Ernst & Young is a global company that is mainly involved in specialized consultancy services. With over 30,000 employees, its operations are felt in about 100 locations globally.
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The company is a product of several mergers since its inception in 1849. Despite its merging history, the corporation has managed to create its unique brand as one of America’s most desirable companies due to its commitment to service to all stakeholders spanning from the employees, investors, and customers to the larger business community and financial markets serving it.
The company offers counseling services, auditing services, and tax conformity services as its flagship products. As the paper reveals, the company applies principles of learning, leadership, team building, group dynamics, conflict management, employee motivation, communication, organizational design, and cultural change to its organizational structure as part of its strategic management.
The company’s learning and knowledge system uses both formal and informal community-of-practice websites that are divided into both services provided and the respective locations (Harrington, Voehl, & Feigenbaum, 2007). For instance, a particular region may have a community of service website for each of the major services that the company provides.
In addition, the communities-of-service websites that are related in terms of service are merged into a global community of practice website. The formal section of these knowledge-based community-of-service programs is usually organized and managed by accredited knowledge managers while the informal sections are developed based on the need of individuals to exchange information in line with a common interest in topics of discussion.
They have no specific assignment to any official manager. Through this system, the company can acquire knowledge that it may seek without going through the hustle and bustle of a search process. The systems has been proven an excellent tool that allows the company’s consultancy to acquire the latest and most premier information concerning the subject matter that is of its interest (Harrington et al., 2007).
According to Maula (2006), the learning processes for Ernst & Young are designed to provide support for its overall goal of achieving its key strategic objectives. Therefore, they are in line with the firm’s identity and continued perception of its business environment.
The firm has managed to cement a culture of knowledge sharing that has allowed it to grow, thus providing a source of motivation for its continued engagement and devotion to learning from its immediate business environment and its previous experiences from the global knowledge sharing strategy. To facilitate this process, the company has a global knowledge and communications flow system that is both internal and external such as the customized Ernst & Young Knowledge Web, which is a consultancy tool for the company (Pino, 2014).
As part of its leadership strategy, the company operates under various insights and principles. Firstly, it ensures that the overall structure of the organization supports its cross-regional and global collaboration. Secondly, it comprehends the impact of the firm’s business on both the social and environmental sustainability in its new ventures. It also upholds the use of technology in knowledge sharing while never assuming that its culture is better than others.
Through the employment of these principles as part of its global leadership strategy, the company can benefit from the productive forces of innovation and diversity to do its business differently. Moreover, applying the principles has enabled the company to face off new challenges to achieve success in the competitive market (Cohen, 2007).
According to Mathew Parker in June and Mathis (2013) article, leaders should lead using foresight. They should always know when and what to follow. In this attempt, leaders should help in the development of an organization and self to gain the ability to lead others and themselves. In this regard, the company has developed a leadership program, which is involved in appreciating and recognizing upcoming leaders in the business world.
As part of the program, the firm holds an annual Emerging Leaders’ Summit that brings together student leaders across the United States to listen to global leaders speak and participate in team building and other leadership empowering activities. Through this program, the company has built up young leadership that it can later recruit into its system and continue to prevail as a global leader in business (Williams & Reitman, 2006).
The company has continuously redefined the way it applies the concept of teams through making the most out of the diverse ideas and cultures in its areas of operation that may prove useful in its propulsion to continued realization of success. The company has formulated its blueprint of insights that support diversity in its teams where managers or team leaders are expected to consider the following elements as part of their management structure (Kurtz & Boone, 2011).
- Attitude: The managers should think about what can transpire for a cultural change to be realized within their teams and the organization at large.
- Aptitude: The respective managers should embark on an every-corner search for talent within the organization such as the assistance desk, the cafeteria, the human resource office and any other department that is considered part of the organization.
- Anticipation: Managers need to have the attribute of creativity to use the diversified talents of their team members in the identification of new products that have the potential of being breakthrough products.
- Consent: As opposed to the misconception that total agreement is necessary for organizational success, this principle encourages disagreements among team members as a way of boosting the team’s energy that in turn forces participants to unleash new and more vibrant ideas and solutions.
Therefore, through the employment of these core principles, the company can integrate a global mindset of diversification of its perspectives, hence positioning itself as a drive for its continued innovation and success in the long term (Kurtz & Boone, 2011).
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Besides team diversity, the company has also incorporated virtual teams as part of its team strategy. The teams have been operational for over a decade. Virtual teaming does not require face-to-face interaction. It can be done through telecommunication or videoconferencing as the mode of communication among the various virtual teams (Williams, 2013).
According to Forsyth (2010), group dynamics are an influential process in both social and economic spheres where each group possesses common qualities that allow it to perform its tasks properly, despite its unique distinctive features. These dynamics may include interactions, goals, and coordination.
Interactions among the various groups and teams are internal among employees and external to the firm’s clientele. Through these interactions, the firm can create and improve value of service for its global customers. For instance, the company has created the Global Client Consulting divisions that allow interactions among its group members in Europe, Latin America, and Asia Pacific (Maula, 2006). Goals forms part of the dynamics that steer the reason for the existence of a group or team.
For instance, the virtual groups within Ernst & Young’s organizational structure have established clear and specific goals through a detailed explanation of both the consequences and the significance of meeting their goals. In addition, team members measure their progress to provide frequent feedback to senior management such as annually. Senior management also strives to visit most of its international teams at least once a year to discuss members’ commitment to achieving success via their identified goals (Williams, 2013).
The company has coordinators who are dedicated to the integration of work performed by the members of a group or among the various groups. One of the objectives of group coordination is to ensure that important information is transferred regularly between the various teams or groups that may have independent work streams and goals. In addition, coordinators employed by the firm also monitor team activities to ensure the maximization of opportunities presented to the company (Galbraith, Downey & Kates, 2002).
According to Sakala and New (2013), conflict of interest presents a common challenge for most asset managers and financial institutions that have a complex structure. As a professional services company, Ernst & Young is engaged in helping businesses through its advisory services on how to handle conflicts in their organizational structures, which it applies in its organizational configuration.
One of its core values in conflict management is the requirement of its managers to mitigate or eliminate any possible conflicts that span around its investment opportunities.
For instance, in the case of the company offering more than one products to its customers, managers are required to operate under detailed procedures highlighting the core assets they purchase on behalf of the firm and with particular examination in case such investments are not allocated in accordance with other similar funds. This principle of conflict management has been particularly applied in the provision advisory services for financial investments such as hedge funds (Sakala & New, 2013).
Another principle that is core to the company’s conflict management strategy is its use of regulators, particularly when it concerns the allocation of investment opportunities. In this respect, the regulatory managers must guarantee no conflicting strategies among the multiple allocated funds.
Moreover, the regulatory managers should ensure that the administrators in pursuant of the company’s dealings are doing so in the best of interest of its investors (Sakala & New, 2013). According to Harden (2015), Ernst & Young recognizes the importance of face-to-face communication when resolving conflicts within the organization at its national and multinational levels as opposed to overreliance on video links and email communication and conflict resolution systems.
Ernst & Young Company is highly committed to motivating its employees from top to bottom. A significant strategy applied by the company’s management in employee motivation is its mid-career renewal. Instead of solely laying focus on its young and vibrant employees, the company has committed itself to recognizing its middle-aged skilled staff through devising a program that assists these employees to reposition themselves in a renewed state that is backed up by their immense learning and working experiences.
According to O’Brien (2009), most employees display a positive outlook in their future and that of the firm based on their experience from the program. The company has also implemented a flextime system that aims at rewarding its employees for working in a very intense industry, which at times requires their commitment to working longer hours, particularly during peak seasons.
The system may be in the form of employees working 3-day weeks or going for extended breaks during summer. This move is important, as it prevents burnouts that may result in low turnover and productivity (Pride, Hughes, & Kapoor, 2014).
Another method used to retain or motivate the company’s employees is through the provision of employment agreements of its most resourceful human resources.
The employee is required to work for the company for a specific guaranteed period during, which the executive teams up with the company. In addition, the executive members may also be required to sign a noncompetitive agreement that sets a period during, which it they are not allowed to go work for a competitor when they leave the organization (Ford, Bornstein, Pruitt, & Young, 2010).
The firm has rolled out a reputable communications network that acts as part of its strategic component that allows it to run its other strategic components. Through its advanced ICT systems, the company can accumulate and even share global knowledge among its teams.
The ICT systems acts as a channel through which it can easily access information, facilitate creative thinking, allow analysis, and more importantly, facilitate organizational communication. The company has also established groups such as SME networks that allow its interaction with customers in virtual cyberspaces (Maula, 2006).
Communication can flow in a vertical or lateral fashion. Ernst & Young has perfected the art of upward communication that is incorporated into its organization’s structure. Upward communication involves the flow of communication from the lower to the higher levels of management.
According to Deborah Chapman, the company’s communications manager, the firm holds regular CEO/staff lunches that allow engagement of both its execute and junior staff members in discussing matters that may need to be addressed. Moreover, the lunches provide a forum for the junior staff officials to lay out their burning concerns, ideas, and queries (Robbins & Judge, 2009).
The company has also laid out strides in communication with its shareholders, regulatory authorities, labor movements, and community organizations that have a strong influence on the firm’s corporate future and thus need to be accounted for.
For example, the company’s investor relations officer is tasked with the responsibility of ensuring that proper communication is given to the company’s shareholders and financial analysts with special regards to its value potential and intangible assets that emphasize the importance of communication in the corporate value chain (Laskin, 2010).
A very significant part of the firm’s organizational design is its commitment to promoting diversity in its workforce. In this regard, the company continues to develop and implement programs that promote this aspect such as mentoring, training, development of tough policies that touch on threatening issues such as racial discrimination and sexual harassment, and other programs that may need to be developed as a response to its diverse workforce.
In addition to the management of such programs, the company is devoted to the practice of leadership diversity where it takes a lead in supporting and fostering workforce diversity both within and beyond its managerial boundaries. A case in point is its accounting office in Toronto, Canada, which is actively engaged in community programs that support both immigrant and minority youth employment through its recruitment policy that assists immigrants’ integration into the Canadian society (Daft, 2010).
Also included in its organizational design is its engagement in professional partnership with other consulting and auditing companies such as PriceWaterhouseCoopers, although the company is entitled to autonomy and a decentralized authority to make crucial decisions. The partnership requires the involved companies to work under a principle of consensus that ensures professionalism (Daft, 2010).
Also embroiled in its organizational design is the company’s emphasis on the aspects of leadership and planning that are essential in strategic development and in motivation and satisfaction of its employees, suppliers, and customers. To stay on course with its purpose, the organization aligns its key systems with its cultural policies. As a result, the company has brought out the desired behaviors within the organizations that are commensurate with the achievement, vision, and mission (Harrington & Voehl, 2012).
Culture and Change
According to Caplan (2003), culture can be sophisticated and may vary among the different parts of the organization. One such culture as practiced by Ernst & Young is its coaching, which has been driven by the need for knowledge management. Through coaching, the company copes with competitive pressure and changes in its approach to issues. Over the years, the company has continued to refurbish its coaching style and culture, which it applies to its professional services.
As part of its corporate culture, the firm is committed to employee motivation through continued training, coaching, mentoring, and provision of desirable benefits package. In addition, the company encourages its employees to voice their concerns, opinions, and ideas, thus placing employee treatment as one of its top-most priority (Fernandez et al., 2013).
In terms of advisory services, with relation to culture, the company is responsible for providing solutions that are instrumental in assisting clients to adopt organizational cultures, which guarantee success in the implementation of key management programs and initiatives. As part of its experience, management efforts may present as a major challenge in the adoption of new cultures due to the clashing of the firm’s members’ behavior with the new values (Becerra-Fernandez, Leidner, & Leidner, 2014).
In ensuring that the aspect of cultural change is well integrated, the company’s team managers are expected to have a mindset that can drive cultural change, including a change in business environment or a recent acquisition or merger (Kurtz & Boone, 2011).
Being a global leader in professional services, Ernst & Young has incorporated principles of learning, leadership, team building, group dynamics, conflict management, employee motivation, communication, organizational design, and cultural change into its organizational structure as part of its strategic management. In the case of learning, the company uses community-of-service websites as a method of acquiring knowledge that is paramount to its management strategy.
The company also applies particular insights as part of its leadership strategy such as ensuring that its overall structure supports its cross-regional and global collaboration. In terms of teams, the organization has developed virtual teams that guarantee smooth management across all its operating offices. The company has also put in place procedures that can be applied in situations of conflict of interests, which may be damaging if not dealt with properly.
Ernst & Young also recognizes the significance of employee motivation. It has put in place measures that ensure that its skilled staff members are highly motivated. In addition, the organization has embroiled a strong corporate culture in almost all areas of management such as human resource and communication procedures, all of which are essential in its overall success.
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