Comparison of External Business Consultancy and Internal Manager for Problem Solving in Organizations

This report compares the advantages and challenges of using external business consultancy and internal manager for problem solving in organizations. It discusses the key roles and pros and cons of both alternatives, including factors such as independence, owned resources, cost effectiveness, in-depth knowledge of organizational culture, and availability of competencies and resources. The suitability of each alternative depends on factors such as the size and complexity of the business.

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5/13/2019

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Business Project
In an organization, various functional areas and job roles have to be managed effectively
for a successful business. There are development and identification of various issues and
problems that needs to be effective and structurally managed in order to maintain harmony and
an ongoing process in an organization (Liedtka & Ogilivie, 2011). The problem solving in
business is a crucial aspect that has to be done efficiently for which the business has two key
alternatives that are to go for an external business consultant or internal manager of the company.
The manager of the company or external consultant either conducts not only the problem solving
but also other consulting or advisory activities. The report will consider the comparison of the
two alternatives while understanding the key roles of both the stakeholders and their pros and
cons for the organization (Abdulraheem Sal, 2016).
An external business consultant is a separate organization working for the company as its
clients to conduct an evaluation or develop the design of evaluation to provide an effective
solution to the company after detailed research. For instance, an organization is contracting with
an external organization with an objective of conducting research and evaluates a specific
problem faced by the business or any product development or business development advice
needed by the company. The organization is an expert for this job as the company is working
professionally and will provide a solution after researching reliable information and analysis
(Anitha, 2019).
Key advantages of using external consultancy are firstly independent body, this reflects
that the consultant is an organization that is specifically working for the particular aspect. The
company seems to be independent and doesn’t engage in any other work as a manager in an

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organization. Secondly owned resources, this reflects that the company is an advantage as the
external business consultant is using their own capital and human resources in order to conduct
research, evaluation, and planning of the problem solving (Shuck, 2014). For example, if an
organization is facing a problem regarding the recruitment and staffing of employees and
contract with an HR consultancy for the recruitment process instead of the HR manager of the
company. They would be an expert in analyzing human resource, assess the application and
select the best employees for the company. This will save organization resources and efforts like
the area to conduct an interview, screening of the application, shortlisting, and selection
(leadershipcenter, 2018).
However, some of the disadvantages for the external business consultancy would cost to
the company. The job or work that could have been conducting using internal sources for the
organization paying additional pay to the external organization could become expensive for the
company. It has also been identified that the external consultancy is also providing expert service
for which they ask for premium prices by the organization, which overall increase the company
expenses to a greater extent. Another challenge with external business consultancy is effective
communication and integration or work with the company (Bruggeman & Baerdemaeker, 2015).
For example, if an external business consultancy is considered for providing training to the set of
employees. The training program prepared and provided by the consultant would also include
understanding the need for the training, culture of the organization that will be followed by an
external consultant as well. This is not only time consuming but can be challenging to integrate
with the company’s objectives. This may lead to mismanaged and unorganized activities in the
organization, especially in the case of misinterpreted objectives and goals of the company (Zhao,
2016).

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On the contrary, the internal manager for the role of various function in the organization
like research and problem solving. The internal manager is playing various roles in an
organization as and also playing the role of consultant as well (Recker, 2013). For instance, in
the example taken previously for the purpose of recruitment and selection; all the activities
conducted in this job would include all the stages to be processed by HR manager of the
company while using internal human resources and other resources required to process. When
compared to external business consultancy an internal manager has various advantages and
disadvantages. The key advantages for an organization using an internal manager for consulting
purpose include in-depth knowledge of organizational culture and needs. It can be said that the
manager is working in an organization since a long time and are well awarded about the
organizational policies, rule, and strategies, which has to be adhered while working on that
particular project. Moreover, the internal manager instead of an external organization can easily
identify the needs or problem cause (Kaynak, 2018). Another major advantage could be cost
effectiveness. As compared to an external consultant, the internal manager is not paid any
additional cost to complete the problem solving or that particular project. Moreover, the
organization would optimally utilize the competencies available within an organization (Bradler,
2016).
On the contrary, the key challenges or cons identified for the internal manager would
include unavailability of required competencies or expertise. In case the internal manager
considers the project, it is not always necessary for the company to have all the competencies
required to perform the specific function (Bailey, 2018). Even if the competencies are found to
be existing in the organization, the employees are not the expertise to perform that particular
function, as internal manager has various roles and doing various jobs therefore expert in a

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particular aspect is not available with the organization (Caillier, 2014). This can make the result
or solution less reliable. Another major con for an internal manager, when compared to external
business consultancy, is the use of organizational resources. The resources of the organization
are to be distributed in various functional areas, and if the resources are engaged in a particular
project then the problem could arise of lack of resources. These resources are either to be
purchased or leased for the purpose of this project. Another disadvantage would Inattentive
function. This includes the functions that the internal manager is unable to consider to perform
due to overly engaged in this particular project (Ford, 2017).
For example, in case the digital training program is to be conducted for which the internal
manager would be considered to perform. There would be a requirement of various
organizational resources like training area, learning materials, and other such resources.
Moreover, if an HR manager is considering the training program and engaged in that, the
possibility of other job is possible like in case there is an issue raised in the organization, let us
say employee’s conflict ( Loeb & Grissom, 2011). In such cases, the HR manager either needs to
pause the training program or would not be able to handle the key issues identified. When
compared to external consultancy, the HR manager can focus on more important aspects to be
considered and the training program would side by side conduct with ease (Procter, 2014).
After analyzing both alternatives, it can be said that the suitability depends on various
other factors in an organization like the size and complexity of the business. In the case of a large
organization with complex business functions, the recommended alternative would be external
business consultancy ( Ipsen & Nielsen, 2017). The reason being the internal manager would be
able to handle other key issues in the organization instead of a particular project. Whereas in the
case of small business, internal manage would be appropriate for this purpose. The reason being

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the company would not prefer to increase the cost to greater extends for any particular problem
solving or project (Pansari & Kumar, 2016).
From the discussion, it can be concluded that the business has two key alternatives that
are to go for an external business consultant or internal manager of the company for various
purposes like problem solving, research, a specific project or program planning and execution.
Both alternatives have their own advantages and challenges. Key advantages of using external
consultancy are firstly independent body, owned resources, and organization is an expert for this
job as the company is working professionally and will provide a solution after researching
reliable information and analysis. The key advantages for an organization using internal
manager for consulting purpose include in depth knowledge of organizational culture and needs,
and cost effectiveness. There are challenges for both alternatives as if for external consultant key
disadvantage is increased the cost to the company and challenging integration of both
organization and may lead to conflicts. On the other hand, the internal manager for this purpose
lack at expertise, or availability of required resources and competencies.

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