Imus Institute

College Department

Management Consultancy
Kriza S. Matro
IV-BSA
Mr. Valmores

CHAPTER 7
STAGES OF MANAGEMENT CONSULTING ENGAGEMENT - PART I

1.

Describe the analytical approach and process as applied to MAS engagement.

2.

Analytical approach and process refers to the systematic, objective and rational
method of solving business problems. It involves a professional-level ability to
ascertain pertinent facts and circumstance, define problem, evaluate the
alternative courses of action and present conclusions and recommendations to
solve the problem.

What are the basic stages of a management consulting engagement?

I.
II.
III.

IV.

Negotiating the engagement

Engagement planning
Conducting a consulting assignment
A. Problem identification and solution
B. Identification of suitable and accurate sources of information
C. Data analysis and diagnosis
D. Solution development
E. Preparation and presentation of the report and recommended
solution
F. Implementation
G. Follow-up evaluation of the implemented solution
Evaluating the engagement and post-engagement follow-up

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3.

What is an MAS proposal letter? What are the content of this letter?

4.

It is an advisable first step in most MAS engagement. It is written communication

between the CPA and the client setting forth the terms and conditions of a
proposed consultancy work.
Its contents generally include:
1. Objectives and benefits of the engagement.
2. Scope of the work and the role of CPA.
3. Approach to the study.
4. Project organization.
5. Fees and billing arrangements.
6. Firm qualifications, where appropriate.

What are the uses of an engagement plan?

a) Provide a means for arranging, distributing and assigning responsibility for
various segments of an engagement.
b) Provide a means of control for determining g whether all segments of the
engagement have in fact been completed.
c) Provide the framework for reporting progress of an engagement.
d) Facilitate time and efficiency control over personnel assigned to the
engagement.
e) Assist in an engagement review by a partner or supervisor.
f) Provide the basis for estimating fees.

5.

Give the advantages of preparing a proposal letter.

It minimizes misunderstanding between the CPA and the client.

It assists in better administration of the engagement.

6.
What are the factors that should be considered in setting the fee to be charged to
clients?
Nature of the MAS job.
The jobs degree of difficulty and complexity.
Qualifications of the staff required.
Time involved.
Technical importance of the service to the client.

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7.

Define an engagement or work plan.

8.

What are the basic contents of an engagement program?

9.

The objectives and a description of each task to be accomplished.

A description of tangible output required at completion of each task.
A list of manpower required.
A list of the personnel assigned.
The starting and completion dates.
Project costs.

Describe the activities involved in the problem definition phase?

10.

It is an operational plan for conducting a management service engagement and

considered as a blueprint of the remainder of the project.

Identity of the problem.

Objectives of the problem-solving process.
Scope of the problem.
Intensity of the problem
Time dimensions of the problem
Location of the problem
Human elements involved in the problem
Support systems surrounding the problem
Tracking systems related to the problem
Institutional process for managing the problem

What are the data-gathering techniques available to a management consultant?

Interviews
Questionnaires
Observation
Document gathering
Charting
Organization chart
Data flow diagram
System outflow
Detail flowchart
Decision table

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11.
Give 5 internal sources of data and the corresponding data that may be obtained from
such.

Sources
Corporate planning
Engineering
Research and development
Manufacturing
Accounting

Facts
-Corporate objectives
-Expansion plans
-Engineering schedule for products
-New product development schedules
-Inventory status
-Product pricing and costing
-Operating expenses

12.
Describe the 4 approaches that a consultant may use in analyzing facts gathered in
relation to the problem at hand.

13.

Decision-Level Analysis has the purpose of depicting the varied

interrelationships among the decisions made throughout the segments and
levels of organization.
Input/output Analysis problem situation is analyzed in terms of its inputs and
outputs.
Structured Analysis organization is comprised of a number of well-defined
functions, which in turn are made up of a group of activities.
Less-Structured Analysis could be employed to a counteract some limitations
of the structured approaches such as (1) difficulty in application and (2) stifling of
creativity of the consultant.

Explain briefly the steps in the problem-solving process.

Problem identification and desired outcome begins with initial recognition of a

symptoms pointing to the problem and ends with the complete problem
description.
Identification of suitable and accurate sources of information and data-gathering
- deals with fact sources and identifies places where the consultant can look to
find facts associated with the operation of a client.
Data analysis and Diagnosis consultant needs to apply a variety of fact analysis
techniques to determine the effectiveness of each decision made.
Solution selection
Preparation and presentation of the report and recommended solution
Implementation of recommended solution
Follow-up evaluation of the implemented solution

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14.

Give 5 external sources of data the kind of information that may be drawn for them.

Sources
Industry reports
Competition
Distributors
Customers
Data base retrieval systems

15.

Discuss briefly (at least 5) most commonly used techniques in gathering facts.

16.

Facts
-Corporate data and analysis
-Industry news
-Products
-Products literature
-Market conditions
-Customer Analysis
-Profile facts
-Sales
-Product, market and industry news and
analysis
-Economic forecasts

Interviews considered the best way to zero in on problems. It can be

conducted at all levels of the organizations.
Questionnaires restricts channel of communications and should be used with
great care for the purpose of fact finding.
Observation useful in gathering facts prior to an interview, in verifying
statements made during an interview, and in ascertaining relationships between
individuals.
Document gathering collect all relevant documents to gain an understanding
of what is presently done and how it is organized, what is not available, and
perhaps what the client considers being important.
Charting fact gathering that provides a pictorial representation of a dimensions
of the clients organization or of its activities.

Describe the following approaches to analysis:

Decision-Level Analysis has the purpose of depicting the varied

interrelationships among the decisions made throughout the segments and
levels of organization.
Input/output Analysis problem situation is analyzed in terms of its inputs and
outputs.
Structured Analysis organization is comprised of a number of well-defined
functions, which in turn are made up of a group of activities.

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17.

Less-Structured Analysis could be employed to a counteract some limitations

of the structured approaches such as (1) difficulty in application and (2) stifling of
creativity of the consultant.

Discuss briefly the following analysis strategies.

a) Categorization process whereby data, facts or items are sorted into different
groups by virtue of their features.
b) Classification process whereby items are sorted into different groups wherein
defined by external criteria rather than by arbitrary features.
c) Numerical analysis numbers are combined in order to understand how they
relate to each other.
d) Association recognition of two things that are connected in some ways.
e) Correlation recognition that the variation in one variable occurs in step with
that of another.
f) Causation explains correlation. It suggests that two variables are correlated
because there is a cause and effect link between them.

Multiple Choices
1.
2.
3.
4.
5.

D
D
B
D
B

6.
7.
8.
9.
10.

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B
D
D
D
C

11.
12.
13.
14.
15.

D
D
D
D
D

16.
17.
18.
19.
20.

C
D
C
C
A

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CHAPTER 8
STAGES OF MANAGEMENT CONSULTING ENGAGEMENT - PART II
1.
What are the steps involved in the solution development phase of the problemsolving process?
Generation of solution alternatives
Evaluation of solution alternatives
Choice of preferred solution alternative
Detailed development of the selected solution
2.
Give two approaches in generating alternative solutions in an environment of
uncertainty.

3.

SCAMPER Approach: Substitute, Combine, Adjust, Magnify, Put to other uses,

Eliminate and Reverse.
Delphi approach: This employs an idea generation concept similar to brainstorming.
Experts are individually polled for ideas and subsequently summarized and
presented to each participant. Each participant reviews the feedback and the
consultant again polls the experts to establish collective responses and the process is
reported until the responses have stabilized.

What are the activities in the implementation phase of the problem-solving process?

Development of a work plan.

Establishment of controls over implementation activities
Selection and training of needed personnel
Installation of needed physical facilities
Development of standard and documentation
Testing of the solution being implemented
Follow-up and evaluation of the implemented solution

4. Why is there a need to make an evaluation of the implemented solution?

There is a need to make an evaluation of the implemented solution to know if the

implemented solution is operative effectively in the clients business. It is also
needed because users needs change over time and these changes will lead in time to
the need for further improvements. In economic review, it is useful by learning the
reasons for variances in cost. Operation review is evaluated to consider how well
they function with particular emphasis on inputs, error rates, timeliness of outputs,

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and utilization of outputs. And lastly in future performance review, it identifies

potential improvements to the implemented system and estimates the effort
required to implement the improvements.
5.

What is the rationale of conducting a post engagement follow-up?

Usually programs and systems appear to operate effectively during the first few
months of implementation but later run into difficulty because of many reasons like
the change in operating conditions and/or the design may prove to be faulty and
that is the very reason there is post-engagement follow-up. It is the observation of a
CPA to the clients programs and systems that are installed for a sufficient long
period in order to early uncover deficiencies and to make the necessary
modifications.

6.
What are the benefits that may be derived in conducting post-engagement evaluation
and follow-up?
It will provide direction for staff training program in the MAS division.

It will serve as a basis for evaluating on-the-job performance of staff personnel.

It will provide data for determining required resources for subsequent similar
engagements.
It will provide tangible evidence of quality consciousness consistent with the other
areas of a CPAs practice.

The benefit is a post-engagement follow up is the early detection of deficiencies

and also helps in making necessary modifications.
7.
What areas should be covered in conducting an evaluation of the consultancy
engagement?

Proposal
Engagement Program
Work program and schedule
Source data and documentation
Reports
Results

Multiple Choices
1. B
2. D
3. D

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