Opportunities for Management Consultancies Arising from Economic and Monetary Union (EMU)

Abschlussarbeit von Dominik Mathieu

Abstract:

Economic and Monetary Union (EMU) confronts European companies with a number of challenges. Firms have to adjust many of their business operations to the new environment. The changeover requires a substantial amount of knowledge and additional resources - a reason why some companies turn to help from the outside. Eventually, this external help very often manifests itself in the form of management consultancies.

The aim of this study was to analyze business opportunities for management consultancies as a result from the impact of EMU on European companies. This includes the identification and evaluation of opportunities in the past, present and future.

Particular efforts were made to understand the relationship between the two areas of EMU and management consulting. Besides investigating secondary sources this also included a research process using in-depth interviews with consulting companies and clients alike in order to gather primary data.

Table of Contents:

1.	Introduction	1
2.	Methodology	4
2.1	Secondary Sources of Information	4
2.2	The Primary Research Process	5
2.3	The Interviews	6
2.4	Quality Issues
	Part One - A Chronicle of European Economic and Monetary Union	12
3.	The 30 Years of European Economic and Monetary Integration	13
3.1	Planning and Preparing EMU	13
3.1.1	Treaty of Rome	13
3.1.2	The Werner Report	13
3.1.3	The European Unit of Account (EUA)	14
3.1.4	The European Monetary System (EMS)	15
3.1.5	The Delors Report	15
3.2	The Three Stages of Economic and Monetary Union	16
3.2.1	The First Stage of EMU	16
3.2.2	Maastricht Treaty	16
3.2.3	Stage Two of EMU	16
3.2.4	The Comission's Green Paper on Practical Arrangements	17
3.2.5	The Transition to the Single Currency	17
3.2.6	Stage Three of EMU and Phase B	17
3.2.7	Phase C - The Final and Remaining Step	18
3.3	The Period of Focus	19
	Part Two - The Impact of EMU on European Companies	20
4.	The Effect of EMU on Business Operations	21
4.1	Impact on Accounting and IT Systems	21
4.2	Legal Framework	23
4.3	Marketing Related Issues	25
4.4	Strategy and Organisation	27
4.5	Human Resource and Personnel	29
5.	The Causes, the Scale and the Nature of the Change	31
5.1	The Causes of Change	31
5.2	The Scale and the Size of Change	34
5.2.1	The Perceived Impact of the Euro	34
5.2.2	Factors Affecting the Scale of Change	35
5.2.3	Determining the Scale	36
5.3	The Nature of Change	38
	Part Three - Opportunities for the Management Consulting Industry	42
6.	The Theoretical Necessity for Management Consultancy in the Context of EMU	43
6.1	The Consultant's Role in the Change Process	43
6.2	Scale and Nature of Change Affecting the Need for a Consultant	46
6.3	Reasons for External Consultants	47
6.3.1	Knowledge and Expertise	47
6.3.2	Time & Personnel Constraints	48
6.3.3	Efficiency Reasons	48
7.	The Views of Potential Clients and Management Consultants	50
7.1	Views of the Role of the Consultant	50
7.1.1	The Contrast Between Consultants and Potential Clients	50
7.1.2	Different Views Because of Industry, Size and Operational Radius	52
7.2	Views of Reasons for Management Consultancy	52
7.2.1	Views of Potential Clients	52
7.2.2	Views of Management Consultancies	54
7.3	The Causes of Different Views	54
8.	Identification and Evaluation of Genuine Opportunitites	57
8.1	The Type of Consultancy Required	57
8.2	The Opportunities over Time	58
8.2.1	State of Preparedness	59
8.2.2	Industrial Demand Cycles	63
8.2.3	The Effect of EMU on the Revenues of Consultancies	66
8.3	Competition for Market Share of Opportunities	67
8.3.1	Competitors from Outside the Industry	68
8.3.2	Competition within the Industry	68
9.	Conclusions and Recommendations	71
9.1	Conclusions	71
9.2	Recommendations	73
	Appendices
A.	Interviewees and Company Profiles
B.	Typical Interview Questionnaire used for Potential Clients
C.	Typical Interview Questionnaire used for Consultancies
D.	Map of the European Union showing the Eurozone
E.	Letter of Siemens Regarding Changeover to the Euro
F.	KPMG Consulting's Index of Vulnerability