Abstract: Circulation of Management Knowledge: The Role of Strategic Consulting in Portugal in the Early 1970s

Álvaro Ferreira da Silva

Abstract

Strategic consulting firms like McKinsey exerted a critical role on the circulation of management knowledge across different European firms after the late 1950s. This paper tries to understand the role of consulting firms as knowledge brokers, focusing on the contribution of McKinsey to reshape the organizational structure and business practices of CUF, at the time the largest Portuguese and Iberian business group. It concludes that the multidivisional form is sufficiently plastic to be applied to structural reorganizations in different "systemic contexts" and with discrete firm characteristics. This plasticity may create completely diverse organizational configurations, which I think have not been fully recognized until now. Secondly, the literature on the diffusion of the multidivisional organization has almost a fetishist fixation on organization structure, paying much less attention to the business processes that support it (market-driven, management by objectives, introduction of management accounting and control). The "systemic context" still plays a critical role in the circulation and adaptation of new management ideas. The weakness of managerial capabilities frustrates the easy adoption of those business processes, despite the attempts to use management consulting as a substitute for the inexistence of formal executive education.