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Managerial Analysis of Ernst & Young

Public Management (Đại học Quốc gia Hà Nội)

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NATIONAL UNIVERSITY OF HO CHI MINH CITY

UNIVERSITY OF ECONOMICS AND LAW

Managerial Analysis of
Ernst & Young

Lecturer: Hoang Doan Phuong Thao

Class: K18405CA
Group: 4

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Members’ Identification

Nguyễn Gia Hân K184050669

Nguyễn Ngọc Thùy Trang K184050697
Nguyễn Phương Minh K184050683

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Table of contents

1. Introduction of Ernst & Young – One of Big Four ............................................ 4

1.1. Introduction ............................................................................................... 4
1.2. A brief history of Ernst & Young ............................................................... 4
1.3. Mission ..................................................................................................... 4
1.4. Vision........................................................................................................ 5
2. The SWOT analysis and organizational strategy ............................................... 5
2.1. The SWOT analysis ................................................................................... 5
2.2. Organizational strategy ........................................................................... 10
3. Organization’s structure of Ernst & Young ..................................................... 11
3.1. Organizational Chart ............................................................................... 11
3.2. Acknowledgement regarding the present Board of Ernst & Young .......... 14
4. Ernst & Young’s leadership ............................................................................ 16
4.1. Organization’s heroes: The Global Executive .......................................... 16
4.2. Objective approach to organization’s heroes ............................................ 18
4.3. Motivational environment in Ernst & Young ........................................... 19
5. Operational scheme of Service Lines in Ernst & Young ................................ 21
6. Summary ........................................................................................................ 23
References ............................................................................................................ 24

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1. Introduction of Ernst & Young – One of Big Four

1.1. Introduction
Ernst & Young (abbreviated as EY) is one of the largest services organization in the world as one
of the Big4 accounting firms in conjunction with Deloitte Touche Tohmatsu (Deloitte),
PricewaterhouseCoopers (PWC) and Klynveld Peat Marwick Goerdeler (KPMG). Ernst & Young is an
international organization whose approximately 270,000 employees with a considerable amount of
presented offices in more than 150 countries, offering principal services constituted of assurance,
advisory, tax and transaction advisory service. Headquarters of Ernst & Young is located in London, the
United Kingdom. As of 2017, Ernst & Young was the 9th largest privately owned firm in the United
States. In 2018, Ernst & Young was rank by Fortune magazine as the 52nd on the list of 100 Best
Companies to Work For.

1.2. A brief history of Ernst & Young

Ernst & Young is the finalization of mergers of preceding organizations. In 1849, the oldest
predecessor organization was founded with a name as Harding & Pullein in England. In the same year,
Frederick Whinney joined the company. He became a senior employee in 1859 and then the company was
renamed Whinney Smith & Whinney in 1894. In 1903, Alwin C. Ernst and Theodore established the
Ernst & Ernst companies in Cleveland. The following three years, Arthur Young & Co. was founded by
Arthur Young in Chiacago. In 1979, the fourth largest worldwide accounting firm called Ernst &
Whinney was founded by merging two firms Ernst & Ernst and Whinney Smith & Whinney. The current
firm was formed by a merger of Ernst & Whinney and Arthur Young & Co. in 1989. In 2006, Ernst &
Young became the only member of the Big4 that has two subsidiaries firms in the United States, with the
comprehension of Mitchell & Titus, LLP, the largest minority-owned accounting firm in the United
States. It was known as Ernst & Young until 2013, when it underwent a rebranding to “EY”. The
acronym "EY" was already an informal name for the firm prior to its official adoption.

1.3. Mission
The mission of Ernst & Young is building a better working environment. Those in-depth
knowledge and quality services that firm give assistance enhance the belief in monetary sectors and
economies in the world. To implement this, the company train outstanding leaders who have
responsibility for performing promises partner. Therefore, Ernst & Young takes an important role in
building a better world for people, clients and communities. In terms of the contemporary society, the
world is transforming faster than ever. Ernst & Young firms have an orientation to facilitate digital
pioneers with information privacy; guidance for governments through cash-flow crises; unlocking new
medical treatments with data analytics; and pursuing prime quality audits to build up trust in money
markets and enterprises. In summary, Ernst & Young working with entrepreneurs, firms, and whole
countries to purpose resolve most pressing challenges. Ernst & Young provided four integrated service
lines — Assurance, Advisory, Tax and Transaction Advisory Services, which the firm are inclined to
make it achievable for a client to grasp the opportunity, valuating and anticipating risks delivering
responsible growth. The high-performance interdisciplinary teams are able to meet regulatory
requirements, educate investors and respond to stakeholder requirements. Ernst & Young believes that a
better working world has sustainable and inclusive economic growth. Ernst & Young staffs been

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constantly working towards improving their quality, investment and innovation of all of existing services.
And Ernst & Young is enthusiastic to work with others, from client to stakeholders, to use knowledge, to
apply skills and experience to help fulfill purpose and create positive movement.

1.4. Vision
Ernst & Young teams work to advance technology, efficiency and innovation throughout business
operation. The faster permanent innovation leads to higher quality, advanced products and processes with
larger margins. The dramatic increase of globalization results in the new markets for merchandises and
services, originating tension on emerging market business to compete for innovation as well as price. It
also lead to major shifts in consumer markets, tax policy and workforce diversity. Technology is
connecting people together, spreading knowledge, saving time and freeing up resources. The advent of
Internet has revolutionized numerous domains of manufacturing, including real-time tracking of output,
better quality measurements and productivity of production. Manufacturers should be integrating today in
the emergence of artificial intelligence, blockchain and robotics. The convergence of these cutting-edge
technologies will transform the manufacturing company fundamentally. A new workforce is being
launched with the aptitude to adapt these technologies.

2. The SWOT analysis and organizational strategy

2.1. The SWOT analysis

A SWOT analysis is a framework which creates production and business strategy of a
company. It is used for analyzing the orientation and a competitive position of a company in its
business environment. SWOT stands for “Strengths, Weaknesses, Opportunities and Threats”,
respectively. This important tool can be used by Ernst & Young to evaluate the internal factors
which are strengths and weaknesses whereas opportunities and threats are the external ones. The
main purpose of SWOT analysis is that Ernst & Young is able to develop its strengths, eradicate
its weaknesses while seeking opportunities and avoiding threats.

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Strengths
Weaknesses
1. A strong financial position
with positive revenue 1. Lack of choice in the
2. A well-qualified labor force product range
3. A strong presence on social 2. Property is used on rent
media accounting for a high
proportion and rental charges
4. A large product portfolio need to be paid
5. A strong distribution 3. Out-of-dated data of
network with numerous customer information
outlets
4. High employee turnover
6. A low-cost structure rate
7. Reliable partnerships

Opportunities
Threats
1. An increase in the number
of internet user all over the
1. Competition within the
world.
industry is increasing
2. An increase in education
2. Adaption of rapid
and training staffs.
technological changes
3. Growth in environmentally
3. Regulatory non-compliance
friendly manufacturing
process. 4. Stolen valuable information
4. Global locations

The SWOT analysis of Ernst & Young

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Strengths
Ernst & Young is considered one of the leading firms in its industry because Ernst &
Young has a range of strengths that make it successful in the market place. Ernst & Young has a
strong financial position with positive revenue. Yvonne (2019) claims that,
“Ernst & Young today announces record combined global revenues of US
$36.4 billion for the financial year ended June 2019. Overall, financial
year 2019 revenues grew by 8.0% in local currency (versus 7.4% in
financial year 2018). Over the last six years, Ernst & Young has recorded
strong 8.3% compound annual growth and at local currency rates has
added nearly US $15 billion in combined revenue and more than 100,000
Ernst & Young people.”
Williamson (2018) states those employees are professionally trained resulting in a
workforce who is not only well-qualified but also motivated to achieve more. In 2018, Ernst &
Young spent more than 500 million dollars on training work experiences and people received 13
million hours of formal education. This company is increasingly investing in online learning to
provide more than 2,500 courses about a broad range of business topics. Besides, the IT system
is competent which usually ensures the productivity in its operation. In addition, Ernst & Young
has widespread access on social media with more than thousands of people using the most three
famous applications: Facebook, Instagram, and Twitter. For instance, the Ernst & Young global
page on Facebook has more than 400.000 “likes” and more than 35.500 subscribers on YouTube
in 2019. There is a large product portfolio which contains various unique categories. Ernst &
Young’s low cost structure help the company produce at a low cost and sell its products at a low
price, making them affordable for its customers. Its product still has good quality that customers
are willing to pay for the worth price. Moreover, Ernst & Young understand all of their
customers which means the company knows clearly about their identities and their demand. By
doing this, the company can build customers loyalty for long-term sustainable growth. Therefore,
the company with its dedication to customers has ability to get a high level of customer
satisfaction. In addition, Ernst & Young may not thrive on the competitive market without
reliable partnerships. For instance, alliance with Procter & Gamble who has outstanding
manufacturing capabilities helps to achieve higher levels of manufacturing performance by
various methods. The company also has cooperated with Blackline for over 15 years. Ernst &
Young and Blackline together help clients such as: cut down on risk, make preparation to face of
global accounting challenges and the change of business conditions. The locations also become
one of the firm’s advantages which means it consists of global leadership, governance bodies
and three geographic Areas (Americas; Europe, Middle East, India and Africa (EMEIA); and
Asia-Pacific.). As a result, Ernst & Young can make up its mind rapidly, implement its strategy
effectively and provide its local knowledge globally basing on a diverse workforce from 700
office branches in over 150 countries. Thanks to a strong distribution network supporting
numerous its outlets in almost every state, Ernst & Young confidently claim that its products are
usually available meeting the demand of clients in time.

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Weaknesses
In spite of plentiful benefits, Ernst & Young still has some drawbacks that brake its
development. In terms of the product, there are gaps in the product range supplied by the
company. Even though selling product is successful, this lack of choice can defeat its position in
the market place. Ernst & Young also has a high intension of day sales inventory because the
time it takes for purchasing and selling products are higher than the industry average which
means Ernst & Young adds unnecessary costs of inventory to its business. The amount of current
assets is lower than the current liabilities because the property Ernst & Young own is rented
accounting for a significant percentage compared to the purchase one, meaning that it is easy to
cause liquidity problem with low quick ratio in its operation system and the company must pay
for the rental charges. This firm is known as a caring service company because Ernst & Young
always find out customer information. However, according to a survey of Williamson (2018),
this company has not carried out market research for two years. As a result, the company only
can deal with its work basing on two-year-old data while the demand for customers has changed
constantly over time. Although the geography is defined as an advantage of Ernst & Young, the
workforce is most local workers. Consequently, it is hard for people who have racial
backgrounds to perform well at workplace, causing loss of good talent.

Opportunities
Despite all the weaknesses, Ernst & Young still positively discover and create its own
opportunities. In recent years, technology has developed sharply contributing to an increase in
the number of internet user all over the world. A survey done by Kemp (2019) demonstrates that
there is 4.39 billion internet users in 2019, an increase of 366 million (9 percent) compared to the
number of internet users in January 2018. This means that there is an opportunity for Ernst &
Young to interact with its customers, showing its strengths to attract them on the online platform
and collect feedback from them. Because technology allows better data to be gathered on clients
and enhance on marketing attempts, Ernst & Young intends to invest one billion dollars in new
technology solution and customer services for the next two years. This investment has opened
new sales channel for Ernst & Young. Machine learning and Artificial Intelligence (AI) boom is
transforming the technology landscape that Ernst & Young operates in, bringing a lot of benefits
among many departments. For instance, Ernst & Young put robots, algorithms and machines to
work effectively. The company has created 1.300 robots for customers and 700 robots to use
within Ernst & Young. 2.1 million hours of repetitive missions have been saved by those. Ernst
& Young has got involved in 21 strategic coalitions with technology and industry leaders.
Furthermore, it is an opportunity for Ernst & Young to practice distinct pricing strategy in the
new market. It will enable the firm to maintain its loyal customers with great service and attract
new customers through other value oriented propositions. On the other side, increasing in
education and training by many institutes leads to grow the amount of skilled labor available
within the country. If Ernst & Young is able to hire skilled workforce, it will save the training
expense as much as possible. The more professional employees are hired, the more opportunities
are created to promote Ernst & Young. In 2017, approximately 2 million people around the
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world applied for jobs at Ernst & Young proving the attraction of this global firm. Ernst &
Young hired almost 65,000 people, which figures out that a person is hired every eight minutes
on average around the clock, 365 days a year. Moreover, global locations help hire people with
distinct backgrounds easier. It not only brings different methods to solve problems but also
encourages other team members to recognize and value these diverse perspectives. This can
disrupt “groupthink” and challenge teams to come up with new solutions to difficult problems
(US Americas, 2019). In recent years, people tend to be more aware of their health. As a result,
Ernst & Young should take responsibility for their manufacturing process to build on customer
trust. The firm makes an effort to use technology, especially high-end video conferencing in
order to cut down on its air miles and paper waste considerably. This approach help Ernst &
Young decrease its greenhouse gas emissions from 5.23 tons to 4.89 tons each person this year
(Global review, 2019).

Threats
Facing with threats during the development process of Ernst & Young is unavoidable.
Ernst & Young has a large number of competitors in the competitive market, especially famous
accounting firms such as Deloitte, PricewaterhouseCoopers (PwC) and KPMG. Mazareanu
(2108) analyzes that this company is the third largest company of Big4 following PwC and
Deloitte closely. In 2018, the revenue of KPMG reached to 28.96 billion US dollars that makes
this firm not far behind the 34.8 billion generated by Ernst & Young. In addition, this firm also
faces competition from tier two companies who are Cap Gemini and Grant Thornton. These
competitors can affect Ernst & Young’s business as the company has to lower its service cost to
attract clients. In near future, increasing in the demand for various types of accounting and
auditing services may put bigger firms under costing pressure. Besides, the company is expected
to concentrate on adapting rapid technological changes to compete with the competitor’s
services. This global phenomenon may make the company’s products and services obsolete if
they are not enhanced frequently. Ernst & Young provides four types of integrated services
which are Assurance, Advisory, Tax and Transaction Advisory Services. These services require
complicated data collection, processing systems, software and other advanced technology to
operate smoothly. Consequently, Ernst & Young needs to always upgrade its technology to meet
the demand of clients. Any difficulties in adopting changes can postpone or prevent the design,
development, marketing of the products and services from being successful. While CEOs carry
out artificial intelligence with enthusiasm and hope it promotes their businesses, the survey
reveals that employees have nearly opposite attitude. According to respondents, there is a
moderate proportion in employee reliability, accounting for 33% compared to 87% of CEOs and
business leaders who trust to use artificial intelligence. This means it becomes one of the greatest
obstacles to adopt this technology. To convince employees to feel optimistic about artificial
intelligence, it is essential to emphasize two main factors which are reliability and performance
with 44% and security with 38%. Those leads to an organization’s trust of artificial intelligence
Because of widespread geographic locations all over the world, regulatory non-compliance
becomes a preoccupation. Such circumstances can disturb its business continuity. Furthermore,
due to having various offices located globally, the passing of information is done virtually. If the

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Ernst & Young’s security system is not strong enough, criminals can be able to hack into its
database to steal valuable information.

2.2. Organizational strategy

Strengths Weaknesses

SO Strategy WO Strategy
Using its presence on social media for Updating data of customer
marketing and attracting customer basing information (W3, O2).
on its website with environmental strategy Not difficult to deal with this
Opportunities (S3, O1, O3).
problem because of having the
High level of efficiency products thanks to large number of workforce (W4,
the innovative technology (S2, O2). O4).
An increase marketing place to attract
consumers, serving by professional
employees (S1, S5, O2).

ST Strategy WT Strategy
Reach out to customers and show the Increase welfare and provide a
advantages (S4, T1). better work environment to retain
Invest in intellectual property rights (S3, talent (W4, T1).
Threats T1). Apply technology to create a
Not spending much time on training software that can automatically
employees how to use technology (S2, T2). updates customer information
constantly (W3, T2).

Combinated Strategy by SWOT analysis

Ernst & Young has to generate a strategy for long-term growth of sustainability, hoping
that the company makes an effort to attain the leading position within Big4. The firm is able to
leverage the popularity of social media to advertise its brand. The company should create more
monopoly websites with exclusive information for customers. They should contain the
professional knowledge as well as the part of protecting the environment, making sure always be
accessible. Ernst & Young continues to work best with these browsers who are Firefox, Google
Chrome and Safari. By doing this way, the company can be confident of competing with its
competitors. Because of applying artificial intelligence to manufacture, Ernst & Young has a
high level of productivity. The company ought to use technology to create new product with
higher quality and follow their customer’s activities. For instance, the company can establish

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Cookies software as it has many helpful functions. By setting up Cookies, the firm can keep
track of the preferences of its customers. It can also store personal information and once
customers leave the site, the session cookie disappears. In terms of the old data, Ernst & Young
has to initiate immediately its own solution. The firm should use technology to create a software
that can automatically updates customer information constantly. This business must ensure that
the customers' records are maintained and updated. The basic information that should be updated
includes the customer's name, address, phone number, fax number and email address. The
company always makes sure that there is no gap in its IT system because hackers easily damage
or steal important data. Thanks to the enthusiasm of employees, it not takes much time to train
them how to use technology expertly. Additionally, the firm can also use its strong financial
position to invest in intellectual property rights. This would help compete with increasing
competition in the market. Loss of talent is one of the most major concerns for Ernst & Young.
The business should expand the scale of different geographies in many parts of the world in
order to select various kinds of people. Thus, this firm can also internally avoid ethnic
discrimination. Due to the rapid increase of attrition rate in workforce, the company has to pay
much more money than its competitors for hiring, training and developing its staffs. Besides,
workers easily tend to be stressful owing to the actual amount of work requires more workers.
Ernst & Young needs to have a reasonable policy to treat its workers with welfare. For example,
more staffs should be hired so work can be distributed equally. Additionally, Ernst & Young
should have one or two more days off for resting. This approach can fulfill themselves and make
them work for Ernst & Young productively.

3. Organization’s structure of Ernst & Young

3.1. Organizational Chart

A global leadership teams of Ernst & Young is able to set up a global strategy and agenda.
Thanks to this managerial structure, the team can make up their decisions and support special
customer service for clients to do business anywhere all over the world. The Global Executive is
its most chief management body and concentrates on carrying out strategy, execution and
operations. Its members have all the factors of the company’s global organization, consisting of
functions, service lines, geographies, committees and partner on rotation. The service lines
landscape of Ernst & Young is divided into four different service fields such as: Assurance, Tax
Advisory, Transactional Advisory Services, Advisory Services, in which each service is
specifically composed of subsidiary services. Although some services structure can be different
between Ernst & Young branches around the world, the mentioned structure is the most adequate
to operate throughout the process.
The organizational structure of Ernst & Young is clarified through distinguished aspects
sush as the operation of service lines regarding the task involved and the hierarchy of global
executive as the chart as followed.

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Tax Assurance Advisory Tranastion

advisory services

Tax planning Audit Emerging tech Strategy services

Tax accounting and

Big data and
risk advisory Audit quality Corporate finance
analytics
services

Tax compliance EY Digital Audit Customer Buy and integrate

Financial
Tax function
Accounting Cybersecurity Sell and separate
operations
Advisory Services

Forensic & Performance

Law Reshaping results
Integrity Services improvement

Climate Change
People and Digital M&A
and sustainability Risk
workforce framework
services

Private client Infrastructure

US tax reform Strategy
services advisory

EY reporting

Sustainable impact
hub

Organizational structure identified by Departmentalization

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EY Global Chairman and CEO

EY Global Managing Partner – Client Service

EY Global Managing Partner – Business Enablement

EY Global Vice Chair - Talent

Functions
EY Global Vice Chair -
Markets

EY Global Vice Chair -

Assurance

EY Global Vice Chair -

Advisory
The Global
Service lines
Executive
EY Global Vice Chair - Tax

EY Global Vice Chair

Transaction Advisory Services
EY Americas
Managing Partner

EY Asia-Pacific Area
Managing Partner
Geographies
EY EMEIA (Middle East, India and Africa)
Area Managing Partner

EY Japan Managing Partner

EY Global Accounts Committee Chair

Chair of the EY Global Emerging Markets

Committees
Committee

EY Global Emerging Markets Committee

Member

Organizational Structure identified by Span of Control

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3.2. Acknowledgement regarding the present Board of Ernst & Young

Global Executives
The Global Chairman and CEO for Ernst & Young is Carmine Di Sibio. He works as
Ernst & Young Global Managing Partner - Client Service, directing the implementation of the
company’s global strategy, its four geographic areas and four service lines before being
nominated to this current position. His assistant to set up the Global Innovation team to orientate
the scheme in applying technology for transformation of existing services and come up with new
resolutions.
Another person in global executives is Andy Baldwin, who is responsible for the
execution of Ernst & Young global strategy with overall responsibility for its three geographic
areas and four service lines in the position of Ernst & Young Global Managing Partner — Client
Service. He is proficient in the financial services industry, with in-depth knowledge about the
European market and insurance sector. He takes the lead of various post-merger integrations,
organizational restructuring and technology-enabled business transformations.
Lou Pagnutti, Ernst & Young Global Managing Partner – Business Enablement, is at the
helm of Ernst & Young services and function throughout the world. His responsibility is to
administer global strategy and implementation for all tasks which consists of risk management,
finance, shared services, legal, procurement and technology. His involvement in the community
is to construct a professional working environment and make a difference. He has served as a
member in the Board of not only the Sunnybrook Hospital Foundation but also Pathways to
Education where he started the career as Pathway's National Volunteer Partner in Ernst & Young
in Canada.

Functions
Trent Henry, theEY Global Vice Chair – Talent, concentrates on the convergence of
talent and markets agendas, including advising on and responding to shifts and opportunities in
the evolution of the integrated workforce. He is an enthusiastic person who promotes accessible
education and support the youth to be successful. He is also a member in the board of Pathways
to Education Canada, and chairs the Ernst & Young Canada Inclusiveness Steering Committee.
Subsequentlt, Jay Nibbe, who is EY Global Vice Chair – Markets, is in charge of
leading Ernst & Young’s go-to-market approach and exceptional client service to all
accounts across all its service lines, sectors and geographies. As part of this role he is responsible
for leading and managing global industry Global Solutions, Alliance Partnerships, Managed
Services, Digital, Business Development and EY global alumni programs.

Service lines
Beginning with Service Lines, Felice Persico leads the Ernst & Young Global Assurance
practice. Possessing an abundance of experience, including serving leading technology

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companies in Silicon Valley, Felice provides a unique viewpoint on how technology can offer a
transformational mindset for customers across all sectors. He holds a master’s degree in Business
Economics from the University of Turin School of Business.
Norman Lonergan - EY Global Vice Chair – Advisory serves clients across multiple
sectors through our vast range of offerings, from cybersecurity to risk transformation. Under his
leadership, people work with leading global businesses to indicate complicated industry
problems and leverage opportunities to develop, enhance and protect their businesses.
Kate Barton - EY Global Vice Chair – Tax - helps organizations develop smart tax
strategies. She is passionate about diversity, women in business and tax tech. As EY Global Vice
Chair – Tax, Kate supervises all factors of EY’s Tax strategy and operations, people
development, client relations, quality control, risk management, thought leadership, knowledge
and learning. She also leads the EY Tax Executive Committee.
Steve Krouskos plays an important role on driving growth and investment priorities for
EY Global Transaction Advisory Services (TAS) and delivering exceptional client service
around the world. He was key to the launch of our Capital Agenda strategy across TAS as EY
Global and EY Americas TAS Markets Leader. He established the Corporate Development
Leaders Network in the US, a highly successful international members-only network of senior
corporate M&A leaders.

Geographies
In terms of geographical factors, there are various regions which are grouped under four
main geographic areas: Americas; Europe, Middle East, India and Africa (EMEIA); Asia-Pacific
and Japan.
Kelly Grier chairs the US Executive Committee and Americas Operating Executive and
represents EY in regulatory relationships. Her leadership portfolio involves membership on EY’s
Global Executive and Global Practice Group. She is regarded as Executive Sponsor for EY’s
focus on diversity and inclusiveness. During her 28-year tenure at EY, Kelly has gained
extensive experience working around the world as a client service partner and senior advisor on
Fortune 500 Audit and Advisory clients. At the present, she is a senior advisory partner on
several of EY’s largest accounts.
Patrick D. Winter is EY Asia-Pacific Area Managing Partner, who is committed to
exceptional client service and leading EY cross-border cooperation. With his strong transactions
and corporate finance experience, he has led several due diligence and IPOs for many emerging
and fast-growing companies. He also spearheaded various growth initiatives and increased
capabilities through strategic acquisitions, which brought key data analytics and cyber-security
advisory capabilities.
As EY EMEIA Area Managing Partner, Julie Linn Teigland is at the helm of
international tax advice, auditing, advising large clients and accompanying business
transformations. She have approximately three decades of experience in professional services for
international clients to accompanies them in transformation processes, focusing on the challenges
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of digital transformation and is committed to the sustainable development and their framework
conditions.

Committees
Alison Kay joined EY in 2007 after an 18-year career in the utilities sector. Prior to her
comtemporary position, she was the EY Global Vice Chair of Industry, helping world-leading
clients across 16 sectors to meet the challenges of disruption. At the present, as EY Global
Accounts Committee Chair, Alison takes the lead of coordinating high-quality service to EY's
largest clients.
Rajiv Memani who is Chair of the EY Global Emerging Markets Committee, connecting
emerging markets with developed markets and each other so that emerging markets’ voices are
considered in key decisions. He is also the Chairman and Regional Managing Partner for EY
India, advising customers across sectors and worked closely with several of the largest
conglomerates in India. Prior to his current role, he founded EY India’s market-leading
Transaction Advisory Services.
Albert Ng is EY China Chairman, EY Greater China Managing Partner and EY Global
Emerging Markets Committee Member. He is the pioneer in China investment advisory, having
a broad knowledge of China’s Belt and Road initiative and state-owned enterprise reform. Albert
holds various advisory roles in government and professional bodies such as Advisor on
Accounting Matters to the Ministry of Finance of the People’s Republic of China; Advisor to the
International Business Leader‘s Advisory Council for the Mayor of Shanghai; member of the
Shenzhen Committee of the Chinese People’s Political Consultative Conference; and President
of the Hong Kong China Chamber of Commerce.

4. Ernst & Young’s leadership

4.1. Organization’s heroes: The Global Executive

It is undeniable that Ernst & Young possess an international leadership team that sets a
single global tactics and agendas. The effective structural management empower this
multinational professional services firm to make decisions and support exceptional client service.
The Global Executive is most substantial senior management body which extensively control
strategy, execution and operations. Its members bring the integrated segments of global
organization, consisting of functions, service lines, geographic areas and committees.

Carmine Di Sibio: Ernst & Young Global Chairman and CEO

Carmine is the Global Chairman and CEO of Ernst & Young, one of the hugest
professional services organizations in the world with approximately 270,000 people in more than
150 countries. Carmine was Ernst & Young Global Managing Partner – Client Service,
spearheading the international scheme in different geographical regions and primary service lines

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before being voted to his contemporary position. Carmine has led modern transformations,
comprising the amount of one billion USD investment for new technology solutions over a two-
year timeframe reported in August 2018. He contributed to establish the Global Innovation team
to identify the conversion of existing services and formation of working method with the utility
of new technology. He has helped to broaden Ernst & Young's offerings in a wide range of
evolving fields as a pioneer in acquisitions and partnerships strategy. In his position, Carmine
entitles people at Ernst & Young to use the power of the global organization. He co-chairs the
Ernst & Young Global Diversity and Inclusiveness Steering Committee, which works to
optimize the advantages of distinguishing viewpoints and references to cultures of the workforce.
It is essential to construct the highest-efficient teams in the sector and to flourish prominent
leaders.
He has been an Advisory and Assurance partner for many largest financial services
accounts since joining Ernst & Young in 1985. He has led numerous principal roles such as
Chair of the Global Financial Services Markets Executive and Regional Managing Partner for
the Americas Financial Services Organization (FSO), from which he began to involve in
Regulatory Services and Ernst & Young Risk Management. Carmine graduated from Colgate
University as a Bachelor of Art in Chemistry as well as a Master of Business Administration
from New York University’s Stern School of Business. To motivate a long-term concentration in
enterprise which can result in sustainable growth, Carmine also participates in the board of
Focusing Capital on the Long Term (FCLT) and the World Economic Forum (WEF), serving as
a member of its International Business Council. Moreover, Carmine is a delegate of the
Washington, DC-based US Business Roundtable, a member of the Foundation for Empowering
Citizens with Autism and Family Promise, and simultaneously co-chairs the Russia Foreign
Investment Advisory Council (FIAC) with Prime Minister Dmitry Medvedev. Additionally, he is
a member of the Board of Trustees of Colgate University.

Andy Baldwin: Ernst & Young Global Managing Partner – Client Service
As Ernst & Young Global Managing Partner — Client Service, Andy is in charge of the
execution of our worldwide strategy. He has comprehensive accountability for our three
geographic domains and four service lines so that their client servers can supply exceptional
service no matter where their customers are on business. Previously, Andy was Ernst & Young
Area Managing Partner — EMEIA, taking the lead on operating strategic priorities of Ernst &
Young, consisting of renovating the business by leading greater integration across the Area,
consolidating the centralization on profession, accelerating the expansion of new Ernst & Young
offerings and formulating for the future.
After being a personnel of Ernst & Young in 1993, he has served as a senior advisor to a
number of Ernst & Young’s gigantic customers. His knowledge spans the financial services
industry with extensive experience of the European market and insurance industry. He has been
in control of on several technology-enabled business transformations, post-merger integrations
and organizational restructuring. He graduated as a Master of Business Administration in
Finance and Strategy from Cranfield University in the UK, as well as professional qualifications
in marketing and risk from the Chartered Institute of Marketing and Chartered Insurance

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Institute. He is a leader on Corporate Responsibility Governance Council, which focuses on

applying idiosyncratic accomplishments to handle society’s toughest challenges. He also
supports Ernst & Young’s UK Foundation program, Smart Futures, which offers paid work
experience and mentoring to young London students from impoverished province with the
purpose of increasing their opportunities of securing employment in the city.

Lou Pagnutti: Ernst & Young Global Managing Partner - Business

Enablement
Lou is at the helm of Ernst & Young’s services and business functions across the world.
His responsibility is supervising strategy and execution for all functions, encompassing
technology, finance, risk management, legal, shared services, and procurement. In 1981, he
joined Ernst & Young Assurance prior to become a member in Ernst & Young Tax team in 1986.
He was in charge of Ernst & Young Canada International Tax Services in the period between
2000 and 2004.
In the following stage, he was Ernst & Young Canada Managing Partner and joined the
Ernst & Young Americas Executive Board from 2004 to 2010. After that, he became Ernst &
Young Asia-Pacific Area Managing Partner in the next 3 years. Lou has an Honors Bachelor of
Commerce degree from Laurentian University. In 1983, he held his Chartered Accountant
designation and was honored with a Fellow Chartered Accountant designation in 2006. Lou has
served on the Sunnybrook Hospital Foundation and Pathways to Education boards. He
commenced with the position in Ernst & Young Canada as National Volunteer Partner of
Pathways to Education, a campaign dedicated to support high school students whose modest
earnings to complete high school and pursue post-secondary education.

4.2. Objective approach to organization’s heroes

Ernst & Young have accomplished staff and professional global executives that run the
corporation effectively. They can be regarded as principle elements to the development and
sustainability of Ernst & Young. Are they really the organizational heroes? According to Daft
(1995), in the world of organizations, heroes are models or ideal symbols for serving cultural
norms and values. The contribution from their achievement is not uncommon whether written or
spread word of mouth, they can help to clarify major organizational values and assist in
socializing organizational culture throughout successive generations (Trice and Beyer, 1984). It
is widely accepted decisions and choices are usually made by leaders of a company, which will
eventually affect the success of an organization, resulting in the fact that people in leadership
positions are considered as the hero in an organization’s story. Nevertheless, an intensive
examination of the hero’s story has been carried out with the discovery that the real hero of an
organization are not just those who man the helm. It is actually employees who are under
controlled by the strategies for the development of the managers.
Heroism is conceptualized in the Webster's New Intercollegiate Dictionary as 'extreme self-
sacrificing courage especially in fulfilling a high purpose or attaining a noble end’. In particular,

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employees are the individuals who are in charge of implementing the board of directors’ plans so
that it’s critical to resonate the perception between the staffs and supervisors. Creating value and
meaning in others in addition to just one highest position means a great deal since the progress
has impacts on the comprehensive organizational performance. It refers to actions taken by an
individual, for the sake of an interest or objective which is larger than his or her task
performance, requiring attention, perseverance and commitment that are significantly beyond the
expectation of the individual in his or her position. Every enterprise need motivated employees
to survive and prosper, especially during the transformative period. For this reason, employees
and teams are the most precious properties of an organization and conserving them is
undoubtedly essential for the sustainable future.

4.3. Motivational environment in Ernst & Young

It is essential for companies in all scales to attract and retain accomplished workers and to
reinforce competitive strength in the transformative market. Understanding appealing elements
to create a motivational environment for talented recruits which contributes to the competent
generation for human resources. Since competition for highly proficient employees is growing
almost as dramatically as the competition for customers’ preference (Berthon, Ewing and Hah,
2005), enterprises desire to be seen as fascinating employers for potential applicants and
contemporary staffs. For this reason, providing a motivational environment is indispensable for
every economic entity, especially for a gigantic multinational firm as Ernst & Young. Ernst &
Young’s first remarkable strategy is to give hope to who have lost theirs. Ernst & Young Global
(2018) claim that engaging people from distinguishing backgrounds, such as refugees, not only
valuable contributions is added for themselves and society and but also for business and the
entire economy when they integrate into the workforce. This can be illustrated by the moment
that the person named Mohammad Basel Alyounes was being asked by a German TV crew about
what he hoped for his new life in Germany following his 2,300-mile journey to Berlin, the Syrian
accounting graduate pronounced: “I want to work for Ernst & Young.” Fortunately for Basel,
Robert Jung, an Ernst & Young senior manager who had led the team that established Ernst &
Young’s German Diversity Charter refugee support team, was watching the broadcast and
immediately decided to find and bring him to the office. Just in one-week time, Basel had been
taken on as part of Ernst & Young Germany’s pilot internship program, together with 10 other
refugees. Basel is now a complete employee within Ernst & Young’s Audit Service Line as well
as two other refugees from the original program. It is undeniable that people from different
backgrounds produce a vast range of ideas and approaches that are key to innovation, and diverse
teams can anticipate disruption, as they see the world from a wide assortment of various
perspectives. Furthermore, people from unpalatable conditions had already overcome far greater
obstacles than anyone would encounter in the workplace, meaning that they have often attained a
certain level of resilience and adaptability.
Additionally, to ensure that the workforce are ready for the future, Ernst & Young Badges
Program incentives employees to learn “hot” skills like Artificial Intelligence (AI), data
analytics, and robotics by providing the opportunity to earn digital credentials. The four levels of
Ernst & Young badges (bronze, silver, gold, and platinum) are earned through world-class

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learning, fulfilling required experiences, and making a contribution to learning through coaching
or training others and thought leadership. Ernst & Young is the first professional services
employer to offer digital badges globally to its people in this way and the program is tailored to
individual career goals. The badges are featured on employees’ social media channels and are
used to match Ernst & Young people with relevant projects. The Ernst & Young badges program
ultimately equips the workforce with future-focused skills that help their clients overcome
challenges and thrive in a rapidly changing world. Increasingly, the biggest challenge from a
learning & development perspective is keeping up with the fast pace of change. Udemy for
Business, an online learning provider, helping employees by entitling them to access on-demand,
highly curated, and up-to-date learning content in hot skill areas like AI and analytics. One of the
things Ernst & Young also trying to do is democratize access to learning. They want to enable
people to learn by centralizing learning in one place and making it both accessible and engaging.
They listen to people’s preferences as well: how do they like to learn? What do they want to
learn? Before purchasing Udemy for Business licenses, it is discovered that staff at Ernst &
Young were learning on Udemy on their own and paying for it themselves. But building your
learning catalog is not enough. It’s also about selling learning to people. Staff are constantly
competing with their essential day-to-day tasks. The learning team relies on marketing strategy
to raise awareness and interest. As well as other marketing campaign, it needs to adapt with the
business. Ernst & Young also get buy-in from managers to encourage them to study what they
are most enthusiastic about, even if it may not be directly related to their current role.
Turning to another aspect of Ernst & Young motivational environment, there a branch
under Ernst & Young called Ernst & Young Presents, a program which helps Ernst & Young
workforce and the wider community to develop confidence and skills in public speaking. Some
organizations have stressed that oral communication and presentation skills are among the top
qualities needed when employers consider to hire employees as a central competency (Maes,
Weldy & Icenogle, 1997). This is not surprising if considering that workers who possess
outstanding oral communication and presentation competencies achieve higher performance
ratings and are more successful (Penley, Alexander & Jernigan, 1991). In a constant-developing
community as today, Schlee1 and Harich (2010) found that oral communication skills are the
most fundamental skills that employers require. Oral communication dominates the list of
practical skills and refer to most requested for entry-level jobs (85%), and is even more
necessary for higher-end jobs (92%) (Schlee1 & Karns, 2017). For this reason, Ernst & Young
Presents was founded in 2013 to implement the role of holding meeting once a month to give
Ernst & Young employees the opportunity to practice their speaking skills without the tension of
any high-stakes environment. It is an organization which provides trainings for public speaking,
networking and presentation skills for both insiders and outsiders of Ernst & Young. Through
about three prepared and five impromptu speeches per meeting, Ernst & Young people and
corporate sponsors can interact with each other, provide support and receive helpful feedback on
their strengths and weaknesses. Even attendees who never get up to speak can learn valuable
lessons from those brave enough to get on stage. The team has used its popular teaching methods
to reach out to the greater Chicago community, working with groups ranging from female
entrepreneurs to valedictorians of inner-city schools to help them improve their speaking skills.
Through their work with various organizations, the team is also helping the unemployed build
their networking and presentation skills to empower them in their job search. Ernst & Young

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treat individual as a unique and idiosyncratic entity. With a culture of mentoring and support,
driven by dialog and conversations, the board of executive invests in the employees’ career as
much as they do.

5. Operational scheme of Service Lines in Ernst & Young

Ernst & Young is an international professional service organization which has a
complicated operation of service lines so it can take people quite a while to understand how this
organization works. To illustrate, a diagram of services provided by the organization is indicated.
There are four primary service lines at Ernst & Young - Assurance, Advisory, Tax and
Transactions Advisory Services.

Advisory Tax

Transaction
Assurance Advisory
Operation Service
of Service
Lines

Ernst & Young Service Lines

Assurance
It includes understanding the key business and financial risks facing their clients and the
markets they operate in, reviewing processes, designing tests and verifying accounting
treatments and numbers, all whilst complying with accounting and auditing standards. Ernst &
Young auditors will provide independent verification of their client's compliance with
accounting principles to help companies accurately reflect their financial situation - an essential
function to rebuild trust in financial markets. Nowadays, businesses have to encounter intricate
challenges when they deal with the requirements of international accounting standards and
constant-changing corporate structures. Ernst & Young Assurance staff will help companies
address a wide variety of these challenges. Regulatory requirements especially are becoming
more complex and in order to be able to meet all requirements, Ernst & Young creates
transparency and provides a clear perspective to audit committees as well as providing critical
information for stakeholders.

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Advisory
It is the consulting branch of Ernst & Young. Ernst & Young’s Advisory Services have
one common goal: “Making the client better”. This philosophy crosses all advisory services that
are offered by Ernst & Young and builds the base for the three pillars that are responsible for
profitability of a company: company performance, risk management and information technology.
The Advisory Services is divided into three major service blocks: Performance Improvement
(PI), Risk & IT and Strategic Direction. Their clients rely on Advisory team’s expert knowledge
to address a broad range of issues across a variety of industries. Ernst & Young offer guidance to
companies looking to grow or change, or improve performance. During advisory projects, all
teams follow the same EY specific methodology. Some management consultancies are
developing business strategies while other consultancies are specialized in methodologies. The
advisory practice of Ernst & Young is focusing on the improvement of clients overall business
performance while strategy papers will be turned into reality and will be implemented in the
running of the business. With a high degree of industry experience from consultants over the
world, Ernst & Young helps clients to identify potential, minimize risks and increase efficiency
sustainably. Advisory is a fast-moving, high-growth area that reflects the challenges and
uncertainty of today’s world. They will assist their clients with operational and strategic
challenges, product development and risk functions. Implementation of regulatory changes will
be spanned such as Solvency II, finance and risk transformation, assurance and attest roles, and
restructuring transactions.

Tax
Offers one of the most exciting, challenging and rewarding careers out there. Enterprises
today face increasingly complex tax and regulatory changes, which means the role as trusted
advisors is more important than ever. The clients rely on Tax team’s extraordinary understanding
to best manage their assets and ensure they are being taxed properly. The international
coordinated tax professional offers connected services across all tax disciplines to help business
thrive in an era of rapid change. Ernst & Young staffs combine exceptional knowledge and
experience with the people and technology platforms that make them an ideal partner for tax-
related problems. They has competencies in business tax, international tax, transaction tax and
tax-related issues associated with people, compliance and reporting. Ernst & Young supports
clients to manage and understand their tax compliance, reporting requirements and obligations.
Tax function’s processes, controls and risk management will be assessed, improved and
monitored in order to maintain effective and reliable relationships to tax authorities.

Transaction Advisory Service (TAS)

Have a particularly exciting job of advising clients on when and how to buy, sell or merge
companies in order to improve growth, competitiveness and profitability. TAS supply the data,
highlight the risk and guide the client through the potentially perilous forest of capital

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transactions. Corporate Finance Strategy (CFS) is consistent with global big bets for TAS, in
particular, Transaction Strategy and Operations (TSO) to support clients and build stronger
relationships by bringing them into conversations and the transaction life cycle earlier. Ernst &
Young also provide Mergers and Acquisitions advice to institutions engaging in mid-market
transactions in the financial services sector, helping clients assess the strategic fit of a business
by evaluating potential synergies, project managing the transaction steps, assisting in
negotiations and financial models, and measuring transaction implications. They supports
companies to improve their decision making process regarding strategic management of capital
and transactions within a changing environment. In addition, they help client buyers and sellers
make informed decisions and execute transactions while focusing on their capital agenda to
improve their outcomes. Building effective business models to evaluate a new transaction is a
considerable contribution of Ernst & Young, opening a new market opportunity or for other
strategic purposes to develop vigorous financial models and support key decisions to improve
strategic outcomes.

6. Summary
The Ernst & Young (abbreviated as EY) is one of the gigantic professional service
organization in the world as one of the Big4 accounting firms that covers different kinds of
services varying from assurance, tax, advisory and transaction advisory service. The
organizational structure of Ernst & Young is consisted of the global executive and a variety of
regions. The Executive is composed of global leadership, governance bodies and four geographic
areas. They cooperate and coordinate to oversee the systematic strategy, brand, operation,
business planning, investments and priorities. This consistent structure is streamlined allowing
Ernst & Young to make decisions quickly, execute their tactics and provide exceptional client
service efficiently throughout the globe.

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