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How McKinsey Lost Its Way in South Africa

How McKinsey Lost Its Way in South Africa


Even so, by examining government records, along with McKinsey publications and other company documents, The Times found that the firm shapes everything from education, transportation, energy and medical care to the restructuring of economies and the fighting of wars.

McKinsey’s clients include sovereign wealth funds worth more than a trillion dollars, as well as what one marketing brochure describes as “defense ministries, military forces, police forces and justice ministries in 15 countries,” where the company consults on such matters as the maintenance and support of “armored personnel carriers; minesweepers, destroyers and submarines; and fast jets and transport aircraft.”

McKinsey “is a hidden, unaccountable power that has a prestigious face,” said Janine R. Wedel, a professor at George Mason University who has written extensively on what she calls “the shadow elite.” She added, “Think of them as a repository of the most intimate information that governments and others have, from what they are investing in to who wields influence.”

McKinsey refused to work in South Africa until it embraced democracy in the mid-1990s, but records show that it consults for many authoritarian governments, including the world’s mightiest, China, to a degree unheard of for a foreign company. Late last year, two McKinsey partners spoke at a meeting of the state-controlled conglomerate China Merchants Group that focused on carrying out Communist Party directives. McKinsey is also advising the Saudi crown prince, Mohammed bin Salman, as he seeks to make its economy less reliant on oil.

While confidentiality is necessary in private business, it can become problematic when public money is involved, as in South Africa, or for that matter in the United States, where McKinsey has advised more than 40 federal agencies, including the Federal Bureau of Investigation, the Central Intelligence Agency, the Defense Department and the Food and Drug Administration.

Since President Trump took office, McKinsey has greatly expanded consulting for Immigration and Customs Enforcement through that agency’s office of “detention, compliance and removals.” Their contracts with the agency exceed $20 million. Asked about those contracts, a McKinsey spokesman said the company’s work focused primarily on administration and organization and was unconnected to immigration policy, including the separation of children and parents at the border.

Certainly, consulting firms other than McKinsey keep client lists confidential and work for authoritarian governments. And McKinsey has undeniably been a force for good, through its pro bono work and by helping many organizations become more efficient engines of economic growth. As for the quality of people McKinsey hires, many have gone on to run some of the world’s biggest and most successful companies.



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