The Origins of Modern Management Consulting

In 1993, AT&T spentmore on management consulting services than on corporate research development, AT&T is notalone[8, p. 60]. Wall Street and and analystsexpectbillingsfor consulting services advanceat twice the rate of to corporate revenues over the next decade. Yet, despitethe size, growth,and influence consulting of firms,business historians haveremained uncharacteristically silent aboutthe origins,development, impactof management and consulting, or

"management engineering" was asit known before Second the World War. In this 2 paper, will describe professional I the origins management of consulting firmsat the turnof thecentury anddiscuss why, after slow,gradualgrowththroughthe 1920s, thesefirms took off duringthe 1930s. I argue(1) that historians have wrongly assumed that management consulting arosedirectly out of Taylorism,(2) that engineers,accountants, and lawyers, often supervised merchantbankers, by provided counselthat later became the primary repertoire of management consultants, (3) thatthelegalseparation investment commercial and of and banking in 1933drovetherapidprofessionalization growth management and of consulting duringthe GreatDepression. Recent historiansof scientificmanagement, includingDaniel Nelson, StephenWaring, and JudithMerkle, have tracedthe impact of Taylorismon

contemporary institutions diverse business as as education, public administration, andBritish industry longaftertheProgressive-era for "efficiency" craze ended [29, 36, 26]. The proponents scientific of management, Frederick Taylor, Henry Gantt,
Morris Cooke,FrankandLillian Gilbreth,andHarrington Emerson, consulted with

nearly businesses ways systematize activities theirworkers 200 on to the of through theapplication wageincentives, of time-motion studies, industrial and psychology [29, p. 11]. Naturally then,historians