McKinsey & Company – Criticism — Wikipedia, the free encyclopedia

13 Jul

In 2010 Rainforest Foundation UK released a report revealing the poor quality of the recommendations McKinsey had given to developing countries on how to reduce deforestation. The NGO pointed out that the company’s work has serious methodological flaws and as a result systematically underestimates the destructive impacts of industrial agriculture while exaggerating those of subsistence farming.[42] Adding to this, a Greenpeace investigation brought to light that McKinsey’s advice does not only fail to address some of the main drivers of deforestation such as logging and mining, but that the company’s proposals would actually reward those industries. Greenpeace pointed out that if McKinsey’s recommendations were followed, large-scale monoculture plantations would expand into ecologically important areas.[43] Discussing McKinsey’s decision not to publish the data and assumptions underlying their recommendations, senior personnel at the World Bank has criticized the company’s lack of transparency, noting ‘that the blackbox is a problem for everybody’.[44] Potential conflicts of interests could arise from the fact that if McKinsey’s policy recommendations were implemented, they would heavily benefit industries like logging, mining and paper with whom McKinsey maintains close business relations.[45] McKinsey’s refusal to disclose its business clients has added to those concerns. The firm’s work was subsequently criticized by think tanks and in academic reviews. Researchers from the University College London called attention to the fact that by not considering highly relevant implementation barriers such as forest governance and the costs of enforcement and the installation of sufficient institutional frameworks, McKinsey promotes an overly simplistic view of environmental policy-making.[46] A study by the Stockholm Environment Institute which was granted access to McKinsey’s data set found considerable discrepancies between the company’s estimates of the costs for reducing deforestation rates and those assumed by most renowned scientific models.[47] While the quality of the company’s advice has become a widely discussed question at the World Bank and in United Nations meetings on climate change, McKinsey is reported to continue its work in rainforest nations such as Papua New Guinea (PNG), where the company has ‘refused to comply with PNG laws and register with the Investment Promotion Authority and Internal Revenue Commission’.[48],[49],[50]

Enron was headed by McKinsey alumni and was one of the firm’s biggest clients before its collapse.[51] In particular, McKinsey’s “deep-seated belief that having better talent at all levels is how you outperform your competitors”, a HR program implemented at Enron with McKinsey’s knowledge, resulted, in the opinion of one author, a workplace culture of prima donnas that “took more credit for success than was legitimate, that did not acknowledge responsibility for its failures, that shrewdly sold the rest of us on its genius, and that substituted self-nomination for disciplined management.”[52] Jeff Skilling, sentenced to 24 years in federal prison as the CEO of Enron, was formerly a partner at McKinsey and “loyal alum.”

via McKinsey & Company – Wikipedia, the free encyclopedia.

 

Three firms primarily compete in providing management consulting services to Fortune 500 and large enterprises, consistently recruiting top talent globally from elite colleges, professional schools, and graduate schools: McKinsey & Company, Bain & Company, and The Boston Consulting Group.[25] This top tier of the consulting industry is commonly termed the “MBB” by executive recruiters and industry insiders.[26]

Although these firms compete directly across all major sectors and geographies, each firm possesses its own unique profile that defines its sustainable competitive advantage in the marketplace. McKinsey & Co., on account of its experience, deep board/C-level relationships and scale, is currently a strong player in general strategy, financial services, operations and IT. McKinsey holds the highest market share among the firms globally with geographic strength across the Americas, Europe and Asia. BCG displays competitive strength in general strategy and holds the second-highest market share globally after McKinsey. Bain & Co. is the strongest player in the PE/LBO space, servicing most major private investment firms globally.

 

 

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