Case Study $6$: When a Contract Is Not Enough

Margaret DiCocco

Matthew J$.$ Borneman

Read the case below and consider the following questions:

$1.$ One could say that this particular consulting relationship was heading toward trouble from the start. What could the consultants have done differently to avoid the problem encounter once the contract was in place?

$2.$ When the client pushed for the consultants to ignore one of the fundamental rights of participants, it became obvious to the consultants that a value conflict had reared its ugly head into this consulting project. How could the consultants have uncovered this potential conflict prior to the shocking exposure during the meeting described at the end of the case scenario?

$3.$ What values of organization development are at risk in this case? How can an OD practitioner promote the values of OD in a consulting engagement like this one?

The Consulting Organization

Deep within America's heartland resides a small, private consulting firm housed within a graduate psychology program. Designed to act as a practicum for graduate students pursuing doctoral degrees in applied psychology, the firm functions as an independent entity within the university. Organization members include a program faculty member as the director and

program students as associates. Students are required to participate in the consulting firm for a minimum of two full academic years. Student members are termed junior associates during their first year, achieving the status of senior associate based on completing the first year and independently leading a consulting project.

This organization is unique in that it is managed primarily by the associates, with the director acting only as an overseer and adviser. Total associate numbers over the years have ranged from $4$ to $12$ members and are generally dependent on the number of students accepted for each class along with the speed at which students move through program requirements.

Most client interest in the firm is generated through word of mouth, but the firm does conduct specific and directed advertising as well. Consulting projects since the firm's inception $(1982)$ have included such tasks as conducting and analyzing focus groups, performing program evaluations, and facilitating a private educational organization in reconstructing its identity to incorporate a research$-$focused agenda, among many others. Project choice is based on a combination of

associate interest, skill level of the associates, and educational value of the project. Project teams consist of a project leader and team members. Consulting projects are generated from clients both inside and outside the university setting.

Consulting Organization Values

Considering the fundamental purpose of the consulting firm is educational growth for its members, one may assume a lack of flexibility within the value framework of the organization. However, because the membership within the firm is transient and the "employment" compulsory for all members, there is a certain degree of fluctuation that can occur within the firm's value structure from project to project and semester to semester. The standard values that do not change are

$1.$ All decisions pertaining to the consulting aspects of the firm are made by the associates within a democratic framework.

$2.$ Quantity of projects should not interfere with the normal matriculation of members through the hosting academic program.

$3.$ All projects utilizing a research framework will adhere to the ethical standards of research practice.

Negotiating a Contract

One of the benefits to clients in hiring this particular firm for consulting work is the significantly reduced rates charged by the firm. For instance, firm fees at the time of this project consisted of associate hourly billing at $$40$ an hour and staff hourly billing at $$10$ an hour. At the time, these fees represented about half of the going rates for independent consultants at the low end. Hourly rates were kept low to ensure a steady stream of clients for the students' development, as well as being indicative of the nonprofit nature of the firm. However, these savings came with drawbacks in the form of the firm associates' weekly availability, clients' receipt of exclusive attention, and the speed of project completion. Being students, all firm members had other pressing responsibilities to the program and are required to provide only $20$ hours per week to the firm. Furthermore, associates often work on at least three different projects at any given time of the year, meaning that most associates are minimally team members on multiple projects throughout their membership with the firm.

During the negotiation stage of the relationship with a client, project leaders fully disclose the student status of the firm's associates and explain in great detail the time constraints associated with this type of organization structure.

Overview of the Project

The Consulting Team

For this p