Information asymmetry in process consultation

Abstract

Purpose – The purpose of this paper is to revisit Schein’s proposed process-consultation approach as a general framework for management consulting in the light of some premises of the agency theory, namely the behavior induced by the asymmetry of information between the principal (leader-client) and the agent (consultant). Design/methodology/approach – Empirical research consisted of an in-depth, qualitative and phenomenological analysis of 13 cases of organizational intervention based on the practice of four senior consultants in a Canadian management consulting firm whose philosophy is based on organizational development principles and practices. All the cases chosen are characterized by a situation of strategic change as a result of governmental reforms in the healthcare sector between 2005 and 2008. Findings – Overall, the study shows that the relationship between leaders-clients and consultants varies from one stage to another throughout the consultation process and that the information asymmetry does not always benefit the agent as stated in the agency theory. The consultants are required to play diverse roles, either in combination or alternation, during the consultation process; the facilitator’s role, stated as the more efficient role in Schein’s perspective and the more altruistic from the point of view of the agency theory, is not necessarily the role preferred by managers. Moreover, results highlight the idiosyncrasies of healthcare organizations, namely the phenomenon of escalating indecision that comes into play during the implementation phase of change, worth taking into account in the practice and theories of management consulting. Practical implications – This analysis raises a number of questions about the general understanding and applicability of the process consultation as defined by Schein. Perhaps the four consultants have not perfectly mastered the interpersonal skills that Schein’s model presupposes. One may also conclude that the model does not always respond to the expectations and needs of leaders and managers and that, for many consultants, it is difficult to adopt only one role model throughout the consulting process. One may also question its realism in a context of interventions in public organizations, with a plurality of interest groups and ambiguity of goals, where governmental reforms are pressuring managers to control costs. Originality/value – According to Eisenhardt (1989) and Hendry (2002), the agency theory offers promising avenues if combined with other theoretical anchors such as the field of organizational behavior. This study scrutinizes the leader-consultant relationship, and more specifically the type of assistance requested by healthcare leaders as they experienced strategic change and how consultants responded to these requests.