Keywords

Consulting Service Use, Sustainable Success, Second Order Confirmatory Factor Analysis.

Introduction & Literature Review

The industrial business has been a strategic industry encouraged by the development master plan of Thailand with sustainable success goals. For the purpose of restructuring the country to the Thailand 4.0 eras, the country’s strategies have been adjusted to ensure economic system outcomes. One of key factors influencing the success of the industrial business is the business consulting professional who should be equipped with knowledge, competence, expertise and experience to ensure efficient analysis, consulting, and management strategy advice. McClelland (cited in Bird, 2019) states the key performance of a business consultant for successful consultation and recommendation is related to competence in strategy planning, relationship management, and production planning. Results of a 2013-2017 survey of 120 consulting service users from industrial business sectors showed that a consulting service is found to be significantly important to an industrial business (SME Confederation, 2019). The survey showed that competitive performance can be encouraged by using business consultants in three important areas: 1) overcoming the limitation of the entrepreneur; 2) decreasing internal conflicts of the entrepreneur; and 3) being influenced by the international and modern knowledge of the consultant. The survey results are consistent with Kang et al. (2018) who point to the important role of the consultant in assisting with organizational development through problem analysis and business development improvement for more efficient. Furthermore, in the same survey, the problems in the use of industrial business consulting service consistently increased for five years (2013-2017). The mean scores of the problems were 7.15, 7.23, 8.27, 9.00 and 9.48, respectively. If the percentage of the mean score increase from 2013 (mean score=7.14) to 2017 (mean score=9.48) is considered, the increase rate is 32.58. Hence, this research aimed at exploring the use of consulting services using guidelines in the industrial business sector to achieve sustainable success.

Research Objectives

1. To analyse the second order confirmatory factor analysis of consulting service using guidelines in industrial business sector to achieve sustainable success

2. To study the consulting service using guidelines in industrial business sector to achieve sustainable success

From the literature review on the use of consulting service retrieved from books, textbooks, handouts and research articles, the following concepts and theoretical principles were employed to test components of the use of consulting service using guidelines in the industrial business sector to achieve sustainable success.

Consultant Characteristics

An organization hires a consultant who can provide knowledge and specialized skills which are necessary for problem solving or organizational management. McClelland (cited in Bird, 2019) mentions that when considering necessary performance, the required characteristics of a professional consultant leading to goal achievement and success are related to the competence in planning strategy and harmonizing management-related aspects, namely, production, knowledge creation and creativity. In addition, Bird (2019) states that a consultant’s performance represents a main role in giving advice based on specific characteristics especially in terms of one’s expertise. With the required performance, the consultant provides a term of reference information, management, project overview monitoring, and coaching which assist the organization or client in autonomous learning and problem solving. Margerison (2017) suggests some necessary skills of an effective consultant. 1) Listening skills: consultants must listen for comprehension to ensure correct practice. Listening skills are similar to communication skills, but listening skills are more related to one-way communication while communication skills require responses from both the sender and the receiver throughout the communication. 2) Communication skills are important since communication is about detailed and sensitive issues. Miscommunication can lead to damaging results when inappropriate tools or methods are used. The consultant mostly uses formal communication methods such as meetings, training, documentation, and reports. 3) Motivational skills are about how a consultant perceives and understands employee behaviour especially the employees working closely with the consultant in order to convince them to work well cooperatively and to be in agreement. 4) Problem-solving skills, problem analysis and identification must accurately be conducted by the consultants, so they must be able to solve the problems with suitable means and tools. 5) Considering consequences importantly, the consultant must make decisions based upon limits of role and responsibility as well as a hiring agreement in order to ensure benefits involving persons and organizations. 6) As consulting work involves working with all levels of employees in the organization, for successful results, the consultant needs to build a good working relationship with the employees and avoid having intraorganizational conflicts. 7) In terms of time management skills, the consultant must be able to effectively manage time for operations in an efficient working schedule.

The above concepts support how McClelland (cited in Bird, 2019) refers to required performance consisting of 1) Knowledge that is core professional knowledge such as professional accounting of accountants, professional legal services of lawyers, professional labour laws, or human resources management officers. 2) Skills refer to being professional which enhance fast, accurate, and achievable operations; particular skills include mass communication skills, language interpretation skills, immediate problem-solving skills, or producing skills by using new technology machinery. 3) Self-concept represents how a person thinks about oneself or has an attitude toward oneself in terms of self-respect, self-esteem in knowledge, competence and morality of oneself, as well as positive mindset. 4) Traits, habits, or familiarities affect behaviour such as being confident, being an extrovert, or being a leader. Positive motive and attitude towards working performance show that the working results are effective and efficient.

Consultant Using Policy

The consultant using policy in this research is in the context of the policy from the hiring organization. Before deciding to use a consultant, an organization must define all service-related policies to get mutual collaboration and to avoid later conflicts. In addition, the policies can be set from an organization’s vision. Two methods of policy setting are mentioned by Bateman et al. (2015): 1) the bottom up method that all vision defining and imposing opinions from all employees via brainstorming meetings are presented to chief executives and based on organization vision imposing guidelines; and 2) the bottom line method that the chief executives use to impose the vision due to their high experience and business insights, business context, competitors, and future expectation, and then all employees are informed; perceptions and understanding from the employees are expected to achieve the vision. After the vision announcement, the executives must closely observe employee behaviour which can be classified into seven behaviour patterns: 1) volunteering with willingness to collaborate with the organization; 2) accepting and willingness to comply with the visions; 3) respecting group decision making; 4) expressing different opinions without opposing ideas from the group or the organization; 5) giving advice; 6) complying with visions with good attitude but having different opinions; and 7) implementing in anticipation of team success as the top priority.

In practice, the consultant using policy is considered from a context of human resources management such as consultant recruiting and selecting policies. For this research, human resources management concepts in terms of personnel recruiting and selecting are studied. Recruiting and selecting processes play important roles since the required personnel must have knowledge, competence, human relations, morality and ethics. Besides performing well, the personnel must avoid making trouble or damaging the good organizational culture, so the recruiting and selecting processes seem difficult as candidates are not known well for their in-depth background, qualifications or characteristics. Therefore, to find the best personnel with required characteristics, recruiting and selecting guidelines are needed. For personnel compensation payment, present payment guidelines comprising two types. The first type is financial compensation such as salary, travel expense, commission compensation and bonus. How to calculate and set the compensation depend on an agreement between an employer and an employee. The second type is non-financial compensation including rewards, honours, canteen benefits, and education (Asch, 2019). As to consultant collaboration policy imposing, Bateman et al. (2015) refer to recruiting and selecting processes which must comply with required qualifications such as knowledge, competence, working behaviour, team working attitudes proposed by a team in order to retain team members and their willingness to co-work for an entire period of operations. The important thing is sharing mutual success without praising any specific person as everyone takes part in the operations with their original ideas and opinions. Proposing and presenting creative challenges and initiatives are the team members’ responsibility to encourage a consistent enthusiastic environment and to prevent boredom from working. Moreover, rewarding an effective team with considerable rewards with suitable value, worthiness, and demand is a motivating means to enhance performance.

Resource Allocation

Resource allocation is how a hiring organization should allocate all resources necessary for consultant operations for the highest profit; mostly, the necessary resources include devices, tools, and facilities. However, the most important is organization data such as existing problem details, customer information, complaints or claims, figures or statistics. Shared valuable data are necessary for accurate analysis. Hence, fundamental knowledge sharing according to Nooshinfard & Nemati-Anaraki (2014) consists of: 1) information technology helping publicize knowledge widely and instantly (Kasemsap, 2018); 2) an interaction which is a basic knowledge sharing concept as the knowledge occurs during the interaction, so relations encouraging exercises with each other are needed for knowledge sharing; and 3) knowledge sharing strategies which should comply with the characteristics of an organizational culture. The organizational culture has specific characteristics, so the operations should comply with the good culture of each organization. For example, informal cultural patterns can be found in a horizontal organizational structure (family-like organizational structure), so knowledge management has no clear patterns, focusing on informal and contextual knowledge sharing which is expectedly effective and beneficial to organizational development. 4) Motivating valuable knowledge creation and publicizing persons bringing benefits to the organization for the overall can be conducted via rewards, knowledge performance indicator evaluations, or promotions. A knowledge sender must ensure that a receiver utilizes the knowledge for the right purpose without being against laws or organizational culture. Likewise, the receiver must trust in the received knowledge for its validity, benefit, and absolute which is not misleading or resulting in negative drawbacks (Subhan, 2019).

The knowledge sharing process explained by Rice et al. (2019) consists of four steps: 1) Initiation, which is the analysis of understanding a knowledge transferring person, knowledge demanding person, knowledge areas on demand, purposes of knowledge optimization, an extent and a level of knowledge optimization, and patterns and methods of knowledge exchanging. 2) Requirement specification is how to select appropriate knowledge sharing methods including knowledge management protocols to match existing knowledge and knowledge users. 3) Implementation is a step of employing shared knowledge; mostly, the knowledge user must know and understand real needs and know how to use it well. For instance, a data analyst needs to know about computer program calculating methods, so the data demanding person must similarly know what is needed exactly in terms of knowledge areas as well as methods. 4) The follow up is about following up and evaluating knowledge, knowledge sources, and implementation in practice. Tang et al. (2019) suggest two knowledge sharing methods: 1) Guidelines of knowledge documenting refer to knowledge sharing via documents, reports or electronic materials. The people involved must individually study the information or data on their own by studying paper work, databases, or ready-made lessons. 2) The method of interaction is sharing knowledge via interacting actions of the sender and the receiver, the creator and the partner, or the giver and the user in exchanging, interpreting and criticizing new knowledge establishment. Some popular means of knowledge sharing are storytelling, community building, knowledge exchanging, coaching, meeting, training, and idea presenting.

Information Technology

The information technology concept is considered an important aspect in the individual, organizational, social and global levels. In terms of consulting service providing, information technology is necessarily utilized for highly effective and efficient profit of both consultant and client. The information system which is claimed by Valacich & Schneider (2015) consists of hardware, software, and communication networks developed to collect, process, and publicize the valuable information benefiting an organizational operation: 1) an input device importing data and instructions into a system: keyboard, computer mouse, touch pad, touch screen; 2) storage devices such as hard disk, removable hard disk, flash drive that stores and saves data and instruction sets for later retrieval; 3) output devices such as monitor screens, printers, speakers, represent the data to the user; and 4) software includes the instruction sets controlling the working process of the hardware and software. The database is the data storage from which data is retrieved for a software application during data processing by referring to data files (Stair & Reynolds, 2015). In terms of a network, it is technology connecting computers by sending electronic signals from one point to another point via the signal transmitter-receiver, a signal transmission medium, and communication programs for intercommunication.

The information technology applied and implemented in the organization concerns six main aspects (Wichiwanivech, 2017): 1) human resources management information system; 2) production information system; 3) supply chain and logistics management information system; 4) marketing information system; 5) financial information system; and 6) accounting information system.

Aspect 1

The human resources management information system is divided into three types: 1) Operations information includes recruitment, interview and placement (orientation, announcement, employment contract), personnel profile, performance evaluation, wage payment derived from multiple aspects of human resources management and presented to first-line managers. 2) Strategy information is also derived from multiple aspects of human resources management, namely, recruitment information, job analysis information, monitoring information, welfare and benefit information, and development and training information but presented to middle executives. 3) Strategic information such as workforce planning and negotiation is derived from the chief executive’s planning with long-term goals; then workforce must be considered according to other resources demand and a future workforce market (Clarkson, 2019).

Aspect 2

The production information system refers to a developed system supporting production and operations as well as all activities related to production planning, production control, and production process. The transaction results of production, production planning, monitoring, quality control, warehouse managing, purchasing, and related activities must be processed with other information systems such as delivery business, financial institution, retail business, and wholesale business. Production and operation functions are comprised of product planning and developing, production process design, plant location planning, production and operation planning, materials and inventory management, product quality control, production cost reducing, waste elimination, safety, productivity techniques, maintenance, and coordination.

Aspect 3

The supply chain and logistics management information system as pointed out by Naskar et al. (2020) shows two patterns which are logistics and supply chain management and production logistics management. For the first pattern, business competition has changed with a giant leap in customer needs while entrepreneurs mainly desire the highest profit with the lowest cost control policies. Organization management requires a proactive managing performance for an organization to adjust to non-stop changing situations. Supply chain management can reduce risks from investment costs in personnel, assets, and outdated technology. Hence, under the concepts of the supply chain management and organizational integration aiming at responding to the customer needs with the highest effectiveness, logistics management which is part of supply chain management deals with planning, effective operations and controlling results in forward moving outcomes of product, storage, service and all related information from start to finish to meet customer needs. Production logistics management consists of two tasks: inbound logistics management and inventory management. Inbound logistics management refers to the inter-organizational business process of material sellers and buyers who support organizational chain values in terms of materials purchasing, approval, and control while inventory management is about controlling stock volume; inventory includes raw materials, production parts as well as finished products.

Aspect 4

The marketing information system aimed at being timely and responding to customer needs is a system consisting of personnel, instruments, devices, collecting, categorizing, analyzing, evaluating as well as clearing information. The system is comprised of four subtypes: 1) A business registration system deals with process cycles such as sales cycles which are comprised of purchasing order accepting, order confirming, order opening, designing, monitoring, packaging, delivery and purchasing evaluations. 2) A marketing intelligence system is developed to collect marketing information, competitor information and marketing environment. 3) A marketing research system is information searching process and activity aimed at solving marketing problems or planning marketing strategies. 4) A marketing decision support system consisting of software and hardware is used for collecting data and planning systems by applying a combination of statistical tools, prototypes and qualitative analysis techniques in order to assist the organization in collecting, processing, and defining the marketing information (Hosseini et al., 2018). 5) A sales forecast system is developed to identify marketing opportunities and to forecast profitable marketing opportunities by analyzing and processing a former sales volume for future sales strategy planning, production planning, and marketing communication planning.

Aspect 5

The financial information system refers to a system developed for supporting managers and executives in financial decision making as well as financial resources allocation and control; that is, subsystems of cash management, investment, financial forecast as well as financial planning are developed. The financial information system can be divided into two types: 1) an operational financial information system which is derived from cash received and cash payment, fundraising and spending, and investment; 2) a managerial financial information system such as financial forecast information, cash budget information, investment budget information, financial analysis information, financial control information, financial market information, and government policy information that support financial management and administration (Andersen, 2019).

Aspect 6

The accounting information system is an operating system which is comprised of information technology, human resources, and organizational policies with an emphasis on utilizing accounting data retrieved from business operations in order to achieve organization objectives.

Research Guidelines

The sample in this research was comprised of 1,507,676 businesses registered with The Department of Business Development, Ministry of Commerce. The sample was divided into two types of business: manufacturing industry and service industry. For the sample size in the factor analysis study, the range was 500 samplings (Silcharu, 2020).

Research tools used in the factor analysis were a 5-point Likert rating scale questionnaire consisting of 100 questions with the index of item objective congruence (IOC) of 0 . 60– 1.00; the item discrimination was tested with the corrected item–total correlation of 0.31-0.74 while the reliability analysis measured by Cronbach's Alpha was at 0.95.

The sample was collecting by questionnaire. Descriptive statistics data were analyzed using the SPSS program while a multivariate statistical analysis was done using the AMOS program. The four evaluating metrics of data-model fit of Arbuckle were 1) chi-square probability level greater than 0.05; 2) relative chi-square value less than 2; 3) goodness-of-fit-index of more than 0.90; and 4) root mean square error of approximation lower than 0.08 (Silcharu, 2020).

Results

The Overview of the second order confirmatory factor analysis of consulting service using guidelines in the industrial business sector to achieve sustainable success; Figure 1 shows results of the data-model fit of the second order confirmatory factor analysis of consulting service using guidelines in the industrial business sector to achieve sustainable success. After a model adjustment with modified modification indices, the results were chi-square probability level=0.117, relative chi-square=1.1.32, goodness-of-fit-index=0.964, and root mean square error of approximation=0.016. It could be concluded that the four statistical results passed the evaluation; therefore, the model of the adjusted second order confirmatory factor analysis of consulting service using guidelines in the industrial business sector to achieve sustainable success matched the empirical data.

The second order confirmatory factor analysis of consulting service using guidelines in the industrial business sector to achieve sustainable success consisted of four latent variables sorted by weighted scoring prioritization from highest to lowest which were 1) consultant service using policy with the regression weight=1.025 and R2=1.05; 2) resource sharing with the regression weight = 0.914 and R2 = 0.84; 3) information technology with the regression weight=0.910 and R2=0.83; and 4) consultant characteristics with the regression weight=0.909 and R2=0.83.

The results of the second order confirmatory factor analysis of consulting service using guidelines in the industrial business sector to achieve sustainable success by factor.

Figure 1 shows the results of the second order confirmatory factor analysis of consulting service using guidelines in the industrial business sector to achieve sustainable success of the four factors as follows:

1. The five observed variables of the consultant characteristics component sorted by weighted scoring prioritization from highest to lowest were 1) having determination to work for mutual benefits principally, 2) having effective knowledge transferring guidelines, 3) being able to work under pressure, 4) having good and effective communication with employees towards benefit rewarding and earning, and 5) being devoted, determined and responsible for consultation.

2. The five observed variables of the consultant using policy component sorted by weighted scoring prioritization from highest to lowest were 1) setting performance, progress and operation evaluating guidelines for the consultants; 2) setting terms for further job offers in case of outstanding and well-accepted performance among insiders; 3) setting involved personnel to collaboratively work with the consultants; 4) focusing on teamwork more than working alone; and 5) setting a management plan for the consultant’s operations (late submission, quality of work, expenditure budget).

3. The five observed variables of the information technology component sorted by weighted scoring prioritization from highest to lowest were 1) a real-time report system for computer-aided decision making; 2) knowledge and innovation storage in information system; 3) current and up-to-date information; 4) international standardized information technology system and 5) organization’s database access rights controlling system.

4. The five observed variables of the resource sharing component sorted by weighted scoring prioritization from highest to lowest were 1) arranging work schedules of full-time employees co-working with the consultants; 2) providing rewards to a team upon success and achievement; 3) appointing temporary staff to assist the consultants when necessary; 4) assisting the consultants in coordinating and planning a study visit at an organization having experiences in successful problem-solving in similar issues as those of hiring organizations; and 5) allocating overtime work of team members supporting the consultant operations.

The overview of the importance of the analysis results of the consulting service using guidelines in industrial business sector to achieve sustainable success. From Table 1, the overview of the importance analysis results of the consulting service using guidelines in the industrial business sector to achieve sustainable success, the highest level was found with a mean of 4.65. When the importance level was considered by component, all components were found in the highest level: 1) resource sharing with a mean of 4.66 (S.D.=0.38); consultant characteristics with a mean of 4.65 (S.D.=0.33); 3) consultant using policy with a mean of 4.63 (S.D.=0.39); and 4) information technology with a mean of 4.60 (S.D.=0.43) sorted in the order of importance from most to least.

Table 1 Mean and Standard Deviation of the Consulting Service Using Guidelines in Industrial Business Sector to Achieve Sustainable Success
The Consulting Service Using Guidelines in Industrial Business Sector to Achieve Sustainable Success		χ	S.D.
The Overview of The Consulting Service Using Guidelines		4.65	0.36
1. Consultant Characteristics Component		4.65	0.33
Character24	Having determination to work for mutual benefits principally	4.73	0.474
Character21	Having effective knowledge transferring guidelines	4.72	0.49
Character15	Being able to work under pressure	4.69	0.50
Character13	Having good and effective communication with employees towards benefits rewarding and earning	4.73	0.469
Character1	Being devoted, determined and responsible for consultation	4.77	0.46
2. Consultant Using Policy Component		4.63	0.39
Policy1	Focusing on teamwork more than working alone	4.66	0.55
Policy8	Setting involving personnel to collaboratively work with the consultants	4.66	0.53
Policy11	Setting the management plan for the consultant’s operations	4.65	0.52
Policy16	Setting performance, progress and operation evaluating guidelines for the consultants	4.68	0.50
Policy25	Setting terms for further job offers in case of outstanding and well- accepted performance among insiders	4.59	0.60
3. Information Technology Component		4.60	0.43
InfoTech2	Organization’s database access rights controlling system	4.63	0.56
InfoTech7	International standardized information technology system	4.64	0.57
InfoTech9	Current and up-to-date information	4.68	0.50
InfoTech15	Knowledge and innovation restorage in information system	4.56	0.67
InfoTech20	Real-time report system for computer-aided decision making	4.54	0.68
4. Resource Sharing Component		4.66	0.38
ResSharing21	Assisting the consultants in coordinating and planning a study visit at organizations having experiences in successful problem-solving in as similar issues as those of the hiring organizations	4.59	0.62
ResSharing19	Appointing temporary staff to assist the consultants when necessary	4.47	0.74
ResSharing17	Providing rewards to a team upon the success and achievement	4.52	0.69
ResSharing14	Allocating over-time working of team members supporting the consulting operations	4.53	0.70
ResSharing12	Arranging a work schedule of full-time employees co-working with the consultants to the fullest	4.61	0.62

The importance analysis results of the consulting service using guidelines in the industrial business sector to achieve sustainable success by component. In terms of the importance level of the consulting service using guidelines in industrial business sector to achieve sustainable success by component, the three components sorted in the order of importance from most to least were as follows:

1. For the consultant characteristics component, it is comprised of 1) being devoted, determined and responsible for consultation; 2) having good and effective communication with employees; and 3) having determination to work for mutual benefits principally.

2. For the consultant using policy component, it is comprised of 1) setting performance, progress and operation evaluating guidelines for the consultants; 2) setting involved personnel to collaboratively work with the consultants; and 3) focusing on teamwork more than working alone.

3. For the information technology component, it is comprised of 1) current and up-to-date information; 2) international standardized information technology system; and 3) organization’s database access rights controlling system.

4. For the resource sharing component, it is comprised of 1) arranging the work schedule of full-time employees co-working with the consultants to the fullest; 2) assisting the consultants in coordinating and planning the study visit at the organizations having experience in successful problem-solving in similar issues as those of the hiring organizations; and 3) allocating overtime work of the team members supporting the consultant operations.

Discussion

The component affecting the consulting service using guidelines in the industrial business sector to achieve sustainable success the most was the consultant using policy which had a standardized regression weight of 1.02 with a statistical significance level of 0.001. The policies related to consulting service use such as recruiting policy are considered important in terms of human resource management since the recruiting process focuses on finding and selecting qualified personnel with knowledge, competence, human relations, morality and ethics; employees should not only have good performance, they should also avoid trouble or destroy good corporate culture. Hence, the recruiting and selecting policies can be challenging as well as the remuneration policy (Bateman et al., 2015; Dessler, 2016; DeCenzo et al., 2016).

Current and up-to-date information is the most important because all operations now require the most updated data which are effectively restored such as product prices, customer behavior, financial data, and domestic and international logistics expenditures. The data can be used by the consultants when accurate data analysis or forecast is necessary; supporting the strategic operations of the organization as well as decreasing possible risks (Stair & Reynolds, 2015).

Being devoted, determined and responsible for consultation are necessary characteristics of the consultant as the hirer expects effectiveness and efficiency from the consultant with the best performance in terms of knowledge, skills and ideas which benefit the hirer (Bird, 2019; Schwarz, 2017).

For the resource sharing component, arranging the work schedule of full-time employees co-working to the fullest with consultants is the most important as the consultants are outsiders who need collaborative support from insiders in terms of a number of employees, in-depth information sharing, or meetings. If insiders do not cooperate in resource sharing with the consultant, the consulting work may reveal false or unreliable results leading to a negative image of the organization. This concept of cooperation supports the research of Cerneviciute & Strazdas (2018), who examine the effective team working factors affecting industrial productivity. The research results indicate factors affecting industrial productivity with a statistical significance level consisting of setting specific operation teams, explaining the operation goals, mutual working schedules, sharing resources, and team working guidelines to the team members. The teamwork factors encourage the highest level of productivity besides the innovation development.

Recommendations

Training should be organized among members of Thai Business Consultants Associations by The Federation of Thai Industry in order to encourage the members to consider the consulting service using guidelines in the industrial business sector to achieve sustainable success. For consulting service providers, client and entrepreneur needs must be understood in detail for both internal and external organizational situations.

To optimize the highest values and effectiveness from the consulting service, the users should set a clear consulting service using policy and communicate with the employees to establish acknowledgement and perception; also, organization representatives must inform the employees about the consultant using policy before hiring consultants.

For the public sectors such as Consultant Database Center, the Ministry of Finance should consider announcing lists of unqualified or corruption-related consultants, setting a consulting service using policy for consulting service use achievement. Public authorities can utilize the research results as guidelines for consulting service using policy setting with the obvious and concrete performance measurement as well as specifying required characteristics, competence, expertise, achievement, experiences, devotion, determination, knowledge transfer, and recommendation sharing of the consultants for different job categories which can lead to practical operations and ethics.

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