This document summarizes and critiques a management consulting project conducted at a chemical plant. The consulting firm conducted an employee opinion survey and evaluated managers. However, their methodology for evaluating managers was flawed and superficial. They interviewed each manager's only two direct supervisors but did not interview subordinates or peers. Their evaluations of managers differed from the supervisors' assessments and seemed based more on subjective impressions than facts. They recommended demoting or transferring most managers, despite the plant's success. The plant manager believed implementing the recommendations would cause an exodus of talented staff. He disagreed with the report's biases and lack of consideration for technical competence. The president agreed and did not implement the recommendations. Subsequent events confirmed this was the right decision.

1. DONALD C. MOSLEY
Professional
Ethics and
Competence
in
Management
Consulting
may well become known as the decade when the profession of management consulting reached maturity. Today, more than ever before, the businessman is turning to management
consulting firms and to individual management consultants to help solve increasingly difficult technological, organizational, and personnel problems.
Moreover, the consultants are being called on not
only for recommendations regarding problem areas
but also for help in decisions aflFecting the future
destiny of the firm, decisions concerning diversification, mergers and acquisitions, and the exploitation
of international opportunities.
Many U.S. firms have benefited greatly by using
management consultants. The continued use of consultants is testimony that an expert from outside the
organization can provide progressive recommendations and initiate needed changes that an equally
competent inside expert cannot.
At my university as a result of our consulting activities, we have worked with a number of companies, primarily branch plants of large corporations
which were having problems and with familyowned companies which were suffering growing
pains. We have also gleaned insights into how others in the field operate, and from our frame of reference the techniques of some management consultants are disturbing.
Since my field of interest is organizational theory,
personnel, and industrial relations, my analysis will
be confined to this broad area of management consulting. Within this broad area I have encountered
what in my judgment are three clear-cut cases of
unethical behavior or incompetence within the past
year. In all three of these cases the consultants demonstrated the following similar characteristics in
their consulting work:
THE 196O'S
I / T h e y were not fly-by-night types but full-time
professionals, two of them having Ph.D. degrees in industrial psychology. Moreover one heads a firm which
maintains oflBces in some of the major cities of the
world.
2 / Through their evaluation of managers they played
the role of God in such a wholesale manner that they
put the late Douglas McGregor's autocratic manager of
traditional performance appraisal to shame.
3 / Apparently all three consultants believe they are
qualified and omnipotent to forecast future career performance of managers at all levels. In fact, one of the
consultants has been quoted in a major publication as
saying he can determine a rough measure of a manager's ability after an hour and a half interview.
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2. In two of the cases top management accepted the
recommendations and have either implemented
them or are in the process of attempting to implement them.^ Fortunately, the third company had a
top management which recognized that the consulting firm focused on psychological aspects and
seemed to ignore other aspects of running a business. They quickly concluded that the recommendations were questionable and that to implement them
would cause more problems than it would solve.
The experience of this company serves as the basis
for making the case against unethical behavior or
incompetence.
A brief survey of the literature relating to management consulting initially revealed a seeming
paucity of concern with the problem dealt vidth in
this case. A more thorough survey did reveal a few
writers who touched on the problem although their
primary focus was on other aspects of consulting.
However, considerable support for my thesis occurs
in a not too unlikely source—Vance Packard's book
The Naked Society.
Although the book contains a number of illustrations raising the question of ethical behavior on the
part of management as well as consultants, the following excerpts present the problem most incisively.
The harshest words yet addressed to the multitude of
psychologists who work for management's assessing men
on the job and screening applicants came from Dr. Jay
L. Otis, director of the Psychological Research Service
at Western Reserve and one-time president of the Division of Consulting Psychology of die American Psychological Association. Dr. Otis kindly supplied me with a
copy of the scalding remarks he addressed to his colleagues a few years ago on the occasion of turning over
his presidential gavel. His talk was entitled "Psychological Espionage." He said he chose that title because the
trend in consulting work had made him pause and
wonder. The phrase "psychological espionage," he
conceded, "is not a nice phrase; yet it does characterize
some of the work we are doing and describes the attitude of some of our examinees and clients towards us."
He observed: "We are professional practitioners with
very complicated professional obligations."
He singled out aspects of the work done by psychological consultants when working for industry that were of
particular concern to the conscientious professional:
1 / The use of disguised tests.
2 / T h e role of the psychologist in making attitude
surveys. . . .
3 / The dual role of serving an industrial firm and
serving the individual. . . . "I wonder how infallible we
think we are when we make a recommendation, after a
SPRING / 1970 / VOL. XII / NO. 3
day or two of observation, that may affect the lifetime
career of an employee."^
A Study: XYZ Chemical Corporation
The XYZ Ghemical Gorporation is a mediumsized, growing company with branch plants located
throughout the country.^ Because of its technology
the company hires large numbers of engineers and
scientists, many of them having advanced degrees.
The plant we are concerned with is located in the
mid-south, is approximately three years old, and is
involved in a highly technical process of production. This process is so complex that only one other
company in America has perfected it. The home office is located in a large metropohtan area outside
the South.
The company decided to use the consulting firm
after the president heard the head of the firm make
a speech. Among other things, in his speech the
consultant discussed the problem of unions, pointing out that his firm had chalked up many successes
in helping companies keep imions from getting in or
in getting them out once they were in. The secret
he said was to find out where a company's problem
areas were and then take the necessary steps to
eliminate the problems. This job could be accomplished by the consulting firm conducting an opinion survey, the results of which would then be used
not only in coping with unions but in helping the
company in other vital areas as well.
Although most of the plants of the XYZ Gorporation are unionized, it is apparent top management
would prefer not to have umions. With the exception of maintenance employees, workers in the
mid-south plant are not unionized; however, they
are paid union wages. The philosophy of the plant
manager is not to concentrate on keeping the union
out but rather to treat people equitably whether
tliere is a union or not. The maintenance employees
in the plant were organized in the first year of the
plant's operation when there were severe technical
problems, diflScult working conditions, and inexperienced men and leaders.
At any rate the decision was made to hire the
consulting firm to conduct an opinion poll in two
Donald C. Mosley is Professor and Chairman
of the Management Department of Mississippi
State University. He has gained experience
as adviser to management of a large firm.
45

3. mid-south plants of the XYZ Corporation. A fiveman team, headed by the firm's owner, an industrial
psychologist, came into the plant and spent a total
of four days conducting the opinion survey. The
consulting fee was $15,000.
Consulting Firm's Methodology,
Findings, and Recommendations
Organization of the Report. The output of the consulting project was a bound, typewritten report divided into the following categories:
1 / The first section presented a summary of the findings.
A. It stated the morale of eight different
groups ranging from management to production and
maintenance employees.
B. It listed favorable features including such
things as lighting, overtime, the personnel department,
job security, and the vacation plan.
C. It listed unfavorable features including
such things as dust and fumes, seniority, training,
safety, treatment of men by foremen, pay, communication, and benefits, as well as performance reviews vWth
supervisors.
D. It presented the role of middle management and supervision in determining plant morale.
1. This sub-section gave a description of
first level, middle, and top managers who were considered possible sources of trouble.
2. The second section presented recommendations classified as those for immediate action and
those for longer-term action.
a. In addition to making recommendations regarding pay, policies, benefits, and working
conditions, the report recommended personnel changes,
especially of managers who were considered possible
sources of trouble.
2 / The concluding section dealt with the outlook for
union organization.
A. It concluded that if the company adopted
the firm's recommendations, it could defeat the union
among the production employees if the election could
be forestalled for two months.
B. In addition it concluded that morale of the
maintenance personnel was so low "that the likelihood
is poor that the union can be decertified under present
conditions." However, the firni did suggest that if the
recommended changes in working conditions and supervision were effected, "it is possible that within a year
morale can be improved to the point where the company might have a chance to win a decertification election."
Under separate cover individual performance appraisals were provided on every supervisor and
manager within the plant. These included a listing
46
of strengths and weaknesses and an interpretation
of the findings. The interpretations included an assessment of present performances, an assessment of
probable future performance, and finally, a recommendation that the manager be promoted, demoted,
transferred to a staff position, or retained at his
present level.
Methodology
Tliere were two distinct methodologies used in
arriving at conclusions. One approach was utilized
with operative, supervisory, and professional employees. A different approach was used in evaluating performance of managers. The first approach
utilized opinion survey questionnaires, administered
to all employees, followed by patterned interviews
conducted with selected operators, supervisors, and
engineers.
Since our quarrel is primarily with evaluation of
managers, attention will be directed to this area.
Like the operative, supervisory, and professional
groups, all managers completed opinion questionnaires. Beyond this step, however, an entirely different methodology was utilized to determine present and potential future managerial effectiveness.
This methodology included interviews with a
manager's immediate superior and the immediate
superior's boss. The two superiors were asked to
give an overall appraisal and to indicate the principal strengths and weaknesses of the subordinate.
The consultant then made an interpretation of the
interview results. In several cases the interviews
were supplemented by the consultants' observations
based on their contacts with the managers and in
one case by follow-up interviews with subordinates.
Results
From a morale standpoint the plant had a good
rating. Out of seven groups, four were judged as
having good morale, two fair, and only one poor. In
contradiction of these judgments the plant was evaluated as having an ineffective managerial team. According to the consultants' appraisal, only one of
ten middle and top managers—excluding the plant
manager and first line supervisors—was rated as
being promotable to a higher level position. It was
recommended that four managers be transferred
out of line positions and into staff or technical posiCalifornia Management Review

4. tions without supervisory or administrative duties
and that one manager be demoted to the level of
foreman or machinist. In short, out of ten managers
above the level of supervisor, five were considered
incompetents who should either be transferred or
demoted.
Critique
If the moral question of conducting an opinion
survey with the primary objective of preventing or
removing a union could be ignored, it would be
hard to criticize opinion surveys per se. Rensis Likert has demonstrated the importance of measuring
variables which affect organization health and performance provided the job is done by experts.*
With one qualification the opinion survey covering
operative, supervisory, and professional employees
was worthwhile for the company and above average
for an opinion or attitude survey. The qualification
is that it appeared to be slanted toward weaknesses.
The charge of management quackery arises as a
result of the consultants' wholesale appraisal of all
managers above the supervisory level and the incorporation of these findings with those of the opinion
survey at the operative level. More specifically, the
consultants' manner of determining strengths and
weaknesses of managers reveals glaring omissions
and deficiencies, some of which are as follows:
• An incomplete picture was obtained of managerial
strengths and weaknesses in that only two superiors
were interviewed. Interviews with the manager's subordinates and co-laterals were not made. In fact, in
only one case were subordinate interviews considered
in the appraisal.
• In nine out of ten cases the consultants' appraisal
dijffered from the consensus of the two superiors. For
example, in one case the two superiors stated that a
man was performing very well and exceeding or meeting expectations and was now promotable to the next
higher level. The consultant's conclusion was that "he
is well qualified for his present responsibilities but is
not equally well suited to higher level duties."
• Related to the above, the appraisal interpretations
seemed to be based on "psychological" interpretations
and the consultant's impression rather than on what
was actually said by superiors. Moreover there were
inconsistencies in shifting the final report. For example,
several managers who were rated very high in the
opinion polls were downgraded in the final report.
• The plant was concluded to have an ineffective management team; yet a most important criterion was omit-
SPRING / 1970 / VOL. XII / NO. 3
ted in reaching this conclusion. From a results standpoint, the plant has succeeded in profitably developing
a production process where three competitors have
failed. That these results were achieved under difficult
circumstances was ignored. For the most part workers
with farm backgrounds were successfully trained as mechanics and chemical workers. At the present time the
results of the plant operations are exceeding company
expectations and targets.
• Finally, and the most shocking aspect of the entire report, was the glib manner in which the consultants
played God with the careers of professional managers.
For example, in evaluating one key manager the consultants concluded that although he was doing a fine job in
his present position, he should not be promoted to higher
level because the increased pressure might cause him
to become an alcoholic. The manager's two immediate
superiors—one being the plant manager and the second
a vice-president—had not mentioned anything about a
drinking problem in their intei-views. The plant manager
was quite dismayed when he discovered the consultant
reached the potential alcoholic conclusion upon hearing
office talk that the manager in question had become
slightly inebriated at one cocktail party he had attended.
If the top management of the XYZ Company had
been the type who believe when you call in outside
experts for $15,000—then you should follow their
advice—the following events would probably have
happened. Ten managers would have been written
off for future promotions. Five would have been
written oflE as complete failures as managers. The
plant manager's opinion is that when word filtered
down through the grape-vine, this plant would have
had an exodus not only of managers but also of
professional engineers and scientists.
Indicative of the plant manager's reaction to the
report are these excerpts from a letter to the President of the Corporation:
I loould be doing ijoti a disservice if I were not to
he candid and give you my true feelings about the
quality and nature of the survey. In general the recommendations made by the consulting firm indicate
a very serious bias aimed only at fighting unknowns. They apparently are not qualified to evaluate the overall operation of a chemical plant. If one
were to take the survey seriously, he would have to
take tlie position that a very incompetent job ivas
done in selecting key people for staffing the plant.
Their evaluation of our staff and recommendations,
if taken seriously, would mean that toe should
remove or consider non-promotable most of our
key people. No constructive ideas are advanced regarding the fact that individual toeaknesses should
47

5. be compensated for by building a team, by choosing subordinates strong in tlie areas of deficiency.
The consulting firm apparently wasn't experienced enough in industrial life to point out that the
same team they so easily damned is the one that
very successfully tuned up a complex plant which
had more than its share of technical and mechanical
problems to solve under very adverse working conditions. Further, this job was done by taking virtual
field hands and backyard mechanics as raw material.
The report in essence recommends that we
choose personnel whose prime purpose in life is to
keep employees happy. In fact, we should make life
truly perfect by improving all economic benefits
and make this truly a wonderful plant, working simply because a poll of our employees so indicated.
Apparently technical com.petence, cost saving attributes, and the many other facets to a man's character which are needed to run a competitive chemical operation are not important. I say this because
the report further states in essence that I do not
have competent or promotable people.
Actually the record shows that a very competent
job was done, contrary to the implication of the report.
Fortunately, the president of the corporation
agreed with the plant manager that the consultants'
report was a distortion of the true situation and the
report would go no further than their respective
desks. Later events have confirmed the wisdom of
the president's decision.
The consulting firm had indicated that unless the
company followed its suggestion, it would probably
lose any future election covering production employees. The suggestions were not followed—yet
within a year a union election was held and the
union was defeated by a tbree to one ratio. In addition, four managers that the consulting firm had
recommended not promoting were later promoted.
All of these men are either meeting or exceeding
company expectations in their positions of increased
responsibility.
Recommendations and Conclusion
Management in the future will turn more and
more to outside consultants for help in taking advantage of opportunities and in coping with organizational and personnel problems. The profession of
management consulting and the number of consul48
tants in the field will grow in the years ahead and
some people will become wealthy. Until positive action is taken, the profession will continue to attract
more than its share of unethical and incompetent
people.
One action that could be taken is the development of a clearing house for considering charges of
unethical and incompetent consulting practices. The
staff of the clearing house could sub-contract with a
professional standards group, such as the Association of Consulting Management Engineers of the
division of industrial psychology of the American
Psychological Association, to investigate and either
confirm or deny such charges. If the charges were
confirmed, a warning could be issued to the guilty
firm that any further substantiated unethical or incompetent practice would result in widespread publicity being given to the charge.
Of course the above is only a general idea and
many details would have to be worked out. However if certain key professional groups, such as the
National Association of Manufacturers, the American Management Association, the Academy of Management, the Society for the Advancement of Management—just to mention a few—were to unite behind such a cause, the problems should not be insurmoimtable. Representatives from the associations
interested could form a committee to initiate the
project and to contact various professional standards associations for support. After tliis step it
should not be difficult to secure funds to finance the
establishment of a management consulting clearing-house.
In the short run, organizations planning to employ management consultants would do well to do
their home work and check with previous clients of
the consulting firm being considered. Certainly the
problem of unethical and incompetent consulting
practices is grave and the hour is late.
REFERENCES
1. Ill-effects are already observable in one of these
companies, primarily in an exodus of capable middlemanagers to other companies.
2. Vance Packard, The Naked Society (New York:
Van Rees, 1966), pp. 96-98.
3. To respect management's request, the company's
actual name is not used. In all other respects the facts
are correct.
4. Rensis Likert, "Measuring Organizational Performance," Harvard Business Review (March-April 1958),
41-51.
California Management Review