Management consulting grew with the rise of
management, as a unique field of study. Although Arthur D. Little later became a general management consultancy, it originally specialized in technical research. As Arthur D. Little focused on technical research for the first few years, the first management consultancy was that of
Frederick Winslow Taylor, who in 1893 opened an independent consulting practice in Philadelphia. His business card read "Consulting Engineer – Systematizing Shop Management and Manufacturing Costs a Specialty". By inventing scientific management, also known as "Taylor's method", he invented the first method of organizing work, spawning the careers of many more management consultants. For example, one of Taylor's early collaborators,
Morris Llewellyn Cooke, opened his own management consultancy in 1905. Taylor's method was used worldwide until industry switched to a method invented by
W. Edwards Deming. The initial period of growth in the consulting industry was triggered by the
Glass–Steagall Banking Act in the 1930s, and was driven by demand for advice on finance, strategy and organization. From the 1950s onwards, consultancies expanded their activities considerably in the United States, and also opened offices in Europe and later in Asia and South America. The management consulting firms Stern Stewart,
Marakon Associates, and
Alcar pioneered
value-based management (VBM), or "managing for value", in the 1980s based on the academic work of
Joel Stern, Bill Alberts, and Professor
Alfred Rappaport. The industry experienced significant growth in the 1980s and 1990s, gaining considerable importance in relation to national
gross domestic product. A period of significant growth in the early 1980s was driven by demand for strategy and organization consultancies. The wave of growth in the 1990s was driven by both strategy and information technology advice. In the second half of the 1980s, the big accounting firms entered the IT consulting segment. The then Big Eight, now
Big Four, accounting firms (
PricewaterhouseCoopers,
KPMG,
Ernst & Young and
Deloitte Touche Tohmatsu) had always offered advice in addition to their traditional services, but after the late 1980s these activities became increasingly important in relation to the maturing market of accounting and
auditing. By the mid-1990s these firms had outgrown those service providers focusing on corporate strategy and organization. While three of the Big Four legally divided the different service lines after the
Enron scandal and the ensuing breakdown of Arthur Andersen, they are now back in the consulting business. In 2000, Andersen Consulting broke off from
Arthur Andersen and announced their new name
Accenture. The name change was effective starting January 1, 2001, and Accenture is currently the largest consulting firm in the world in employee headcount. They are publicly traded on the
NYSE with ticker ACN. The industry stagnated in 2001 before recovering after 2003 and then enjoying a period of sustained double-digit annual revenue growth until the
2008 financial crisis. As financial services and government were two of the largest spenders on consulting services, the
2008 financial crisis and the resulting
public sector austerity drives hit consulting revenues hard. In some markets such as the UK there was a recession in the consulting industry, something which had never happened before or since. There has been a gradual recovery in the consulting industry's growth rate in the intervening years, with a current trend towards a clearer segmentation of management consulting firms. In recent years, management consulting firms actively recruit top graduates from
Ivy League universities,
Rhodes Scholars, and students from top MBA programs. == Function ==