A Case Study of Management Strategies at the Deloitte Australia

Introduction

Deloitte is one of the largest providers of professional network services in the universe. Currently, Deloitte has the largest number of professionals from different parts of the world. As a result, the firm earns most revenue in more than 150 countries (Scott-Kemmis 2014, p. 32). The company provides services such as consulting, audit, enterprise risk, tax and financial advisory, among other services. Deloitte was formed by merging Deloitte Haskins and Sells Company with the Touche Ross Company in the year 1989 in the United States. Jointly, the company was led by Michael Cook and Edward Kangas (Lessambo 2013, p. 78). The primary reason behind the rapid growth of the Deloitte Company is through mergers and acquisition. For instance, on January 11, 2013, the company took over the Monitor Group, which is a consulting firm that was founded by Michael Porter (Hill 2009, p. 63). This was after the firm was declared bankrupt. The purpose of this short paper is to narrow down to the discussion of the management strategies employed by the Deloitte Australian Company and how the strategies have helped the company as far as off-shoring is concerned.

Deloitte Australian is one of the members of the Deloitte Touche Tohmatsu Limited Company, which is a private company that is based in the United Kingdom (Lessambo 2013, p. 83). The Deloitte Australian Company is based in the Australia. Consequently, the company has been structured according to the customary practices, laws, rules and regulations, and other factors that regulate business activities in Australia. For this reason, Deloitte Australian has been unique from other Deloitte companies in the world. Besides, the company has employed unique management strategies that have helped it expand rapidly in the provision of services, which has made it expand its services outside Australia (Hill 2009, p. 73). For instance, Giam Swiegers had a well laid down strategy on how to improve the business as the first CEO of Australian Deloitte.

One strategy that has contributed to the advances at the Deloitte Australia was the adoption of the ‘blue ocean strategy’ (Scott-Kemmis 2014, p. 39). However, before the adoption of the strategy, the company had enjoyed success due to the prevailing business atmosphere in Australia. Despite the success of the company, the corporate industry underwent some crisis in Australia. This was after other competitors were forced to lower the fees charged for various service by a high percentage. As a result, the Deloitte Company lost some of its customers to the competitors. However, adopting a new strategy at the Deloitte Australian helped the company to overcome its challenges (Osterwalder, Pigneur & Clark 2010, p. 169). Consequently, all the other companies were forced to do away with the business of consulting. As a result, Deloitte was left unaffected. By the end of a decadent in the industry, the company had overtaken all the others companies in Australia because it was the best and, therefore, the most respected company (Hill 2009, p. 60). The primary clients of the company largely involved the owners of small and medium enterprises in the country. The success achieved at the company forced it to increase its services and to other offshore countries.

Moving the activities of the Deloitte Australia to offshore has not had a good name for quite some time. For instance, even though off-shoring is thought to have a number of positive effects scholars argue that many businesses that adopt the idea end up not enjoying the advantages of off-shoring due to fear of risking (Lessambo 2013, p. 109). In fact, most of the scholars tend to link the opposition to off-shoring to opposing imports. This is because off-shoring attracts external competition. Nevertheless, the local competition was very stiff in Australia. Therefore, in order to withstand the local competition, there was a need to offshore through gaining of cost advantages (Lindič, Bavdaž & KovačIč 2012, p. 41). In regard to this, whenever it is difficult to compete with developing nations in the cost of wages, other grounds can be used. For instance, innovation and excellent skills of workers can be off-shored in order to help the company to balance competition.

Off-shoring has been widely used in other sectors of the Deloitte Australia, which has greatly enhanced expansion, as well as the rapid growth of the company (Scott-Kemmis 2014, p. 47). Similarly, the idea has been used in some other big companies in the world. For example, the engineering sectors of most big companies in the world such as the oil companies have relied primarily on the off-shoring from the United Kingdom. Consequently, this has significantly improved capital projects of most gas and oil companies. In other nations, it has helped solve the problem of skill shortages, especially in the developed nations. In fact, it is expected that in years to come, India will have more skilled workers. This may create sources elites that can provide labor to Australia as a result of off-shoring (Kim, Mauborgne & Furman 2007, p. 109). In addition, due to growth in technology, services are now easily provided from other countries at an advantageous cost of labor as compared to domestic labor cost. In this regard, the Australian companies, which have already started off-shoring, are already enjoying an experienced average wages growth as well as employment that are higher than the Australian average

The Blue Ocean Strategy was created by the Deloitte Australian in order to bring a revolution to the business and restructuring of service industries that were professional (Kim, Mauborgne & Furman 2007, p. 98). This was caused by the curiosity that embedded Deloitte Company. The strategy also helped in market boundary restructuring. For instance, customers were pulled to be part of the strategy and competition was made irrelevant. The oceanic move was responsible for impacting changes regarding the way in which people viewed the various professional services offered by the Deloitte Company in Australia. Before the adoption of the strategy, the competition was high in the industry. For instance, the major companies within this industry competed across various ranges of services such as the fees charged for the services offered, integrated services, traditional values, the contact hours, market commentary as well as the billable, and firm legacy, among others. In addition, the CEO started a corporate design and an architectural strategy, which helped respond to the dynamic business environment.

The Company Environment and Off-Shoring at the Deloitte Australia

Off-shoring has been encouraged by the advances in technology, which have contributed to globalization (Kim, Mauborgne & Furman 2007, p. 83). Globalization has encouraged and promoted political, social and economic liberalization in different parts of the world. Liberalization of the economy and political stability has led to improved technology and free capital flow. Economic reforms have led to the attraction of foreign investment. For instance, this is a case that has seen India developing fast. In addition, off-shoring of services has been expanded due to the rapid application of technology. Extensive use of internet has made it easy to pass information. This has led to the centralization of companies away from their customers. Concisely, companies are forced to engage in off-shoring due to external environmental factors of business (Ranganathan, A & Kuruvilla 2008, p. 167). Therefore, the Deloitte Company resolved to off-shoring in order to find a balance in the environmental business factors.

The production of many highly motivated graduates who have the capability to work like other highly educated workers in the world has resulted in moving jobs offshore. In this case, Deloitte could use off-shoring to get experienced workers from other parts of the world (Kim, Mauborgne & Furman 2007, p. 89). In addition, the availability of higher education in Australia also gave a competitive advantage to Deloitte over other international companies. For this reason, there is a high motivation for Deloitte to offshore its labor supply in countries such as the United States and India. Besides, the age factor had a big influence in moving labor to offshore for the Deloitte Australia. For instance, the average age in the US, and Australia is between 36 and 38 years while that of India is 24 years (Ranganathan, A & Kuruvilla 2008, p. 167). Therefore, there is a young population that is able to support off-shoring.

On the other hand, the internal business factors have also contributed to off-shoring. In this regard, the issue of attracting and retaining the best talent has led to off-shoring (Ranganathan, A & Kuruvilla 2008, p. 171). The company has become creative on how the customers adjust. In case there is the delivery of insufficient numbers of trained personnel who can successfully adopt senior roles, off-shoring is encouraged. For example, the shaping of the workforce for the purpose of future is one of the internal issues leading to Deloitte opting to move jobs offshore. This is a strategy that was adopted so that people may get to learn new things while working rather than continue using the traditional hierarchy. It also leads to the creation of differentiated career paths, which will lead to a great development of the people. This challenges the company to bring in offshore talent in order to improve the mobility of its workforce.

In addition, the company’s mandate to apply innovation and to grow is also a driving force for moving jobs offshore. Deloitte has perceived beyond the traditionally competed market boundaries causing an attractive position for its customers and for its own (Ranganathan, A & Kuruvilla 2008, p. 175). Furthermore, most of the Deloitte clients are highly burdened by systems of financial management that are costly. Off-shoring is left as the only alternative to curb the problem.

Despite the advantages associated with off shoring, a number of jobs will continue to be based in Australia for various reasons. For instance, about 73 percent of the Australian workforce is based in service industries, which cannot be off-shored. Such services include health and community services, restaurants, and cafes as well as retail trade. In addition, there is a rapid employment growth in small and medium businesses in Australia. Off-shoring would, therefore, would mean a great disadvantage. In this regard, some jobs such as software engineering will be suitable for offshore relocation. This is because it is easy to create employment and wealth through digitization.

The idea of off-shoring will have an influence on various stakeholders at the company. The stakeholders in Deloitte Company include employees, regulators, consumers, and investors. If the company fails to consider different aspects with regard to sustainability performance, there is a possibility that stakeholder credibility will be lost and that effort will be wasted (Osterwalder, Pigneur & Clark 2010, p. 209). It is important that Deloitte, like any other big company, report different issues that may hinder smooth operations. Disclosures can help the stakeholders assess the company’s sustainability performance (Elenurm 2013, p. 96). For example, some workers may be laid off as a result of off-shoring, and this will greatly affect their sources of income. This causes a lot of insecurity to most workers who might be disadvantaged by the system of off-shoring. On the other hand, the community will benefit since it will be provided with talented and skilled volunteers since employees will devote their skill, both personal and professional to the needs of the community. In addition, off-shoring will help the company reach its short term, and long term goals since its reputation and image will be improved significantly.

Off-shoring may end up having different implications apart from the benefits of increased labor force savings. It is difficult to offshore labor to areas whereby the first culture and language are different (Elenurm 2013, p. 100). This makes it hard to adapt and hence may cause inefficiency since due to the long time take to adapt to the changes. In addition, security issues may also arise since the offshore workers are subjected to different lawmakers with whom they sign a contract with. Any misunderstanding of any kind of law may require the intervention of a third party, which may be quite involving. Moreover, off-shoring can be termed as a phenomenon of trade that encourages spillovers of technology, as well as an inflow of capital (Lindič, Bavdaž & KovačIč 2012, p. 68). This may lead to increased unemployment levels as a result of increased domestic markets. However, irrespective of the negative implications, Deloitte may not decide against moving jobs offshore due to the many benefits associated.

Conclusion

Off-shoring can greatly be credited to digitization. Decisions on off-shoring do not take a long time to be implemented after they have been made. Information can easily be sent everywhere in the world within a short period of time. There is uncertainty on if gains of off-shoring exceed losses and this has led to criticism of the idea of off-shoring. Scholars argue that provides benefits to both poor and rich economies through continued investment in science and technology, as well as n education. As discussed above, Deloitte Australia is a company that has been able to benefit from off-shoring since the adoption of the blue ocean strategy. This has helped the company to articulate values of the organization since members of the staff are allowed to contribute to various issues in the organization. In addition, mentorship has also been encouraged among the members in relation to off-shoring. Consequently, the company has experienced tremendous growth and has attained and maintained its first position as the leading company in innovation and business.

References

Elenurm, T. (2013). Knowledge Management and Innovative Learning. California University.

Hill, K. (2009). Cases in corporate acquisitions, buyouts, mergers, & takeovers. Detroit, Mich, Gale.

Lessambo, F. (2013). The international corporate governance system: audit roles and board oversight.

Lindič, J., Bavdaž, M., & KovačIč, H. (2012). Higher growth through the blue ocean strategy: implications for economic policy. Research Policy. 41, 928-980

Osterwalder, A., Pigneur, Y., & Clark, T. (2010). Business model generation a handbook for visionaries, game changers, and challengers. Hoboken, NJ, Wiley

Kim, W. C., Mauborgne, R., & Furman, Z. (2007). Blue ocean strategy how to create uncontested market space and make the competition irrelevant. Prince Frederick, MD, Recorded Books.

Ranganathan, A., & Kuruvilla, S. (2008). Employee Turnover in the Business Process Outsourcing Industry in India. Cambridge University.

Scott-Kemmis, D. (2014). No simple solutions: How sectoral innovation systems can be transformed. Canberra: Australian National University.

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