The world’s first management consulting firm was founded in 1886 by Arthur Dehon Little who is initially a chemist in the Massachusetts Institution of Technology (MIT). Arthur D. Little pioneered the concept of contracted technology research and his company played key roles in the development of operational research, which is an inter-disciplinary science which uses scientific methods for decision making in complex real-world problems which are concerned with coordination and execution of the operations within an organization.

 

In 1890, a leading British economist Alfred Marshal wrote a book named The Principles of Economics which brings ideas such as: supply and demand, marginal utility and the costs of production into a coherent whole. This book became the domineering economic textbook in England for almost a century.
Although Alfred Marshal firmly believed in the mathematical element in economical studies, he did not want mathematics to overshadow economics. Accordingly, he introduced simplified economical writings understandable by non-experts. He extended economics away from its classical focus on the market economy and instead popularized it as a study of human behavior.

In 1890, Frederick Winslow Taylor was an American engineer who sought to improve industrial efficiency. He is sometimes called “The Father of Scientific Management.” Taylor proposed somehow a matrimonial bond between a trained and qualified management and a cooperative and innovative work-force.

“It is only through enforced standardization of methods, enforced adaption of the best implements and working conditions, and enforced cooperation that this faster work can be assured. And the duty of enforcing the adaption of standards and enforcing this cooperation rests with management alone."
(Taylor, Principles of Scientific Management, cited by Montgomery 1989:229)



In 1899, Harrington Emerson, the 48th governor of Maryland in the US, established a company which is probably the first generalist consulting firm in today’s terms. This company is different from those of his time in that it was not only confined to engineering frameworks as was the general tendency in that period.

 

 


In the early 1900s, Business schools started to emerge as a sign of the new economic awareness to their requirements; for example, the School of Commerce, Accounts, and Finance was founded at New York  University. This is the first large scale business school in the United States. Moreover, Harvard Business School is founded as a "delicate experiment" in the field of professional management training and it became the first university to require a college degree for admission.

 

  

In that same era, many management consulting companies which later on grew to become the main controllers of the market started their operations, such as:  Peat Marwick, Mitchell & Co. started in 1911.
In 1914, Arthur A. Andersen and a partner found an accounting organization which today employs more consultants than any other in the world.

 

Arthur A. Anderson

 

In that same year, Edwin G. Booz graduated from Northwestern and went into business for himself, performing statistical studies for prominent companies in the United States. Booz was a hard-charging individualist, who began to dispense a wide variety of management advice. He also shunned liquor and hated cigarette smoke.

 

 

          


Governments also started to hire individuals and companies to sort out financial and systematic problems for the sake of economic amendments.
In1918, Charles Dawes, a trusted adviser to General Pershing served as a consultant to governments on organizational and budgetary matters. For  example, he spent two weeks sorting out the finances of the debt-ridden Dominican Republic.



Charles Dawes


Many books laying the fundamentals of consulting were published that year and served as primary handbooks in the world of business management later on. In 1909, Frank and Lillian Gilbreth published Bricklaying Systems, discussing their studies of the best motions and processes which could be used to lay brick. This book radically improved the state-of-the-art and began an influential consulting methodology which they applied for decades afterwards. In 1910, H. L. Gantt published Work, Wages and Profits; he became afterwards the father of project management. 

Lillian Gilbreth