CHRISTOPHER D. MCKENNA. The World's Newest Profession: Management Consulting in the Twentieth Century. (Cambridge Studies in the Management of Global Enterprise.) New York: Cambridge University Press. 2006. Pp. xxi, 370. $30.00

Abstract

The title of Christopher D. McKenna's book suggests a send-up. But readers expecting this book to lampoon business gurus as prostitutes are in for a disappointment. McKenna does show that, just as cynics believe, consultants have often sold their chastity. He hopes, however, that management consultants will adopt professional standards and begin to protect their virtue. The virtue of consultants lies in their offering an inexpensive means of transferring knowledge. McKenna draws on economic theory to argue that corporations' transaction costs for buying knowledge from outside consultants are often less than the cost of acquiring it through their own managers' experiential learning. He demonstrates consultants' economic utility with a detailed account of how they supplied Lukens Steel with vital strategic knowledge at relatively low cost in the middle decades of the twentieth century. America's anti-trust laws make consulting a legally less problematic way of transferring knowledge than interfirm cooperation. McKenna superbly shows how the legal defeat of Franklin D. Roosevelt's National Recovery Administration and its implicit vision of an associative, corporatist state was a triumph for management consulting. Moreover, by mid-century the Truman administration tilted toward buying knowledge from external consultants rather than developing knowledge internally in the civil service, launching today's “contractor state.”