niedersachsen, called Oldenburg. However, this study has been conducted with the underlying idea of further comparative country analysis. Therefore, the topic consultancy has to some extend been embedded in a European context. Furthermore, I have chosen for an investigation of the development of the branch over the last 40 years, since in 1960 the consultancy branch in Europe and also in Germany slowly began to develop. In addition, such a long-term perspective results in a better understanding of the consulting operations nowadays.

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The research question embraced two main objectives: First, clarification about the nature, the dynamics and the structure of the consultancy branch in Oldenburg/ Niedersachsen since 1960. Second, a description of the main characteristics of small- and middle scale consultants in Oldenburg.

Thus, the study is based on an industry and a company level. Since the information on company level could not be traced back till 1960, the investigation of consultants’ characteristics and their way of doing business was restricted to today’s market only. The two focal points called for different research tools: Data for the first part of the research were collected at the archive of the industry directory in Oldenburg (Gelbe Seiten). The second part is designed as an interrogative study (sending surveys to consultants in Oldenburg), with four additional short case studies.

However, in the course of the study it became obvious that outcomes of the sent surveys could not be processed and incorporated into this study due to time restrictions. Instead only the case studies are represented in this study.

The analysis of the data deriving from the Gelbe Seiten, started with an investigation of three branches that are (partly) interrelated to consultancy: Accountants, Engineers and Consultants. This revealed that the engineers had the longest history in Oldenburg with an increasing amount of firms during the years. In comparison, the amount of accountants and consultants was significantly smaller, whereas the latter showed a more explosive growth. Eventually, this separate analysis of the three branches did not lead to a confirmation or a rejection of the general opinion that consultants originate from an engineering or accountants sector. The following analysis of the birth and death rates of the consultants in Oldenburg endorse an overall fit of the development of the consultancy branch in Oldenburg with theories about the consulting boom of the early 80s.

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in the investigated firms are: high reliability on the established network, specialization in a certain field of expertise and an unsteady project situation. Regarding the dynamics, it seems that although consultancy is well known as fast changing industry, the investigated small- and middle scale firms do not have changed that easily and the inner firm dynamics have been more moderate. Most of the dynamics were found in the staffing aspect and the projects. The staffing patterns changed very quickly as did the amount of projects.

This study demonstrates that the overall characteristics of the small- and middle scale consultants in Oldenburg are quite similar to the main features in the consultancy branch (e.g. relying on good quality, network, and project fluctuation). However, the interviews indicated as well that general economic developments have a different influence on the small- and middle scale consultants than on big players: general trends may just pass along and dynamics within the firms are relatively low. In this respect, each individual small- and middle scale firm develops its specific characteristics, depending on the clients and the offered service.

Altogether, the findings of this study led to some recommendations for further studies which are summarized in the following propositions:

Proposition 1: The market of small- and middle scale consultants gets saturated.

Proposition 2a: The development of quality standards for certain specialization in consulting will improve the demand for small- and middle scale consultants.

Proposition 2b: The development of quality standards for certain specialization in consulting will result in greater segmentation of the market of small- and middle scale consultants, based on quality.

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CHAPTER 1: INTRODUCTION

The purpose of the first chapter is to briefly introduce the reader to the overall topic of this paper: consultancy. First, historical developments and recent studies on the consultancy industry will be addressed and the main topic of this study will become more definited (§1.1). Eventually the in the beginning offered information about the consultancy industry will help the reader to understand the reasoning which leads to the problem statement (§1.2) and finally the formulation of the objectives of this study (§1.3).

§ 1.1 Introduction

Consultancy is a highly complex industry which has triggered a lot of interest during the last years. It has neither any constraint on industries nor can the jobs offered be explicitly described. In addition, the job boundaries are not as clear as the ones of other professions (e.g. physician or teacher).

The following statements about Management Consultancy and its products, formulated by the Federation of European Management Consulting Organizations (FEACO) and the Management Consultancies Association (MCA) demonstrate this intangibility of the industry and the service offered.

‘..the rendering of independent advice and assistance about management issues.’

(FEACO)

‘The creation of value for organizations, through the application of knowledge, techniques and assets to improve business performance. This is achieved through the

rendering of objective advice and/ or the implementation of business solutions3.’

(MCA)

Although several definitions of consultancy exist, none of these comprise the full range of important features of consultancy. The definitions above demonstrate, consultancy

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being a service offered to organizational clients. Hence, it is part of the entirely growing and more and more diversifying sector of organizational services. Figures from America –the country of origin of consultancy- show that in 1980 there were less than five consultancy firms with more than 1000 consultants. In 1997, the number of consultancy firms with a professional staff bigger than 1000 climbed up to more than 30 firms (Ernst and Kieser, 2000). This development shows that the amount of big consultancy firms, and consequently the amount of men / women working as consultants increased enormously. Some researchers refer to this development as consulting boom (Maas et. al. 1992, p.2) because of the sudden and explosive growth of the industry between 1980 and 1997. The term consulting boom is therefore as well for America as for Europe most applicable to the years of the late 70s and the early 80s until today (Faust, 2000), since “[...] 80 % of the consulting experience was generated in the years between 1980 and 1997 and only 20 % in the period from 1886 (when the first consultancy was started) to 1980” (Ernst and Kieser 2000).

Dynamics in the consultancy branch

After a primary slow development of consultancy companies in America in the first 40 years (since 1886), the number of consulting firms grew on average annually 15%. Thereby, its character changed from former “management engineers” to “general- management- consulting” (Faust, 2000).

Since the 80s, management consultancy was all over the world considered as being very lucrative and consequently was extended to diverse business areas. Furthermore, this field is a very dynamic industry since it is largely influenced by economic developments and changes. When talking about dynamics, it is important to differ between different kinds of dynamics. For this paper, it is assumed that one can differ between:

a) dynamics of the whole population of consultancy firms and b) dynamics of individual firms themselves.

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the market. The latter is focusing on the individual firm and can be described by changes and transformation of aspects like products, employees and clients.

Examples of dynamics in the industry

A case in point for the external impact and the consequences of the changes in the consultancy industry is the Information Technology (IT) branch. In the early 80s, first forms of Enterprise Resource Planning (ERP) systems emerged and provided an integrated suite of information technology applications that support the operations of enterprises. The implementation of ERP systems is a complex process, affecting the whole company. Therefore, the need for specialists in the IT sector, third parties who could help with the implementation and the formulation of a well suited IT strategy became more and more essential. In these years, the IT branch became a separate field in the consulting industry and many new consultancy firms emerged in this sector. In the following 90s, the consulting industry steadily increased due to unprecedented technological change and the upward surge of IT implementation.

However, in the last years, the demand for IT consulting decreased since the explosion of internet usage (dot.com boom) declined. The BDU (Bundesverband Deutscher Unternehmensberatung) revealed that the turnover of IT projects decreased in 2004 by 1,5% in Germany, whereas the Strategy Consultancy and Corporate Service Consultancy increased by respectively 1,5 % and 3,0%4 respectively. The decline in the IT related consultancy can be traced back to the abrupt end of the dot.com boom and the end of the transformation and support of software changes in companies. To some extend, it is also a side effect of the stagnating or even decreasing economic development in 2004. The consultancy branch, and in particular the IT consultancy firms are highly dependent on the investment level of the economy in a certain year. (IT system implementation can only be realized at certain investment willingness.)

By the example of the interrelation of the fast emergence, growth and sudden decline of the IT sector on the one hand and the parallel developments in the consultancy branch on

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the other hand, it becomes obvious that the latter strongly reacts upon environmental developments and is therefore very dynamic.

Another dynamic aspect of the last years is mergers and acquisition, which is a hot item in the consulting industry nowadays, as well as is the separation of the accountancy arms and consultancy. An appropriate example is given by the Enron-Andersen debacle5 which got a lot of attention and resulted in a wide discussion about the off-splitting of the consultancy arms of many accounting firms. Since then, various take- overs and separations have taken place. For instance, Accenture, split from Arthur Andersen and CapGemini and eventually bought the consulting arm of Ernst & Young in 2000.

Changes in the literature about consultancy are also indices of the ongoing changes in this industry. Whereas earlier literature had generally a more positive tenor, much more critical articles and books have been published throughout the last years. The latter highlight the difficulties of accreditation of consultancies, the risks of hiring an external advisor and the tricks used by consultants to gain and retain clients (O’Shea and Madigan 1997 and Ashford 1998). Some of them go even further and argue that consultants come up with solutions for problems which they created themselves (Kieser, 2001).

Summarized, this brief review of remarkable events in the consultancy branch shows the dynamic, characterizing the market of this industry in terms of its size and services. However, evidences of dynamics of individual consultants are seldom and further case studies will be required to analyse this aspect.

Consultancy under scientific perspectives

The majority of the recent studies attempt to illuminate the historical developments of the consulting industry (e.g. McKenna 1995; Kipping 1999), the increasing differentiation in products, the industries’ segmentation and the role of consultancy as source of knowledge management. Others focus on the rhetorical techniques used by management consultants

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(Clark 1995), the legitimizing role in conflicts and some stress the relationship between clients and consultants (Wright C., 1995). Furthermore, discussions about hypothetical questions like the influence of the advice of consultants on the economic downward/ upward tendency (by generating the problems in order to solve them afterwards) are very common as well. Consequently, it becomes clear that the consultancy branch display various dimensions that can be examined in detail.

Eventually, our knowledge about the daily operations of various types of management consultants (e.g. small- and middle scale) is still very abstract.

§ 1.2 Problem statement

The brief introduction has pointed at some current issues in consultancy and sharpened our focus on the dynamic character of this industry. This helps us to clearly define the problem, leading to this study.

Most of the aforementioned literature seems to generalize the consultancy branch, based on findings about big consultancy companies and yet disregard the small- and middle scale consultancy firms. But the consultancy industry is extremely heterogeneous which makes it worth to look at different clusters (small companies, big companies, generalists, specialists) separately.

An exceptional study of the Cambridge University Small Business Research Centre (SBRC) revealed that especially the small firm sector in the consulting branch shows a high degree of entry, growth and exit. Furthermore, it displays that 98 % of new consultancy firms in the UK between 1985- 1989 belonged to the small business sector and every third firm disappeared within the first three years (Keeble, 1995). These findings for the UK market indicate that there is a lot of turbulence regarding the small business sector for consultancy.

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Research of Faust, Armbrüster &

Kieser a.o.

???

are in- depth studies about the small- and middle scale consultants in Germany. Carefully monitoring and analyzing the dynamics and characteristics of small- and middle scale consultancies in other countries will be an empirical contribution and will help players in this field to anticipate future trends and to react appropriate upon them. Additionally, it will lead to a better understanding of the small- and middle scale consultancy firms.

The purpose of this research is to partly fill the aforementioned gaps, which are: a) lack of studies about small- and middle scale consultancy firms.

b) lack of knowledge about the dynamics of the population of small- and middle scale consultancy in Germany.

c) lack of knowledge about the dynamics of individual consultancy firms. d) lack of country comparative analyzes.

On that account, an in- depth study of the dynamics of the population of small- and middle scale consultants and an investigation of firms’ individual life histories is needed. In the following figure, the line of reasoning behind this research is visualized

(figure 1).

Figure 1: Two dimensional research context.

The broader context in which this research is embedded can be portrayed by two dimensions: these are the size of the consultancy firms, distinguished into small- and

C ount ry Ge rmany N ethe rlands Firm size

Small- and middle

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middle scale and big ones (horizontal) and the country in which the firms are settled, Germany or the Netherlands (vertical).

The choice for the segmentation into big consultants on the one hand and small- and middle scale consultants on the other hand goes without saying (see the aforementioned arguments in the problem statement). Instead, the choice for the two countries Germany and the Netherlands as starting point for this study and the special focus on Germany need some further explanation.

First of all, Germany has a coordinated institutional framework. As such, it reveals some key institutional features (long term financing of companies, cooperative industrial relations, and important role of unions, initial vocational training, technology and standard setting cooperation) that structure the business system (Soskice, 2002). Business systems are distinctive patterns of economic organization that vary in their degree and mode of authoritative coordination of economic activities and in the organization of linking owners, managers, experts and other employees (Whitley, 1999). As stated by Feenstra (1997), these characteristics of economic coordination and control systems can impact the variations in the nature and behaviour of firms since they are not identical across countries.

By contrast, the Netherlands have a coordinated institutional framework as well but show much less typical characteristics for this form. For instance, the coordination of business outside the competitive market interactions (business coordination) is less strong as revealed by Stokman et. al in 1985 (Soskice, 2002). Consequently, firms settled in the Netherlands may reveal a different nature and behaviour. Additionally, consultancy has a much longer history in the Netherlands than in Germany (§ 2.3 and § 2.4).

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What are the main characteristics and dynamics of small- and middle scale consultants in Oldenburg from 1960 till toady?

§ 1.3 Research objective

Throughout this paragraph I will identify the main purpose of this study and the objectives which should be achieved. Since this study is overall descriptive, the main research objectives are well expressed in the following main research question (Cooper and Schindler, 2003):

The present study seeks multiple objectives:

First, it should give a rough description of the overall consultancy market in Germany and the Netherlands. Detailed knowledge of the historical development of the markets and today’s general situation, later results about the consultancy branch in Oldenburg and about individual firms can be placed in a better context.

Second, it should give some clarification about the nature and the structure of the consultancy branch in Oldenburg/ Niedersachsen since the early beginnings in 1960 until 20056. Earlier in this paper (§1.1), the differences in dynamics were mentioned. One interpretation of dynamics referred to the dynamics of a whole population (§1.1). Accordingly, the second objective of this study is to shed more light on the dynamics of the consulting industry in Oldenburg. Therefore, the consulting market will be investigated by means of three variables: lifetime, quantity and birth& death rate. For this purpose, the following aspects have to been addressed: number of consultants, time period of existence and the fluctuation. Like this, the growth process of the consultancy branch in Oldenburg and the dynamics of the industry will be highlighted.

Third, the study aims at an identification of the characteristics of small- and middle scale consultancy firms in Oldenburg and their development during the last four years. This

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finally will result in a better understanding of the characteristics and the growth process, thus the dynamics of individual consultancy firms as mentioned above (§ 1.1). The aspects which will be discussed at two different times (four years ago and today) are: Firm Structure & Strategy, Products, Skills& Staff, Clients and Competitors. These research aspects will be explained in more detail later in this study. Eventually, the outcomes of the individual firms will be linked to the results about the industry development and dynamics in Oldenburg

Subsequently, after having addressed the main topic – the small- and middle scale consultancy in Germany- one might consider extending the study (see figure1). This could as well result in a cross-border comparison (vertical extension) 7_{or in a comparison} of the results yielded in this research with the ones of earlier researches about big consultancy firms (horizontal extension).

§ 1.4 Conclusion

After having been acquainted with the consultancy field in general and its most striking developments, the problem statement and the research objective were clearly formulated throughout this chapter. This introduction has highlighted the relevance of this study about the small- and middle scale consultants. In the following literature review, various researches and developments dealing with the topic consultancy (and regarding it from different point of views) will be presented. The focal point will be on Germany and the Netherlands. The remainder of this paper is structured as follows. First, the literature review is followed by a chapter about the methodology of this paper. After the methodology, the next chapter presents the findings about the market of consultancy in Oldenburg since 1960. Next, the findings about the small- and middle scale firm characteristics and dynamics in Oldenburg are evaluated and discussed. The paper ends with a conclusion and discussion part and recommendations for further research are made.

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CHAPTER 2: LITERATURE REVIEW

Although the interest for the consulting field has significantly grown and triggered the attention of researchers with various backgrounds, the core of scholars can be restricted to only a few names. Names which are most frequently brought in conjunction with the consulting field are Armbrüster, Kipping, Kieser, Engwall, Clark, Faust and Deutschmann. In order to shed some light on the different flows which eventually formed the present consulting industry, an overview of some of this literature will be given and important issues that one encounters when dealing with consultancy will be discussed in the following paragraphs.

§ 2.1 The origin of consultancy as profession

In his study Faust (2000) argues, that consultancy has its roots in the engineering sector. The first consultancy related services were offered before 1930 by management engineers. They were hired for solving and analysing thoroughly technical problems and emerged first in the United States (US).

By the 1930s, management engineers in the US got also hired by banks to improve the overall strategy, structure and financial performance of companies (Mc Kenna 1995). This development in the profession of the engineers did especially take place in the US, where most of the big consultancies are originated.

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Management engineers soon did not constrain their working field only to the banking sector, doing investment analysis, but offered broader services to companies in all kind of industries. Due to the second industrialization wave in 1900 and 1930, technology development accelerated and consulting engineers became more and more specialized in the solution of highly technical problems and opportunities (Faust, 2000). As a consequence, the knowledge management also changed. Instead of deriving from a more practical and technical background, more and more consultants were holding an academic degree (e.g. in accountancy, technology, human resources, marketing or finance).

Nowadays, remarkable differences between the former term management engineers and the profession of a consultant are obvious. A consultant is a professional who provides expert advice in a particular domain or area of expertise such as accountancy, technology, law, human resources, marketing, medicine, finance, public affairs, communication, or more esoteric areas of knowledge, for example engineering of different kinds, scientific specialties such as materials science, instrumentation and stress analysis (Wikipedia). Engineering implies more scientific and technical knowledge. Engineers often apply mathematics, science and technical experience to solve human problems in form of a design of better processes or objects. Alfred Kieser (2002) devotes one paragraph in his book “Wissenschaft und Beratung” to the differences in the development of business and engineer science. He argues that the engineer science does not suffer the problem of divergence between praxis and theory, as the business science has. He states that the difference lies in the fact that engineers solve problems that they do not create themselves. Thus, engineers use their knowledge to (re)construct or produce concrete objects (e.g. developing a new computer system, including the specification of functional requirements, design and testing) and to offer solutions to technical problems. In contrast, business scientists explore nature in order to create new knowledge and to find solution for business problems.

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providing expert advice in a particular domain or area of expertise. But still, the service offered by consultancy overlaps with other service activities.

§ 2.2 Consultancy services

Kipping and Engwall (Kipping and Engwall, 2002) argue that industries got classified by its products. Thus, the main product in the consulting industry is ‘management knowledge’. This implies that the consultants’ work is usually restricted to the ‘justification of decisions’ or to ‘support certain activities’, referring to the superiority of knowledge that they are said to have (Kipping and Engwall, 2002). But with regard to the broad variety of operations of contemporary consultancy firms, this limited notion of consultancy -stated by Engwall and Kipping- might be rethought.

Nowadays, consultancies offer to a great extent very different kinds of services and often differentiate and divide their activities. Therefore, it can be argued that the service they offer can not only be restricted to the before mentioned identification criteria such as the ‘justification of decisions’ or to ‘support certain activities’. Many consultants also added the actual implementation to their work8. In consideration of the heterogeneity of the services offered by consultants, it might be helpful to further divide the field. First of all, we can differ the broad field of consultancy into strategic and management consultancy.

Strategic consulting v.s. Management consulting

As the term already indicates, strategic consultants are more concerned about specifying an organization’s strategy, developing policies, plans to achieve certain objectives and allocating the necessary resources. The service of management consultants is needed in more specific situations where more practical solutions have to be found, resulting into appropriate recommendation and implementation. However, the task field of management consultants is blurred by the many different branches in which it can be further divided.

8_{Wikipedia contributors, "Strategic management," Wikipedia, The Free Encyclopedia,}

http://en.wikipedia.org/w/index.php?title=Strategic_management&oldid=38464911 (accessed February 8,

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Key services

In general, one can classify consultants by the offered services what leads to the following key services:

a) Information Technology (IT) e) Human Resources (HR) b) Consulting/IT-Implementation Management

c) Corporate Strategy Services f) Outsourcing Services. d) Operations-Management

(FEACO 2003)

Besides these key services identified by the European Management Consulting Organizations (FEACO), some consultants also include interim management to their service package, coaching and training or accounting services. Consulting on the field of Marketing is also very common These different service aspects stress the ambiguousness of consultancy. Many of the big consultants offer all this different service activities (generalists). It is questionable, to what extend small- and middle scale consultants do have the resources and the knowledge to cover all these activities or that they more often develop as specialists, focusing on just one main business.

Key clients

Eventually, consultants can be differentiated according to the sort of clients they serve. Consultants often specialize in just one client market, in order to better position themselves. Examples of often served industries are: automotive, fast moving consumer goods, luxury products, pharmaceuticals, telecommunication and finance.

§ 2.3 Consultancy market in the Netherlands

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In their study, Karsten and van Veen focus on the Dutch consultancy market which was much earlier developed compared to many other EU countries and has gone through remarkable changes during the years. The origin of the Dutch management consulting field can be dated back to the 1920s. At this time, the first consulting firm was established by the 2 graduates of the University of Delft Hijmans and van Gogh (Karsten and van Veen, 2000).

In the years before 1945, another name came up: Berend Willem Berenschot strove to change the reputation of consultancy. He promoted the role of consultants as distributors of knowledge by supporting the establishment of the Dutch Institute for Efficiency (Nederlands Instituut voor Efficiency, NIVE) in 1925. It highly marked the consultancy branch and its activities in 1930. With the emergence of 2 other more social institutes (Nederlandse Stichting voor Psychotechniek, NSP and Nederlands Instituut voor Preventieve Geneeskunde, NIPG) and the emergence of consultancy firms outside the engineering sector, the first institutionalized structures of management know- how in the Dutch consulting field were put into place (Karsten and van Veen, 2000).

In the post- war period, the Berenschot consultancy firm expanded its work and focused on a system of accelerated training. This training scheme was very successful resulting in a remarkable growth of the Berenschot firm during 1949 from 20 to 100 employees. Another area which became quit popular especially under Dutch consultants was the measurement of productivity. In order to make higher productivity visible, firms hired consultants. Consultants with strong engineering backgrounds were hired to do the auditing and the monitoring of these firms. They analyzed labour outputs and matched it with corresponding measurement tariffs. Another area was the demand for consultants grew remarkably was in work classification. The overall picture of the consultancy in the Netherlands in the 1950s shows that this field was highly connected to specific institutional arrangements.

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rethink their activities and offered products. Another upcoming challenge was the American consulting firms, setting up subsidiaries in the Netherlands. New competitors also came from the United Kingdom.

The consultancy market expanded very quickly. Whereas in 1963, there were only 15 consultancy firms registered as Members of National Organization of Consultants, in 1989 this number grew up to 200 firms (Keeble, 1995). These changes were partly a consequence of rapidly rising wages and the threat for labour intensive industries to lose their market position. Dutch and American consultant collaborated on this by doing sector- specific studies to bring up plans to help those industries to survive. The solution was often found in restructuring of the firms which in turn generated new activities and possibilities for consultants.

Since 1989, the Dutch consultancy has undergone a real boom. In 2001, the Dutch consultancy market belonged to the top 5 management consulting markets, generating a turnover of 2.4 billion. Euro. However, 2 years later in 2003 its position was replaced by Spain at 2.6 bill Euro. In contrast to the German consultancy market which grew by 1% in 2003, the Dutch market recorded in 2003 a decrease of 3%9.

Since the Netherlands have shown very early signs of the development of a knowledge community on management issues, it is interesting to investigate to what extend these early developments have shaped its consultancy industry in comparison to other countries. Germany, for instance, had a very slowly growing consultancy field which will be demonstrated in the next paragraph.

§ 2.4 Consultancy market in Germany

In this section, a brief description of the consulting field in Germany will be provided to the reader. In consideration of the time scope of this research and other limitations, it is not possible to do an in- depth investigation of the (historical and today’s) German consultancy market. However, since the focus of this study is on a German city, the todays’ German market will be described more detailed, compared to the earlier

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description of the Dutch market. Most of the information will derive from statistics about the market. The most recent available information was found of the year 2003/04.

Retrospective

As in other European countries, the German consultancy field emerged not until consultancy agencies of American origin like McKinsey, and the Boston Consulting Group followed their clients to Europe (Faust, 2000). Firms originated in Germany, generally did not hire external consultants to ask them for advice about their business. Solutions were more often found and problems were solved inside the company (Faust 2000). Except a more inner concentration, this also meant that knowledge was not shared effectively between companies and the application of general developed models was very uncommon.

But over the years, German consultants who in the beginning had primarily focused on the optimization of production processes changed –similar to the Netherlands- the focus of their profession (also §2.1). Due to the industrialization in the late 19th century, their advice was more and more needed in new areas such as marketing, corporate strategy and administrative related questions. The biggest German consultancy firm, Roland Berger, was established in 1967 and its founder previously worked for four years at the Boston Consulting group (Karsten et al., 2000). These facts show, that management consulting developed relatively late in Germany.

Presence

In 2004, the German consulting market increased for the first time. It is the second largest in Europe at 13.1 billion Euros (27.3 % of the total market), following the UK market which is the biggest one in Europe (29.3 %) in 200310_. _{The worldwide market for} management consultancy is currently worth over 78 billion Euros. About one half, 39 billion Euros, of that work is generated by Europe based consultancy firms. In order to maintain the positive development of the German market, many German consultants started according to the BDU to restructure their business during the last year. They tend

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to take clear positions in the market with respect to specific topics and branches like Operations Management and Corporate Strategy Services (FEACO 2003). The specialization and diversification of the consultants’ offered service (advertising, marketing, strategic advise, IT advise, financial etc.) makes the market more transparent and enables the client to get a very quick overview of the different products. The year 2004 revealed that middle- scale firms were more efficient in restructuring their process and therefore recorded better results in 2004 than their big counterparts.

Table 1. Key figures of the Consultancy market in Germany (source: BDU-Studie „Facts & Figures zum

Beratermarkt“ 2004, Tabelle1)

Table 1 shows more recent figures from 2004. The realized total market turnover was in 2004 € 12,34 billion and has therefore decreased (€ 13,1 billion in 2003). In 2004, 9900 small consultancy firms, 4400 middle scale firms and only 40 consultancy firms generating an annual turnover beyond € 20 million existed. These figures show that the small firms form the majority in the German consultancy market (69% of the total market) whereas the Top 40 only represents 3% of the total market. In terms of market share, the Top 40 group yields 49,4% of the total market turnover (€ 12,34 billion) and the small firms only 15,6%. The total amount of people working in 2004 as consultants in Germany is 67.300. These are about 21% of the in overall Europe employed management consultants11.

The highest growth percentage is yielded by the middle scale segment whereas the small consultancy branch decreased by 1%. However, according to the BDU, the decrease of

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the small consultancy segment is caused by firms who exceeded the boundary of a turnover of € 0,5 million and the high fluctuation of firms in this segment. Many consultants leave the market already after two years because of attractive alternatives or because of unsuccessfulness12_.

Core competences of the middle scale firms are the before mentioned specialization in branches and topics. This gives them a competitive advantage in the marketing of their products which makes the acquisition of projects easier. Furthermore, clients give strong priority to firms with experience and a good reputation. Therefore, it is very important that consultancy firms pay a lot of attention to both for instance by well defined recruitment criteria and trainings for their employees in order to increase their knowledge and well maintained network.

According to the classification of the BDU, the consultancy market is divided into the strategic sector, organizational consultancy, HR- consultancy and IT consultancy. Since the implementation of systems like the ERP (Enterprise Resource Planning) and SAP (Systems Analysis and Program Development13) has been fulfilled in the majority of firms, the demand for consultants on this field decreased in 2004 by 1,5% whereas the demand for strategy consultants increased by 3,0% (figure 2 below).

Figure 2 Growth of the different segments of Consultancy source: BDU-Studie „Facts & Figures zum

Beratermarkt“ 2004, Tabelle 1.

12_{BDU, Der Unternehmensberatungsmarkt 2004}

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Challenges

However, the growth of the EU and new market opportunities in China are challenges for companies from different sectors and this provokes a greater demand for strategic consultants on the field of International Accounting Standards, Merger and Acquisition and Expansions. Increased demand for consultants came in 2004 especially from classic industries like manufacturing and pharmaceutical firms (BDU 2004).

Clients and demand

The public sector denotes a decrease in the demand (-0,2%) for the work of consultants. This is especially true for the market leading consultants (like Roland Berger, McKinsey, Boston Consulting Group, and Bain and Company). The projects of the public sector given to small- and middle scale firms in contrast increased, as expected in forecasts for 2004 (FEACO 2003). City and community councils prefer to hire smaller consultants for the introduction of new controlling systems or the restructuring of controlling systems (BDU Facts and Figures 2004).

Trends

Trends for 2004 were seen in growth-oriented projects to guarantee the security of IT systems and to optimize IT driven distribution. Furthermore, possible and ongoing mergers in the banking sector, loan granting procedures and the new mandatory act on control and transparency offer possibilities for consultants. Another important issue is outsourcing, where consultants fulfill the role of service partners in information technology, services or human resource management.

Growth in the German consultant market

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German GDP) has declined by 0.01%. This means, that the consultancy industry could not yet keep pace with the overall economic development.

Figure 3: Growth rates of the German consultancy industry since 1994 (in terms of yielded turnover). (Source: Facts and Figures zum Beratermarkt 2004, BDU e.V.)

Figure 3 on the previous page represents the growth of the consultancy industry between 1994 and 2004. It shows a slight downward movement after the peak in 2001. According to the BDU, the positive expectations of the consultants for the next years should have influenced the growth rates for 2005 positively again.

§ 2.5 Conclusion

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What are the main characteristics and dynamics of small- and middle scale consultants in Oldenburg from 1960 till toady?

CHAPTER 3: METHODOLOGY

In the following, the research methods that are followed throughout this study will be discussed. In accordance with Cooper and Schindler (2003), this methodology chapter comprises the steps that are taken during this exploration in more technical terms, out set by the research question (§ 3.1), and definition (§ 3.2), assumptions (§3.3)further investigative questions and research phases (§ 3.4), the research model (§ 3.5), the sampling design (§ 3.6), a description of the data collection (§ 3.7) and the limitations that are imposed on this study (§ 3.8).

§ 3.1 Research question

As stated earlier, the main focus of this paper lies on the exploration of the small- and middle scale consultancy market in Oldenburg/ Germany. The line of reasoning behind this research decision became plausible in the prevailing chapter (§ 1.2 and § 1.3). The main research question deriving from the foregoing is:

This research questions bears the challenge of investigating consultancy in Oldenburg over a time period of 40 years. In order to accomplish this goal, the question is broken down into further investigative questions (§ 3.4). To guarantee a proper understanding of the research question, several terms will be explained first.

§ 3.2 Definition and explanation

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Small – and middle scale versus ‘big players’

Consulting firms can be differentiated based on various aspects: on specialisation on certain services, strategic or management service, size in terms of employees, size in terms of the annual turnover etc. Regarding the latter one, the BDU (Bundesverband Deutscher Unternehmensberatung), scales consultancy firms into the following three groups based on their annual turnover (see also table 1):

Top 40 - more than € 20 million annual return

Middle- scale - € 0,5 till € 20 million Small firms - up to € 0,5 million.

The middle scale consultancy firms differ significantly from the big players. In contrast to the small- and middle scale consultants, the big players do have the potential to influence the general management knowledge and to strengthen their own involvement in the problem solving in this area. They develop holistic solutions and often also find new theories on which further scientific research might be based. The small- and middle scale consultants oftentimes get new projects from those big players to support them as process managers or trainers in strategic projects14.

Consultancy

Throughout this research the term ‘consultancy firms’ will be used in a broader way. Given that it is endeavored to compile data about this business since 1960, one has to take into account that by that time, the term ‘consultancy’ did not even exist as such. Therefore, when starting this exploration of the field of consultancy in Oldenburg, technical engineers whose profession elaborated during the end of the 19th century towards a new profession (the one of ‘consulting engineers’) 15 will be included in this research as well. Thus, firms which are included in the first part of this study about consultancy are: ‘beratende Ingenieure’ (‘management/ counseling engineers’),

14_{Faust, 2000 SOFI Mitteilungen}

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‘Wirtschaftsberater und Volkswirte’ (economic adviser), ‘Unternehmensberater’ (management consultants)’ and ‘Wirtschaftsprüfer’ (accountants).

In the following, the term consultants and consultancies will be used for the German equivalent ‘Unternehmensberatung/- er’. A further differentiation in management and strategic consultants was not applied.

Period of time

For this study, the population of consultants in Oldenburg was analysed since 1960. It is necessary to go back that far in time (and investigate the market over more than 40 years), in order to see and understand what developments the consultancy branch in Oldenburg had been going through, what heritage the local consultancy branch has and how it had been growing. This investigation of the market will be helpful to further understand the dynamics of certain individual firms nowadays. The timeframe is dated back to 1960 since by then the consultancy branch in Europe, especially in Germany, slowly began to develop (Kipping 1999).

City choice

The choice for the region Oldenburg has to be seen in the context of further research possibilities. Later on, it may be considered to compare these findings with findings of the Dutch market. The data about the Dutch market will in that case derive from a research project of K. van Veen. He conducts a research about the dynamics of the Dutch consultancy market, questioning why it developed the way it did and if population ecology as such is applicable to it. In this research of Mr. van Veen, special attention is given to the development of consultancy firms in the Northern part of the Netherlands, the region Groningen.

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the big consultancy firms, which are generally of American origin, are as well applicable for smaller firms in the industry.

The city Oldenburg

The German city Oldenburg (in the federal state Niedersachsen) is the economic, cultural and administrative centre of the Weser- Ems region and counts 158.000 inhabitants. Various industries have settled around Oldenburg and with the only regional university, the Carl von Ossietzky University and three universities of applied science with various research institutes, it can be seen as the educational centre of this region. There are 60 industrial companies settled in Oldenburg (city). The majority of these firms are from the automotive or manufacturing field -like Peguform and Saia Burgess- but also the food sector has made a great contribution to the regional industrial turnover (37,8%) in 2005, as demonstrated in the Industrie- und Handelskammer (IHK) report 2005. However, the predominant industries in Oldenburg are the retail and the service sector (such as banks and insurance agencies). The number of employees in this sector has increased since 1980. Whereas in 1980, 48,6 % of the total employees in employment worked in the service sector, there were 61,8 % employed in this sector in 2002. 13.000 new jobs were created in this field.

Nowadays, 52.395 people are employed in this sector (81,5 % of the total amount of working people), including insurance agencies, hotel and restaurant industry, financial institutions, business-to-business institutions, estate agents and public and private service institutions.

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Regional statistics of the basic economic numbers for the overall federal state Niedersachsen show changes of the amount of firms and their turnover structure over several years. Although the consultancy branch is not mentioned separately, it is included in the statistics in one sector together with law and accountancy bureaus, market research bureaus and cooperation companies (No. 74.1). The numbers for this category show an opposed course of the development of the amount and the turnover. Whereas the amount of firms for the branch No. 74.1 steadily increased during 2000 and 2002, the total turnover decreased. In 2003, the reverse is true: the amount of firms has been reduced by 615 in comparison to the previous year and the turnover has increased by 941.898 (in € 1000,-) (Appendix B). This numbers show that the realized turnover seems to be higher with fewer players at the market.

§ 3.3 Assumption

Given information of the IHK, none of today’s consultancy firms in Oldenburg meets the turnover requirements of earning more than 20 million Euro in order to belong to the big players in the consultancy market. Based on this information of the IHK about current years, I made the assumption, that also none of the firm records back until 1960 do match the requirements for being classified as big player. Thus, all the firms in the database are considered as small- or middle scale firms. Thus, when talking about the consultancy market in Oldenburg, we actually talk only talk about the market of small- and middle scale firms in Oldenburg.

§ 3.4 Investigative questions and research steps

The following investigative questions are formulated to help answering the main questions. They will be the guideline for the following analysis and give more structure to the subsequent chapters:

1. What kind of consultancy related institutions do exist in Oldenburg?

2. What is the overall structure of the consultancy market in Oldenburg in the period from 1960 till 2004?

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b. Did the consultancy branch develop from an engineering or social science background (origin)?

c. What is the firms’ period of existence (lifetime)? d. What are the birth and death rates (fluctuation)?

3. What main characteristics and dynamics do todays small- and middle scale consultancy firms reveal in Oldenburg?

a. How are they structured? b. Who are the main clients?

c. How big is the local competition?

d. What products and services do they offer?

e. How does the employee structure at the firms look like?

Starting point for this study has been the literature research. In this part, a brief overview of the German and Dutch consultancy market and its development were provided. A broader understanding of the consultancy market in Germany is helpful to understand the developments of the consultancy firms investigated in Oldenburg. Additionally, a short description of the institutional situation in which the small- and middle scale consultancies in Oldenburg are embedded will be given. Building up on these first general investigation of the market (literature), the then following questions will be answered based on empirical study of the consultancy firms in Oldenburg

§ 3.5 Research Model

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individual small- and middle scale consultant firms in Oldenburg. Thus, two models are generated in order to exemplify the research’ structure.

Figure 4a: Research Model 1st_part

The model shown in figure 4a represents the steps and variables incorporated in the first analysis. To begin with, this part deals with the exploration of consultancy in Oldenburg in the broader sense, the analysis of the appearance and disappearance of consultancy related branches (their lifetime and quantity) as well as with the identification of the birth & death rates of the consultants. This form of investigation partly relies on the practices of an event history analysis described by Hannan and Carroll (2000) which reveals the life histories of firms by designing their entrances, start-ups, diversification, dissolution or acquisition. The latter are so called “events”. Since we can not retrieve any information in the given time scope about possible acquisitions that might have taken place in the past, we only use the three variables: lifetime, quantity and market entries/ exits. Eventually, this will lead to a better understanding of the development of the consultancy branch in Oldenburg in general: the origin of consultancy as a separate sector, its background, amount of firms etc.

Consultancy Market in Oldenburg

Engineers Accountants Consultants

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Figure 4b: Research model 2nd_part

Second, the “black- box” (de Leeuw, 2000) – in this case the consultancy market in Oldenburg- will be opened and an in- depth investigation of individual consultancy firms in Oldenburg, their main features and their dynamics, will be accomplished (see figure 4b). For this purpose, the assembled variables are partly deriving from six main management components: strategy, structure, culture, people, resources and results. These dimensions are often used in management reference models like the INK model, the 7- S model and the KPMG model (Nieuwenhuis, 2006). As those models focus on the internal processes in order to determine the way a company is operating, I made a selection of only some of those components. The final choice for the variables is also influenced by the form of research which will be conducted. Regarding the fact the the information about the company will be gathered in a one- time interview with only one representative of the company, it will not be manageable to get overall qualitative and valid information about the culture and the shared values. Although often stated in the firm philosophy, these variables are rather intangible e and could better be analysed by

Small- and Middle Scale Consultants in Oldenburg

Small- and Middle Scale Consultants in Oldenburg Structure&

Strategy Products Staff& Skills Clients Competitors

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long time monitoring. Thus, the variables chosen for this research are: Staff& Skills, Structure & Strategy, Competitors, Products and Clients. The aspects will be briefly discussed in the following.

Staff& Skills: this aspect deals with the staffing structure of the firm, how many people are employed, what educational backgrounds they do have and what kind of training they get at the company they work for.

Structure & Strategy: this variable focus on the internal processes, on the responsibilities of people, the founding decision, long-term goals of the company and the turnover structure.

Competitors: addresses the competitive environment of the consultants in Oldenburg, the amount of direct competitors and the possible different competitors from different branches.

Product: This variable takes a look at the result of the consulting firm, its activities and its diversification or specialization.

Clients: the clients aspect focus on the client structure of the company, from which group the highest demand does come from, how many clients the firm has in average and also how they acquire them.

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§ 3.6 Data collection

As shown, this study comprises two aspects: an analysis of the consultancy market in Oldenburg and its development in generaland an analysis of individual small- and middle scale consultancy firms in Oldenburg and their way of doing business (figure 4a and 4b).

In order to get data about the amount of consultancies in Oldenburg and the development of the branch was collected at the archive of the industry directory (Gelbe Seiten) in Oldenburg. The first visit has taken place on 10th November 2005. A second visit was done on 2nd February 2006. The reason why it is chosen for annual directories of the telephone books as main source is that other institutions or companies have not yet published industry wide or regional branch reports for the consultancy branch. Besides, due to the voluntary entry in the Gelbe Seiten we assume that those firms well considered their decision and are more committed to the profession they inscribed for.

Additional information is obtained by the contact persons Mr. Thomas at the Industrie und Handelskammer Oldenburg (IHK) and Mr. Weyrather head of the Bundesverband Deutscher Unternehmensberatung (BDU).

Moreover, data relevant for this research are based on scientific papers written about management consultancy and other publications like books, articles, studies conducted by various scientists.

Based on the findings about the whole market, including the three branches accountants, engineers and consultants, only the data about the consultants will be used in the subsequent analyses.

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was available which was customized for our own purposes16. The survey contains questions, covering the introduced variables (Structure & Strategy, Product, Employees, Clients and Competitors)

Additionally, personal interviews were taken at a selected group of small– and middle scale consultants in Oldenburg. The criteria which they had to correspond to are: on the one hand that they still exist nowadays and on the other hand that they existed five or more years in a row. The FEACO handles similar selection criteria of a minimum existence of three years for consultants who are registered at the FEACO database. It goes without saying, that for this study, the selected firms also had to comply with the definition of small- and middle scale consultants. The interviews held with the founders of the companies were semi- structured and based on the designed questionnaire. In this manner, it is on the one hand possible to get to know the opinion of the interviewed person and on the other hand to see whether the informant confirms insights and information we already got in the first part of the study. The information of the interviews is presented as a short case study. For this supplementation in the form of interviews and case studies is chosen since it enables us to investigate a “contemporary phenomenon within its real- life context” (Cooper and Schindler, 2003). While in general the main purpose of a case research is to generate insights that can build theories; this study is not trying to test the model empirically since the group of interviewed firms is too small.

§ 3.7 Sampling design

The target population of this study is composed of consultants having existed in Oldenburg since 1960. The size of this population can not be determined right from the beginning since the necessary data had first to be collected at the Gelbe Seiten archive.

However, some indications about the size of the population of were known by the Chamber of Industry and Commerce in Oldenburg (IHK). According to this secondary information, there are 1266 consultancies registered at the IHK for the region Oldenburg

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(this includes the cities Delmenhorst, Oldenburg, and Wilhelmshaven as well as the communities Ammerland, Cloppenburg, Friesland, Oldenburg, Vechta und Wesermarsch). 368 of these firms are registered at the trade register. The city Oldenburg counts 322 Consultants of which 119 are registered at the trade register (IHK 2006). But since this study is based on the information gathered from the Gelbe Seiten, the numbers from the IHK are widely ignored in the remaining analyses.

The registration at the trade register is obligated for traders and trading companies. Its optional for those who belong to the small trade field. This classification is made by law and is widely based on the annual turnover, invested capital, amount of operations, amount of credits and loans, kind of bookkeeping and the amount of employees17_{. In the} case of the consultants it applies that most of them belong to the second group, the small traders. Additionally, it is important to take into account that there are also a lot of freelancers among the consultants who are not registered at the IHK.

In order to get a sample group for the interviews and surveys, a sequential sampling design is chosen (Cooper and Schindler, 2003). First, 30 firms out of the earlier generated database were chosen, based on the criteria that they had a longer lifetime than five years and that they still operated in 2005 in Oldenburg (Appendix D). Since all of the firms in the database are considered as small- or middle scale firms, a further selection by small- and middles scale firms was not needed before selecting firms for the interviews and surveys. Out of the population of 30 firms, a first sample of 15 firms has been chosen, stratified by their degree of professional appearance (on the websites if existing at all), hits on internet search machines and additional information. By telephone interview, a sub- sample of firms who are interested in a personal interview was chosen.

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§ 3.7.1 Remarks

There are some remarks on case studies. Case studies can be single or multiple-case designs. When no other cases are available for replication, the researcher is limited to single-case designs. For this study, I will employ a multiple case study. The generalization of results from single or multiple designs is according to Yin (1994) made to theory and not to populations. Multiple cases strengthen the results by replicating the pattern-matching, thus increasing confidence in the validity of the theory.

§ 3.8 Limitations

The study is restricted by its definition of consultancy firms (§ 2.1). The definition of consultancy firms is broadly taken. This implies that there might occur errors of coverage and of content (Hanna and Carroll, 2000). Firstly, errors of coverage mean that not all firms fitting to the definition of the population are caught or that some are counted more than once. For instance, the –one of the most important sources were this study is relying on- possibly includes only records of firms of a certain firm size. The same might be true for the registration numbers at the Chamber of Commerce (IHK). Secondly, errors of content refer to the mischaracterization of the firms included in the population.

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CHAPTER 4: CONSULTANCY IN OLDENBURG

FROM 1960 TILL 2004

Throughout this chapter, the outcomes of the analysis of the dynamics in the population of consultants in Oldenburg in the period between 1960- 2004 will be presented.

The data found at the Gelbe Seiten directories between 1960 and 2004 were first compiled in a data set in Excel. In total, this database contains 520 entries of firms, registered in the directories under ‘Wirtschaftsprüfer und Treuhand’ (accountants), ‘Wirtschaftsberater’ (economic consultants) and ‘Unternehmensberater’ (business consultants) and the ‘Ingenieure’ (engineering sector). As discussed in the literature review (§ 2.1), the before mentioned branches show some historical relatedness and intertwinement with consultancy. However, they are too heterogeneous to discuss them as one group. Moreover, each of the three branches performs as discrete variable throughout this study. By this means, it will become obvious since when consultancy proliferates as separate group and if it developed from an engineering, social or other kind of background.

Before zooming in on the description of the data about the three branches, a start off will be made by an introduction about different institutions in Oldenburg which are in different manners relevant for further analyses of the consultant firms.

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§ 4.1.1 Chambers of Commerce (IHK)

The chamber of commerce of Oldenburg is a business network. They represent both a business network and an advocacy group. Their primary goal is to improve the business climate in the region Oldenburg and to provide traders with the right information. Their main tasks are Foreign Trade Promotion, Training and General Services to companies. They also have an advising function. This means that firms must consult the chamber whenever a new law related to industry or commerce is proposed. They also have to keep them up to date about changes in the amount of their employees and the turnover.

The chamber of commerce handles the following definition of the branch consultancy (Wirtschaftszweig 74.14.1):

The branch consultancy covers Management consultancy in the field of Corporate Management, Organization, Marketing/ Distribution, Techniques/ Logistic, Quality management, Controlling and Accounting, Information management/ IT, including management consultancy for agricultural enterprises, run by agro economists.

(Email Thomas IHK, 2006)

§ 4.1.2 Bundesverband Deutscher Unternehmensberatung (BDU)

The Bundesverband Deutscher Unternehmensberatung (BDU) e.V. is a trade association of German consultants. It is the biggest trade association of Management Consultants and personal advisors in Europe. The BDU covers 13000 consultants, organised in 530 firms who are members of the BDU.