James O. McKinsey

Template:Short description Template:Infobox person James Oscar McKinsey (June 4, 1889 – November 30, 1937) was an American accountant, management consultant, professor of accounting at the University of Chicago, and founder of McKinsey & Company.<ref name="FT 1996">Template:Cite encyclopedia</ref>

Biography

McKinsey was born in 1889 in Gamma, Missouri, son of James Madison McKinsey and Mary Elizabeth (Logan) McKinsey.<ref>Rita Perine Merritt, Leonard Bickwit (1925), The Accountants' Directory and Who's who. p. 576</ref><ref>Allen G. Debus, World Who's Who in Science, Marquis Who's Who, Inc. 1968. p. 1148</ref><ref name="MW 2005">Template:Cite encyclopedia</ref> After attending regular public school, McKinsey initially received training as a teacher at the Warrensburg Teachers College, now University of Central Missouri, where in 1912 he obtained his Bachelor of Pedagogy.<ref name="FT 1996"/>Template:Sfn

McKinsey continued to study law at the University of Arkansas, where he obtained his Bachelor of Laws in 1913.Template:Sfn In 1914 he studied and taught bookkeeping at the St. Louis University.<ref name="FT 1996"/>

Next, McKinsey entered the University of Chicago, where in 1916 he obtained his Bachelor of Philosophy and Master of Arts in 1917, both in commerce.Template:Sfn<ref name="FT 1996"/> McKinsey was then drafted into the United States Army in 1917; he would rise in the ranks from private to lieutenant in the Ordnance Department and was discharged in 1919.Template:SfnTemplate:Sfn While in the Army, McKinsey believed that the logistics process lacked efficiency.Template:Sfn

From 1917 to 1920, McKinsey was an instructor and assistant professor of accounting at Chicago.Template:Sfn McKinsey became a certified public accountant in Illinois in 1919.Template:Sfn In 1920, McKinsey married Alice Louise Anderson; they had two children.Template:Sfn McKinsey then became a lecturer in accounting at Columbia University from 1920 to 1921.Template:Sfn

Further career

Having written textbooks about accounting and taxes, in 1922 he published his first major work, entitled Budgetary Control.<ref name="FT 1996"/>Template:Sfn It is regarded as "the first definitive work on budgeting".,Template:Sfn and was written at a time when budgeting was limited to government, not private industry.<ref name="FT 1996"/> In his book, McKinsey advocated that companies' performance should be judged by staying within a set budget.Template:Sfn<ref name="FT 1996"/>

McKinsey followed up Budgetary Control with two more books, Managerial Accounting and Business Administration, in 1924. In Managerial Accounting, McKinsey demonstrated ways that accounting data could reform businesses, for instance financial standards that could determine efficiency of business operations. Business Administration would serve as a precursor to the General Survey Outline, a 30-page system that McKinsey created in 1931 to evaluate a company's finances, organization, and competitiveness.Template:Sfn These books were considered by reviewers to be "rigidly and boldly scientific as never before".Template:Sfn McKinsey also became president of the American Association of University Instructors in Accounting in 1924 and helped establish its journal The Accounting Review.<ref name="FT 1996"/>

In 1925, McKinsey founded his own consultancy firm James O. McKinsey & Company, in Chicago, where he served as senior partner until 1935.<ref name="MW 2005"/> Although he was promoted by the University of Chicago to full professor in 1926, because of his business obligations, McKinsey taught only two courses at Chicago starting in 1928.Template:Sfn In 1935, Chicago department store Marshall Field & Company retained McKinsey's services to resolve financial difficulties, specifically $12 million lost since 1930 and a loan repayment of $18 million. After sending 12 consultants to review 752 stores in 32 states, factories, and wholesalers, McKinsey recommended that Marshall Field should limit its business to retail, sell its factories, and end wholesaling. Marshall Field's board offered McKinsey the job of chair and chief executive, and McKinsey accepted the offer in October 1935.Template:Sfn While leading Marshall Field, McKinsey also sat on the boards of Kroger, the Armour Institute of Technology, and other businesses and organizations.Template:Sfn

For his eponymous company, McKinsey named Andrew Thomas Kearney managing partner of the Chicago office. In 1936, McKinsey was also elected chairman of the American Management Association.<ref name="FT 1996"/><ref name="MW 2005"/>

The History of Accounting: An International Encyclopedia explained that McKinsey "soon turned Marshall Field's red ink into profit, but he may have done so at the cost of his health. He died of pneumonia on November 30, 1937."<ref name="FT 1996"/>

Selected publications

• Hodge, Albert Claire & James Oscar McKinsey, Principles of accounting, Chicago, Univ. of Chicago Press, 1920.
• McKinsey, J.O. Bookkeeping and Accounting, Volume 1. Cincinnati: South-Western, 1920.
• McKinsey, J.O. Bookkeeping and Accounting, Volume 2. Cincinnati: South-Western, 1920.
• McKinsey, James O. Budgetary control. New York: The Ronald Press, 1922.
• McKinsey, James Oscar. Managerial Accounting. Vol. 1. University of Chicago Press, 1924.
• McKinsey, James O. Business Administration. South-Western Publishing Co, Cincinnati, Ohio 1924.

References

Works cited

• Template:Cite book
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Notes