University of Johannesburg
College of Business and Economics
Department of Business Management
for the degree
BCom (Honours) Strategic Management
Govender Devaksha 200929183
Mbamba Erwan 215032657
Ngobeni Valentine 218069895
Nkuna Joshua 217093143
Sibanyoni Lungile 215013084
Somerset Bruce 216087169
Dr. Makka07 May 2018
Table of Contents
TOC o “1-3” h z u INTRODUCTION PAGEREF _Toc513461592 h 3QUESTION 1 PAGEREF _Toc513461593 h 91.1 Vision, mission, and Value of Deloitte PAGEREF _Toc513461594 h 91.2 SWOT Analysis PAGEREF _Toc513461595 h 101.3 Resources and Capabilities of Deloitte PAGEREF _Toc513461596 h 121.4 Deloitte’s Value Chain analysis PAGEREF _Toc513461597 h 141.5 Porter’s Five Force Analysis for the accounting industry PAGEREF _Toc513461598 h 171.6 PESTEL Analysis for Deloitte Africa PAGEREF _Toc513461599 h 20QUESTION 2 PAGEREF _Toc513461600 h 252.1 Ensuring quality (Deloitte, 2017:52). PAGEREF _Toc513461601 h 252.2 Become a premier career destination (Deloitte, 2017:58). PAGEREF _Toc513461602 h 272.3 Accelerate growth and innovation (Deloitte, 2017:65). PAGEREF _Toc513461603 h 282.4 Improving the client portfolio (Deloitte, 2017:70) PAGEREF _Toc513461604 h 322.5 Establish lean operations (Deloitte, 2017:72). PAGEREF _Toc513461605 h 333.1 Ethics PAGEREF _Toc513461606 h 363.2 Procedure for environmental sustainability PAGEREF _Toc513461607 h 383.3 CSR at Deloitte PAGEREF _Toc513461608 h 41QUESTION 4 PAGEREF _Toc513461609 h 46RECOMMENDATIONS PAGEREF _Toc513461610 h 55REFERENCES PAGEREF _Toc513461611 h 58
INTRODUCTIONWho is Deloitte?
As per Deloitte’s website, in 1845, William Welch Deloitte opened an office in London. Deloitte was the first person to be appointed an independent auditor of a public company, namely the Great Western Railway. He went on to open an office in New York in 1880.
In 1896, Charles Waldo Haskins and Elijah Watt Sells formed Haskins ; Sells in New York.15 It was later described as “the first major auditing firm to be established in the country by American rather than British accountants.
In 1898, George Touche established an office in London and then, in 1900, joined John Ballantine Niven in establishing the firm of Touche Niven in the Johnston Building at 30 Broad Street in New York.
On 1 March 1933, Colonel Arthur Hazelton Carter, President of the New York State Society of Certified Public Accountants and managing partner of Haskins & Sells, testified before the U.S. Senate Committee on Banking and Currency. Carter helped convince Congress that independent audits should be mandatory for public companies.
William Welch Deloitte, founder of Deloitte
In 1947, Detroit accountant George Bailey, then president of the American Institute of Certified Public Accountants, launched his own organization. The new entity enjoyed such a positive start that in less than a year, the partners merged with Touche Niven and A. R. Smart to form Touche, Niven, Bailey & Smart. Headed by Bailey, the organization grew rapidly, in part by creating a dedicated management consulting function. It also forged closer links with organizations established by the co-founder of Touche Niven, George Touche: the Canadian organization Ross and the British organization George A. Touche. In 1960, the firm was renamed Touche, Ross, Bailey & Smart, becoming Touche Ross in 1969. In 1968 Nobuzo Tohmatsu formed Tohmatsu Aoki & Co, a firm based in Japan that was to become part of the Touche Ross network in 1975. In 1972 Robert Trueblood, Chairman of Touche Ross, led the committee responsible for recommending the establishment of the Financial Accounting Standards Board.
In 1952, Deloitte merged his firm (by then known as Deloitte, Plender, Griffiths & Co.) with Haskins & Sells to form Deloitte Haskins & Sells.
In 1989, Deloitte Haskins & Sells merged with Touche Ross in the USA to form Deloitte & Touche. The merged firm was led jointly by J. Michael Cook and Edward A. Kangas. Led by the UK partnership, a smaller number of Deloitte Haskins & Sells member firms rejected the merger with Touche Ross and shortly thereafter merged with Coopers & Lybrand to form Coopers & Lybrand Deloitte (later to merge with Price Waterhouse to become PwC). Some member firms of Touche Ross also rejected the merger with Deloitte Haskins & Sells and merged with other firms.18 In UK, Touche Ross merged with Spicer & Oppenheim in 1990.
At the time of the US-led mergers to form Deloitte & Touche, the name of the international firm was a problem, because there was no worldwide exclusive access to the names “Deloitte” or “Touche Ross” – key member firms such as Deloitte in the UK and Touche Ross in Australia had not joined the merger. The name DRT International was therefore chosen, referring to Deloitte, Ross and Tohmatsu. In 1993, the international firm was renamed Deloitte Touche Tohmatsu.
In 1995, the partners of Deloitte & Touche decided to create Deloitte & Touche Consulting Group (now known as Deloitte Consulting).
In 2000, Deloitte acquired Eclipse to add Internet design-based solutions to its consulting capabilities. Eclipse was later separated into Deloitte Online and Deloitte Digital.
In 2002, Arthur Andersen’s UK practice, the firm’s largest practice outside the US, agreed to merge with Deloitte’s UK practice. Andersen’s practices in Spain, the Netherlands, Portugal, Belgium, Mexico, Brazil and Canada also agreed to merge with Deloitte. The spinoff of Deloitte France’s consulting division led to the creation of Ineum Consulting
In 2005, Deloitte acquired Beijing Pan-China CPA to become the largest accountancy firm in China. Just prior to this acquisition Deloitte China had about 3,200 employees. This acquisition was part of a five-year plan to invest $150 million in China. Deloitte has had a presence in China since 1917.
In 2007, Deloitte began hiring former employees of the Central Intelligence Agency (CIA) for their competitive intelligence unit known as Deloitte Intelligence.
In 2009, Deloitte purchased the North American public service practice of BearingPoint (formerly KPMG Consulting) for $350 million after it filed for bankruptcy protection.
Deloitte LLP took over the UK property consultants Drivers Jonas in January 2010. As of 2013, this business unit was known as Deloitte Real Estate.
In 2011, Deloitte acquired DOMANI Sustainability Consulting and ClearCarbon Consulting in order to expand its sustainability service offerings.
In January 2012, Deloitte announced the acquisition of Übermind, a mobile advertising agency. The acquisition marked Deloitte’s first entrance into the mobile application field.
In November 2012, Deloitte acquired Recombinant Data Corporation, a company specializing in data warehousing and clinical intelligence solutions, and launched Recombinant by Deloitte. In February 2013 Recombinant by Deloitte merged with an internal informatics unit (Deloitte Health Informatics) and launched Converge HEALTH by Deloitte.
On 11 January 2013, Deloitte acquired substantially all of the business of Monitor Group, the strategy consulting firm founded by Harvard Business School professor Michael Porter, after Monitor filed for bankruptcy protection.
In 2014 the company introduced Rubix, a blockchain consultancy providing advisory services for clients in different business sectors, including government. In 2016 the company created its first blockchain lab in Dublin. A second hub was launched in New York in January 2017. In 2016, Deloitte Canada set-up a Bitcoin automatic teller machine and equipped a restaurant in its office complex to accept bitcoin as payment. Deloitte CIS partnered with Waves Platform to offering services related to initial coin offerings. Deloitte became a member of the Ethereum Enterprise Alliance and the Hyperledger Project sponsored by the Linux Foundation in May 2017.
In 2016, Deloitte acquired advertising agency Heat of San Francisco, best known for its work Madden NFL from EA Sports and the Hotwire travel website. Heat was the 11th digital marketing agency purchased by Deloitte Digital since its founding in 2012. As of 2016, Deloitte Digital had 7,000 employees. It billed $2.1 billion in 2015, making it one of world’s largest digital agencies.
In September 2016, Apple Inc. announced a partnership with Deloitte aimed at boosting sales of its phones and other mobile devices to businesses. As part of the partnership, the two companies will launch a service called Enterprise Next, in which more than 5,000 Deloitte consultants will advise clients on how to make better use of Apple products and services
In October 2016, Deloitte announced that they were creating Deloitte North West Europe. The Belgian, Danish, Dutch, Finnish, Icelandic, Norwegian, and Swedish member firms will combine with the UK and Swiss member firms to create Deloitte North West Europe. Deloitte, over the next three years, will invest €200m to enhance its services to its global, national and private market clients and to create the best development opportunities. The firm will come into effect on 1 June 2017 and it is estimated to have 28,000 partners and people generating over €5bn in annual revenue. Deloitte North West Europe will account for approximately 20% of all revenue within their Global Network
Deloitte is one of the “Big Four” accounting organizations and the largest professional services network in the world by revenue and number of professionals. Deloitte provides audit, tax, consulting, enterprise risk and financial advisory services with more than 263,900 professionals globally. In FY 2017, the network earned a record $38.8 billion USD in aggregate revenues. As of 2016update, Deloitte is the 6th-largest privately owned organization in the United States
As per reports in 2012, Deloitte had the largest number of clients amongst FTSE 250 companies in the UK and in 2015 Deloitte currently has the highest market share in auditing among the top 500 companies in India. Deloitte has been ranked number one by market share in consulting by Gartner, and for the fourth consecutive year, Kennedy Consulting Research and Advisory ranks Deloitte number one in both global consulting and management consulting based on aggregate revenue.
Name and branding
While in 1989, in most countries, Deloitte, Haskins & Sells merged with Touche Ross forming Deloitte & Touche, in the United Kingdom the local firm of Deloitte, Haskins & Sells merged instead with Coopers & Lybrand (later renamed PwC).44While the full name of the UK private company is Deloitte Touche Tohmatsu Limited, in 1989 it initially branded itself DTT International. In 2003, the rebranding campaign was commissioned by William G. Parrett, the then-CEO of DTT, and led by Jerry Leamon, the global Clients and Markets leader.
According to the company website, Deloitte now refers to the brand under which independent firms throughout the world collaborate to provide audit, consulting, financial advisory, risk management, and tax services to selected clients
In 2008, Deloitte adopted its new “Always One Step Ahead” (AOSA) brand positioning platform to support the existing Deloitte vision: “To be the Standard of Excellence”. AOSA represents the global organization’s value proposition and is never used as a tagline. The recent launch of the Green Dot ad campaign also aligns with Deloitte’s brand strategy and positioning framework
In June 2016, Deloitte changed its branding and adopted a new logo with Deloitte written in black color instead of earlier blue.
Audit provides the organization’s traditional accounting and audit services, as well as internal auditing and IT control assurance. In 2017, it accounted for 24% of worldwide revenue share
Consulting assists clients by providing services in the areas of enterprise applications, technology integration, strategy & operations, human capital, and short-term outsourcing. In 2017, consulting accounted for 37% of worldwide revenue share.
Financial advisory provides corporate finance services to clients, including dispute, personal and commercial bankruptcy, forensics, e-discovery, document review, advisory, mergers & acquisitions, capital projects consulting and valuation services. In 2017, financial advisory accounted for 9% of worldwide revenue.
Risk advisory provides offerings in enterprise risk management, information security and privacy, data quality and integrity, project risk and business continuity management and sustainability. In 2017, risk advisory accounted for 12% of worldwide revenue.5Tax & legal
Tax & legal helps clients increase their net asset value, undertake the transfer pricing and international tax activities of multinational companies, minimize their tax liabilities, implement tax computer systems, and provides advisory of tax implications of various business decisions. In 2017, tax & legal accounted for 19% of worldwide revenue.
Organizational Structure (AFRICA)
QUESTION 11.1 Vision, mission, and Value of DeloitteVision
To be the Standard of Excellence.
Our vision is realised through being the first choice of:
-The world’s most coveted talent, drawn by our eminence, culture, and diversity.
-The most sought-after clients in each market, attracted by the breadth and depth of our world-class expertise and the quality of our service.
The Vision shows that Deloitte moves forward based on quality, innovation and environmental conservation. Determines how the business addresses the needs of its target customers on the other hand, the corporate vision statement provides the direction of the organisation.
We help our clients and our people excel.
Deloitte specify why they are in business and the impact they want to add on the customer.
IntegrityWe believe that nothing is more important than our reputation, and behaving with the highest levels of integrity is fundamental to who we are. We demonstrate a strong commitment to sustainable, responsible business practices.Outstanding value to markets & clientsWe play a critical role in helping both the capital markets and our member firm clients operate more effectively. We consider this role a privilege, and we know it requires constant vigilance and unrelenting commitment.As stated above, Deloitte is all about delivering a service that will leave the customer satisfied as there are committed to go extraordinary lengths to support customers. Business is conducted in an ethical way ensuring no harm is done to the environment through the business practices.
Making an impact that matters.
1.2 SWOT AnalysisStrengths
Risk consulting- Deloitte’s strong competitive position is one of the key reasons for its success. For example, in 2007, it was named by the Forrester wave as the market leader in risk consulting services.
Deloitte’s clean tech, Indirect Tax, valuation services, forensic and dispute services generate a lot of cash and form the high growth and high share section of its businesses.
Human Capital Strategy- Deloitte is very efficient in helping clients identify newer tools and methodologies. Weakness
Weak presence in outsourcing market even compared to its competitors KPMG and McKinsey, Deloitte position within business process outsourcing is not within the top ten in global rankings. It means Deloitte does not benefit from the growth of the global IT services.
Global association structure
Relative immaturity of global delivery capability
Deloitte is one of the early adopters of the IRFS standard considering its simplified financial accounting and improved financial reporting and transparency.
Increase in spending on infrastructure in Africa offers Deloitte with chances to provide assistance to government in public private partnerships. Threats
More focused IT competitors which cover all aspects of IT, having strong business capability like IBM Business Services, Accenture and Capegemini threaten Deloitte’s business.
Smaller audit firms which have lower valuation of auctions rate securities could shift the demand away from Big four to smaller firms like Rothstein Kaas, RSM McGladrey and BDO Sedman.
Implications of the SWOT Analysis
Deloitte is in strong position in business consulting but its constantly changing business leadership is creating its own challenges. This has the following implications:
Higher investment in automation, online services and emerging business model and deliberately extend services in new areas of the client needs such as sustainability consulting.
Implement rigorous thought leadership in marketing and develop solutions for high growth markets.
Internet based provider of business services may act as a future client so Deloitte must closely monitor their growth.
1.3 Resources and Capabilities of DeloitteStrategic capabilities
Deloitte capabilities occur in multiple options. Their ability to help solve customers’ difficult problems is distinct and ensures quality. They offer strategy and application, from a company perspective and technology view, to help them dominate in the markets where they compete. (Deloitte, 2017: 20).
The strategic capabilities of Deloitte are valuable. Deloitte’s competitive position is activated by its capability to progress at a high dimension in various ways.
As all the other Big three firms, the strategic capabilities of Deloitte is no longer scarce. They all aim to respond to understand and supply what customers expect. In order to overcome the commonality, Deloitte can apply the five essential choices (Procter & Gamble CEO A. G. Lafley and former Rotman School of Management) that can be framed as the answers to these critical questions: What is our winning aspiration? Where will we play? How will we win? What capabilities must be in place? What management systems are required?
Deloitte strategic capabilities are easy to copy. For the matter of keeping their advanced position in the market, they can hide their strategy to the general public while creating more progressive strategic capabilities for the coming years. They will have to increase their technology capabilities according to the way they implement strategy. One of the closest substitute capabilities of Deloitte is PwC’s Strategy. When it comes to substitution from different types of strategic capabilities, Deloitte may lose their ability to offer competitive advantage if competitors possess similar resources.
Deloitte has various experiences in valuing shares and intangible assets in distinctive contexts commercial, including, mergers and acquisitions, reorganisations, tax, financial reporting and disputes. They deliver solutions tailored to help envisage a variety of risks that result from growing third-party relationships, market volatility, corporate events, and regulatory changes (Deloitte, 2017: 23-29).
Deloitte is particularly attractive compare to their competitors in financial area towards the market, which makes them valuable with a high competitive advantage. Deloitte helps firms to identify, analyse, and prepare for risks that can affect their environments and damage reputations. Financial resources are not scarce, but Deloitte provides in their financial resource, the Forensic. The Forensic practice at Deloitte helps clients predict, detect, and respond to the risks and vulnerabilities that come from global corruption, litigation, fraud, and other threats. They help companies to anticipate rising threats through the utilisation of market-leading technology to uncover predictions that competitors may fail to find (https://www2.deloitte.com/za/en/misc/litetopicpage.Global-BU-FinancialAdvisory-Tags.forensic.html). This financial resource concerning the Forensic applied at Deloitte is imitable but hard to copy. It is expensive and involves a deep sense of research when deciding to use this way. By being a hard resource to copy, Deloitte is therefore well positioned compare to its competitors. Deloitte do possess substitutes but not with the same science of investigation related to financial resource.
Deloitte delivers technology recommendations that help conduct transformation, enhance productivity, and organize business performance. Their practical, creative’s solutions are related to measurable goals to guide organizations achieve competitive advantage. They deliver a fit structure allowing clients to find appropriate application management services to their IT and organizations goals. (Deloitte, 2017: 67-69).
Deloitte technology resources are competitively valuable. As they link their innovative solutions to help organizations for the purpose of achieving their competitive advantage, they position themselves far from the competitors. Technology is commonly used in the field that Deloitte operates; therefore it’s not an aspect that rivals lack. Deloitte technology resources are imitable but hard to reproduce the same type, because it is expensive to copy. The temptation to hang onto the old version is not their norms, but being continually in search of innovation to keep the standard of the organization high makes it costly. Deloitte can be substituted by one of the other big three firms, which make them lose much of their ability to offer competitive advantage if their rivals possess similar power. In the objective of covering this weakness, Deloitte will have to keep the standard of its technology competitive sustainable by constantly strive for greatness with the improvement of IT creativity and innovation. Regarding Deloitte’s technology, an advance department of value creation can be established for programming attractive solutions adapted for a broad type of organizations.
1.4 Deloitte’s Value Chain analysisIn 1985 Porter discussed the company value chain in the publication Competitive Advantage (Gamble, Peteraf & Thompson, Jr, 2015:78). Porter examines the primary activities of a company and its support activities that contribute to and affect customer value.
While Porter’s value chain has become a relevant tool in the understanding of business operations and strategy, the model was designed with the consideration of product based companies such as in the manufacturing industry. As per the idea to understand the customer value proposition through the value chain, this concept will be used to consider the value proposition of Deloitte. Deloitte however is a service based company whereby the traditional model provided by Porter is unmatched. With this in mind we have considered adapting the service operations to that of a production operation.
Deloitte’s tax division offers a consulting service offering tax assistance, advice and consulting in business tax, transfer pricing, international tax, global employer services, indirect tax and tax management services. As such, the “product” being offered by Deloitte is the service of tax consulting. With this in mind, we will exam the primary and support activities that make the consulting service possible.
Given that Deloitte’s main “product” is the specialist consulting and advice to companies, the input related to the company product is human capital development. In order to provide reliable, trusted and specialist advice, Deloitte must ensure that they employ the best, most sought-after tax consultants. A strong recruitment structure and employee development structure is required. Deloitte is thus responsible for ensuring that they are the employer of choice compared to their competitors. Apart from brand preference among potential employees, Deloitte must also maintain good relationships with recruiters and head hunters.
Once consultants are employees of Deloitte, they must be skilled and trained in the art of consulting effectively and given the relevant tools to provide a superior service to their competitors. Deloitte is responsible for investing in the constant training and up skilling of the consultants to ensure that they are up to date with all current trends in the industry. Software update and development is a crucial component to operations in that easy-to-use, efficient software is required to offer an accurate and fast paced service.
Given that Deloitte’s core business is consulting services, the “the outbound logistics” applicable is the final output of the consulting service offered by consultants. The result of the service offered must be accurate, reliable and beneficial to the client.
Marketing and Sales:
While Deloitte has established a sought –after and trusted brand, they are still part of the commonly known Big Four audit firms globally. As a result, Deloitte has the responsibility to show companies what unique service they can offer over their competitors in order to gain larger named corporations as their clients. Therefore Deloitte makes use of a team of Business Developers and Account Managers to bring in new business and maintain the relationship with current clients.
The unique point and competitive advantage of Deloitte lays heavily on the on-the-job service offered by consultants and the accurate output delivered by the service. Deloitte’s Tax division offers expert advice and guidance to any all possible tax related matters in a company which results in a positive relationship maintained with the South African Revenue Services. Companies require a tax clearance certificate which allows for easy, hassle-free operations. Deloitte’s service ensures that all tax matters of a business are in order so that they don’t have to.
As a company, they must also procure the assets that their employees require to offer the best service such as company cellphones, laptops, company cars etc.
Deloitte must employee and procure the most up to date technology that its consultants use to manage tax calculations with up to date tax requirements and tax tables.
The function of the HR department for a business such as Deloitte is crucial as the service of Deloitte relies heavily on the intellect of the consultants employed (insert how Deloitte recruits).
Deloitte itself is a business just like the clients that they serve. Accounts need to be managed, IT must ensure that the internet and servers are maintained and available 24/7 for optimal operation and consultants work in conjunction with the management team of Deloitte who identify and guide how Deloitte will achieve its objective as a company year on year.
1.5 Porter’s Five Force Analysis for the accounting industryBargaining power of buyers
Deloitte as an accounting firm provides direct accounting services to corporate organisations such as BMW. Their target market for the services they provide is mainly large cooperation, however they also provide their services to the smaller companies. The pool of companies in need of accounting services is very large thus decreasing the power apprehended by buyers to negotiate prices. (Porter’s 5 forces analysis in the accounting service industry, 2017)
The bargaining power of suppliers is also influenced by the costs they could incur if they do switch companies or products. The switching costs vary as they are influenced by the services that the customer would need for example if the organisation needs a specialised service, within then accounting context, that Deloitte offers then the costs would be high. According to Hooper (2015 ) switching costs are also high as the rapid increase in technological advancements have offered customers in the accounting industry improved flexibility in general bookkeeping as well as tax services (Hooper, 2015). The buyer’s power can be deemed low reason being that there are a few choices that they could choose from that render the accounting services and auditing is a legal requirement for all businesses (Copuroglu, 2013).
Bargaining power of suppliers
Deloitte provides accounting services to its customers and therefore needs talent to perform these activities. Its biggest and most important input in its processes is the human capital, which would be graduates in the relevant fields of study such as auditing, accountancy, tax, etc. The suppliers of Deloitte include universities such as University of Johannesburg, Witwatersrand University, and the University of Cape Town. These universities offer educational programmes in the fields of study required by Deloitte. Suppliers are also inclusive of individuals that have obtained a degree, per requirement of Deloitte, in the relevant fields of study (Copuroglu, 2013).
Technology has radically changed the accounting profession thus available software that has made the processing and storing of financial documents easier and faster. It has majorly improved the landscape of the accounting profession and has become a somewhat important input in the accounting processes. The supply of technological advancement also has an effect on the suppliers bargaining power. There are high switching costs that can be attributed with data migration (Hooper, 2015).Suppliers are also inclusive of employment agencies as well as their career site which is accessible via website. Their recruitment site requires an individual to upload their details and achievements on the website as part of the applications application process for employment vacancies in the organisation (https://jobs2.deloitte.com/za/en/?icid=top_job-search). The applicants do however have to create an account with Deloitte prior to applying for the preferred vacancy, which is all available on their website.
The bargaining power of suppliers is low as there are many suppliers of the talent needed as an input in the accounting processes and Deloitte has been identified as a preferred place of employment within the industry (Copuroglu, 2013). The switching costs from one supplier to another can be high depending on the skills and knowledge offered by the supplier. The human capital required need to have a basic knowledge not only of the company but also how to perform the task that the job they are applying for entails. The demand for qualified professionals in this industry is high while the economic status of South Africa is merely stabilising (Porter’s 5 forces analysis in the accounting service industry, 2017).
Threat of new entrants
Potential entrants find it hard to enter as well to remain in the market as majority of the market share is distributed amongst the top firms such Deloitte, PWC, etc. These new entrants therefore do not pose much of a threat to large houses such as Deloitte, PWC, etc. as they differ in size as well as capacity (Porter’s 5 forces analysis in the accounting service industry, 2017). This therefore indicates that the probability of new entrants in the industry is low.
The investment capital that new entrants would require is huge as the labour costs alone for accountants is high. This may discourage potential entrants from penetrating the accounting industry.
Threat of substitutes
Technological advancements have improved accounting processes, however these improvements have only been beneficial to accounting firms. These software developments have to some extent made it easier for accounting firms conduct the accounting processes. The application Tax Tim does the tax services for small businesses and individuals. This does not pose a major threat to Deloitte but does indicate to some extent how technology could be a substitute of their services in the future. However there are no real substitutes for the service offered by Deloitte as auditing is a legal requirement (Copuroglu, 2013).
Rivalry of substitutes
There is intense rivalry in the accounting industry as there is minimal differentiation in the services offered by Deloitte as compared to other large accounting firms such as PWC and KPMG. Although each firm may offer specialised services that may be unique to the firm, the standard accounting process such as tax are performed in a similar way across the industry.
Although the entry barriers are low in the accounting industry, different accounting firms (i.e. with the differential factor being the company size and capacity) have different target markets. Large accounting firms aim on supplying private and tailored accounting services thus endangering the smaller accounting firms.
The collective strength of the five competitive forces and industry profitability.
Due to the competitive forces being mostly medium to low, we can safely assume that the industry is attractive as occupants stand to gain considerable profits as well as a good return on investments. The intense rivalry as well as the low bargaining power of supplier do however oppose the idea scenario for an attractive industry. The low threat of potential entrants does however benefit the occupants of the accounting industry as resources that would have been deployed to reactive activities again entrance can now be allocated to activities that will ensure benefit the existing occupants.
1.6 PESTEL Analysis for Deloitte AfricaThe PESTEL analysis is an analysis of the environment as a whole in which a business operates. PESTEL is an acronym of the six principal components of the macro environment; political factors, economic factors, sociocultural factors, technological factors, environmental factors and legal/regulatory factors of which we will examine how each affects the business of Deloitte Africa.
“Political uncertainty has a big impact on business confidence..” (Paul Maughan 2017).
When it comes to politics, the ‘one Africa’ principle does not apply. While political and stability risks in Africa are generally high, there are notable differences based on the region one is looking at. In terms of stability, some countries are particularly strong, while others are weaker and particularly risky. Southern Africa and the south of East Africa stand out as being less prone to conflict, having higher resilience, being dominated by democracies and hardly hosting any long-standing rulers. In contrast, the centre of the continent still battles with violent conflict and non-democratic regimes persist.
Many countries in Africa introduced multi-party political systems in the early 1990s and stability has improved since. This progress should therefore be conducive to economic and political development since political instability is detrimental to economic growth (Alesina et al, 1992).
Many multinational companies have their African headquarters in South Africa and South Africa is still largely seen as a springboard into the rest of Africa. South Africa, while being viewed as a more politically stable environment compared to its other African counterparts, is not without its own volatility. Although business confidence has slightly increased as a result of the resignation of President Jacob Zuma and swearing in of President Cyril Ramaphosa, South Africa is still experiencing political uncertainty with the build up to the 2019 general elections. This tends to be a general trend in the run up to elections in many African nations, political uncertainty increased and government budget deficits also widened in the run-up to elections, in 2016 in Ghana, Zambia, Gabon and Uganda.
Over the past decade Africa has seen growth with new market opportunities beginning to emerge and disposable income rising. Sub-Saharan Africa is still one of the world’s fastest growing economies; this is mainly driven by public infrastructure investments, increased agricultural production and the services sector (of which Deloitte Africa is a part of) (Hayat and Kalf, 2015).
However GDP growth has come down from its five-year average of 6% and is expected to be about 4% in the coming few years (Hayat and Kalf, 2015). Despite high GDP growth, per capita GDP growth has lagged behind due to high population growth and poverty levels have hardly declined since the 1980s (Hayat and Kalf, 2015). One of the main reasons why GDP growth has not translated into less poverty is that it has mainly benefitted those who are well-off rather than the poor, which in turn is largely due to high levels of corruption (Dumitru and Hayat, 2015).
The Gini coefficient, which is a well-known measure of inequality, for Sub-Saharan Africa has hardly declined in the past decade, with South Africa (where Deloitte Africa is based) taking the number one spot with the highest levels of inequality.
The Sub-Saharan African region mainly consists of net commodity exporters. Many of these countries are heavily dependent on commodities, as they form a large base of their GDP’s.
Commodity prices have decreased sharply since 2014 (Dumitru, 2015). Both oversupply and slower demand from China have played their parts, and both elements also weigh on the Sub-Saharan economic outlook.
Countries in Sub-Saharan Africa generally have a narrow tax bases apart from commodity-related revenues. African countries vary in corporate income tax rates, with the general average being around 25%. The United Nations Economic Commission for Africa estimates that the continent loses more than $50 billion through illicit financial outflows every year, most of this is linked to tax avoidance and evasion.
As a result of falling commodity prices public debt in Sub-Saharan Africa is expected to increase therefore widening budget deficits. Now that commodity-based revenues have fallen governments will have to pay higher interest rates to attract debt financing. As a result of the above, Sub-Saharan currencies have depreciated considerably, as was the case in Nigeria, where Deloitte has its second largest presence on the continent. Global oil prices have fallen by well over 50 % since 2014. Nigeria’s principal export is oil. Oil production contributes over 10% of Nigeria’s GDP. Falling oil prices have been disastrous, bringing about rapid foreign exchange rate falls (Coppolla, 2016).
South Africa (being the base of Deloitte and the country where Deloitte has the biggest presence) has the largest economy on the African continent as of the end of 2017. Wealth inequality, high levels of unemployment, growing public debt, political mismanagement of the economy, low overall levels of education, lack of reliable access to electricity and crime are all serious problems that have negatively impacted the South African economy. Many of these problems stem from South Africa’s history and the apartheid-era design of the country’s economy; however that coupled with the post-apartheid government’s failure implement strategies to effectively deal with these problems has entrenched them deeper into the South African economy, contributing to sluggish economic growth rates.
A positive that can be drawn out despite GDP per capita growth being cancelled out by increased population sizes, is that there has been an increase in the size of the middle class. The rise in overall disposable income in the Sub-Saharan markets is greatly benefiting businesses. A number of Deloitte’s clients have continued to grow and expand further into the African continent. Deloitte being a largely B2B orientated business, has allowed the company to ride on its clients wave of success on the African continent.
Africa’s population has been on the rise over the past 50 years. The continent is home to over 1.2 billion people and over 60% of the population fall below the age of 25. The population of Africa is projected to double by 2050 to around 2.4 billion people (Kweitsu, 2017). What is of most importance is whether Africa, in the coming years, will be able to tap into this youthful generation as a resource for economic growth; this will require corporates such as Deloitte to play an active role in providing opportunities to young Africans.
Africa’s middle class has been growing in size on the back of strong economic growth over the past decade. In 2011 an African Development Bank (AfDB) study put Africa’s middle class at nearly 350 million, or 34% of the population.
Sub-Saharan Africa has made good progress since The Economist labeled it as the ‘hopeless continent’ in May 2000, when floods, famine, war, disease and poverty were major problems. Since then, violent conflicts have been fewer (Dumitru and Hayat, 2015), education has improved (Hayat and Kalf, 2015) and deaths from preventable diseases have dropped.
Sub-Saharan Africa is an immensely ethnically diverse continent. ‘While the rest of the world’s regions average between 3.2 and 4.7 groups per country, the African countries’ average is greater than 8′ (Fearon, 2003).
African mobile technology on the rise, this is driven by falling costs and a lack of fixed phone line connections. Mobile phone ownership in Africa is booming, and is transforming everything from banking and healthcare (with text messages used to transfer money and send health advice), to agriculture and politics (farmers can receive guidance, weather forecasts and market reports, while communications technology has played a key role in recent uprisings) (Par, 2013).
In 2012, the US television channel CNN declared that mobile technology had “immense” potential to transform Africa’s “dysfunctional educational system…as mobile phones were cheaper to own and easier to run than PCs were to gain ground as tools for delivering teaching content” (Parr, 2013)
Major improvements in mobile phone technology and exemplary pilot programmes in m-learning have the potential to benefit students enrolled in higher education. This has the potential to directly benefit Deloitte in their procurement of new highly educated labour as the company expands in Africa.
The overall proliferation of mobile phones across Africa has led to increased communication, easier and more accessible banking and management of personal and business finance; these are all elements which make it easier for Deloitte to conduct their business.
The African ecological environment is diverse and offers many opportunities for light and heavy industry business.
Some of the largest threats facing the environment in Africa today are land transformation, habitat loss, biological invasion, destruction of ecosystems, mismanagement of natural resources and climate change.
Climate change is a global environmental problem and while a developing continent like Africa has not contributed greatly to climate change, it will certainly be among those areas first affected by the impact of climate change (Pongo, 2008:7).
Randomly drawn borders, dividing African countries based on previous colonial rule still affect Africa today. African countries have battled to create laws that can unite their economies therefore leading to the great difficulty of doing business across borders of neighbouring countries. An increase in regulatory demand has delayed decision making and business growth.
However in March 2018 an extraordinary summit of the AU convened in Kigali where 44 of the 55 member states signed the text of a new African free-trade agreement called the African Continental Free Trade Area (AfCFTA).
The complete package of legal instruments includes a founding agreement, protocols on trade in goods and services, with annexes on trade-related rules and procedures, and a dispute settlement mechanism (Hartzenberg and Erasmus, 2018). This should allow greater ease of doing business across the continent for Deloitte Africa.
QUESTION 2In answering this question, the strategic objectives of Deloitte have been identified and analysed according to the SMART criterion, as follows:
2.1 Ensuring quality (Deloitte, 2017:52).According to Deloitte’s Integrated Annual Report (2017:52), the first strategic objective of the company is to ensure quality. With a plan aimed at the year 2020, Deloitte aims to deliver value to its stakeholders through creating a culture of quality. As an auditing firm, Deloitte feels that quality is always under the spotlight thus they will focus on three areas, quality, compliance and brand reputation. Quality refers to the service provided by Deloitte to its clients. Compliance links to Deloitte’s staff adhering to the culture of quality focus and brand reputations focuses on Deloitte’s image.
Deloitte has outlines its strategy to achieve this objective. The first aim is to deliver high quality constantly by adhering to their Audit Quality Plan. Secondly they will focus on inspiring the employees of Deloitte to undertake a work ethic and culture of quality focus starting with a top down approach with leadership setting the example. Deloitte will focus on setting applicable targets and aim to appropriately measure quality. They will aim to create a non-compromising environment aimed at following correct and ethical practices when working on compliance. Deloitte will maintain and reassure their clients of privacy of information and data security. Finally, quality will be factor of partner remuneration by creating a remuneration structure that is linked to quality as a performance measure.
Ultimately, this strategic objective aims to achieve, 1) an increase in total client satisfaction growing from 7.8 in 2017 to 8.0 in 2020, 2) achieve client quality by increasing from 7.7 in 2017 to 8.0 in 2020, 3) maintain a 100% DTTL practice reviews on norm, and 4) achieve an increase from 89% regulatory reviews that are satisfactory to 100%.
The goal is specific in that it details exactly what the goal aims to achieve and how. The goal is measurable as it has four targets to achieve which are quantitative results based on surveys conducted. These surveys have been conducted in 2016 and 2017 and there is an expected result for 2020.
Whether the goal is achievable lies in the strategic plan that Deloitte implements to achieve the goal. The goal is achievable as quality is a main factor in the service environment, especially the financial environment. It should be the mind-set of Deloitte employees to strive for quality and it is quality that has gotten Deloitte the reputation as one of the top 4 audit firms in the world.
Quality is a realistic goal in that the core of Deloitte’s business lies in the firm’s ability to provide a service that is sought after and trusted. The plan to achieve the goal of quality is detailed and specifically identifies how quality is a corporate culture aim, targets will be set to achieve quality and partners will be remunerated accordingly. The strategic objectives of Deloitte are time bound in that they are to be achieved by the 2020 Annual Integrated Report.
2.2 Become a premier career destination (Deloitte, 2017:58).In making an impact on their clients, the profession and society at large Deloitte’s talent is their most valuable asset. Deloitte’s ability to attract, develop and retain the right people is therefore a key success factor.
Deloitte’s aim is to be a premier career destination that provides the best talent with challenging work and significant development opportunities in an informal and collaborative environment; within this objective Deloitte have set out multiple sub-objectives which include; to position Deloitte as a distinctive employer, the company aims to provide a truly distinctive experience for employees, provide millennials an environment that is centred on their personal development and to stimulate diverse thinking.
The objective and sub-objectives above are specific, in that they answer exactly who will be participating in the in the activities centred on objectives. The employees, both future and current, are the main focus of this objective.
The focus should also be on “how much” change is expected. Deloitte’s objectives should quantify the amount of change expected. It is impossible to ascertain whether objectives have been met unless they can be measured. The objective should provide a reference point from which a change in the target population can clearly be measured. Deloitte aims to stimulate diverse thinking by having 30% female partnership in the company by 2020. Being a distinctive employer and providing a distinctive experience cannot be measured due to the subjective nature on the objectives.
In order to achieve their objectives regarding their employees the company has developed a new Talent brand that fits the needs of the millennial generation and delivers a talent experience while working at Deloitte: through this Deloitte can establish relationships with high potential students as early as in the second year of their studies. Deloitte aims to provide a truly distinctive experience by offering career enhancing assignments, and broad development in a healthy work-life environment. The Talent Plan 2020 therefore contains key retention initiatives focused on increasing the quality of the employee experience, updating career models, performance management, rewards, and leadership development and learning. To retain their talent, the company must deliver on their promises within their day-to-day tasks.
In 2017/2018, Deloitte plans to launch a new performance management approach that Deloitte believe is needed to become the employer of choice. Through this new way of performance management, the company can to provide millennials an environment that is centred on their personal development with frequent and brief interactions focusing on performance and development rather than planned bi-annual formal sessions. This makes the objectives realistic in that they accurately address the scope of the problem and program steps that can be implemented within a specific time frame.
2.3 Accelerate growth and innovation (Deloitte, 2017:65).Accelerate Growth and Innovation –Deloitte advisory business has continued to see remarkable growth in the corporate and upper mid-market segments .To serve our clients and help them navigate in an ever-changing world , we have continued to invest in priority growth areas .This growth in revenue was facilitated by our focused approach in our target markets of Financial Services ( +19.4%), Private Sector Industry ( +3,4 %), Public Sector (-3,3%) , and Private Markets ( +5,7 % ) (Deloitte 2017:66).
The most innovative firm
As part of the implementation of our strategy 2020, in 2016/2017 we continued to build on our redefined innovation strategy, The cornerstone of this strategy is that we maintain the focus to become “the most innovative professional services firm in the World, obtaining 30% of our revenue in 2020 from innovative products and services, which we define as solutions that we did not offer in the previous three years (Deloitte, 2017:67).
Governance to foster innovation
Our dedicated innovation department , Deloitte innovation BV , has a focus on building transformational solutions that can become the core of our business in the future , The traditional business each have their own innovation programs that support them in building out new product and services that are more closely related to their core business. For us care innovations are improvements and a natural evolution of current services. Adjacent innovations are innovations linked to our current services but based on a new technology, delivery process, business model etc., Transformational innovations are those that are new to Deloitte and our clients, and are based on completely new technologies that are often developed in house, and usually take multiple years to develop. To progress innovation in the functions, we have appointed Innovation leaders across all functions, they work closely with our Deloitte Innovation BV and meet regularly, and they are tasked with developing innovation plans and budget per function and monitoring progress on a monthly basis, Their efforts and the activities of Deloitte Innovation BV are overseen by Innovation Committee led by the CEO and consists of our Function Leaders, Industry Leaders and our Innovation leader.(Deloitte 2017:67)
This particular strategic objective it is achievable, realistic, and measurable.
Developing new solutions
To better respond to our client demands, throughout the year we invest in new capabilities and develop new product and services that are relevant to them. We are investing time and effort in building capabilities to enable clients to achieve the maximum advantage from upcoming technologies such as Advanced Analytics, Data Transformation, and The internet of things Robotics and Blockchain , in 2016/17 our innovation efforts resulted in more than 20 new products and services delivered to market within almost every Function and Industry .Examples include SHIFT (an automated dismissal –tool that calculated the order of dismissal and gives direct insight in all costs ) , NIMBLE (a program of more than 10 consulting offerings to help organization become more agile) and Blockchain in Real Estate ( a world first blockchain based overview of owner-tenant contracts per building ) one of the latest examples is the launch of our online store : DeloitteWebshop.com , in which we sell products directly to clients without human interference .Example of products include Al-powered risk and strategy reports, TAX video tutorials and automated Cyber Penetration Tests. This transformational solution represents a big leap forward in terms of exploring new revenue streams. (Deloitte 2017:67)
Our brand “breathes “Innovation
Our inspiration is to be the undisputed leader in professional services .This include being recognized as the most innovative partner by our clients and our talent and our talent .To stay relevant for our clients in a world of shortening product lifecycles and digitalization , we will continue to invest in our aspiration to be the most innovation professional services firm .
We have associated our brand with leadership and innovation focusing on the following growth areas, Cyber security, Data analytics and digital. In doing so, we deploy an innovative content –driven strategy to reach our stakeholders in a more visible, innovative and personal way .We use online channels and social media to share our opinion, vision and knowledge about these themes on a regular basis (Deloitte, 2017:68).
Commitment to Innovation
With investment in innovation and innovative projects of over 1% of our yearly revenue, we remain committed to fostering innovation in our markets .Deloitte is a partner in many innovation ecosystems, including Cambridge University which helping clients building future business models
Deloitte is also committed to innovation through its High Tech Competence Centre in Eindhoven, HTCC which combines an innovative ecosystem approach with a dedicated international Deloitte team .HTCC supported a new Dutch graduate university in the city of Den Bosch that opened its doors in September 2016 , providing a program for data science students with strong entrepreneurial and business skills .The HTCC Executive Advisory Council also set in motion an initiative to use technology to provide support to refugees in Europe .Deloitte has convened a refugee-centric ecosystem called FutureHub , which uses data analytics to overcome labour market challenges for refugees .
To underpin our double-digit revenue growth in the 2017 we launched a client based marketing approach for one of our most distinguished clients .In this project , we bundled targeted sales and growth and marketing into a marketing program for specific clients ,having renewed our marketing automation platform .Together with partner including ING , Dell EMC , Microsoft , Dimension Data we joined The Think Forward Initiative ( TF) as a partner .TFI is a multi –year movement that brings together a range of experts and research to find out how and why financial choices are made, using the lessons learned as a springboard to design innovative solutions in the Financial Services Industry .
In the Technology, Media and Telecommunications Sector we offered TMT 2017 Predictions, which offers insights into disruptions trends and growth opportunities across the sector. Fast growing technology companies and disruptive start-ups-were also celebrated as part of the 17th Edition of the Fast50 client program technology in which we showcased the 50 fastest growing technology companies globally.
In the consumer ;Industrial products segment we organized our “Agri meets Chemicals” event for the third time together with Rabobank .The event provides a dedicated setting for agricultural business , consumer brands and chemical companies to interact , innovation and develop new partnership and products .
In cyber security and data analytics, we convened professional and clients to our large scale “Data with a View “event in the Hague where we shared insights on data analytics and insight –driven organizations (Deloitte, 2017:68).
Serving our SME CLIENTS
In the mid-market company segment (50 million – 1billion Euros annual turnover ) which has begun to see economic recovery , our Deloitte Best Managed Companies program has continued to support the growth strategies of middle to large sized companies including Family Business .Organized for the 11th time , this program nominated 340 midmarket companies and identified over 60 best managed companies in the segment .In the coming years , the Best Managed Companies program will be rolled out by Deloitte member firms in many other countries worldwide .
Our innovative platform CTRL saw further growth in 2016/17 , both on national and international level .CTRL is a “one-stop-shop” for small and medium sized businesses .It provides various digital services like bookkeeping, invoicing , dash boarding , reporting and analytics .These services offered through the platform continue to grow, as does the number of clients( Deloitte, 2017:69 ).
2.4 Improving the client portfolio (Deloitte, 2017:70)To implement Deloitte’s overall corporate strategy, there are certain objectives that they must accomplish which are aligned to each of their co-areas in their strategy. One of their key elements is the improvement of the client portfolio and to achieve this they firstly, aim to create and maintain sustainable and rewarding relationships with their clients that will have a meaningful impact. Secondly, they aim to deliver professional services of a high-quality standard while charging their clients a reasonable price (Deloitte, 2017:70).
Deloitte plans to achieve its objectives of creating and maintaining rewarding relationships with their clients by reviewing their client portfolio via a multidisciplinary process, that includes a client qualify risk assessment as well as a detailed profitability assessment which will indicate whether they should continue in maintaining the existing relationship or not. Deloitte also maintains open discussions with its clientele about the impact, quality and fees of the service it provides thereof (Deloitte, 2017:71).
Deloitte maintains a continuous dialogue by means of interviews and digital questionnaires with its clientele to determine which assignments provide the most value, in terms of returns, to the customers so that they can devote more resources to these tasks and ensure they are exceptionally executed. This is done to ensure that Deloitte can achieve its objective of providing a high-quality service at a reasonable price.
Deloitte also has a vigorous client and engagement acceptance process which ensures compliance to the relevant laws, an understanding of their clients and the clients as well as the services provided are aligned with their values to then minimise the risk to its reputation. During this phase Deloitte aims to identify possible client and engagement risks and define solutions to combat these. This is an imperative step in ensuring a high-quality service to its customers (Deloitte, 2017:71).
Deloitte’s strategic objective of improving its client portfolio is measurable as this has been demonstrated through the measures they have put in place to gauge its progress in achieving this objective. The measures have been mentioned above and they include the vigorous client and engagement acceptance process as well as the continuous dialogue that is maintain with its clients to understand the value it creates for them. There has been improvement in the client portfolio it keeps which therefore indicates that this objective is achievable (Deloitte, 2017:70).
This strategic objective is also timely as Deloitte has planned to achieve this objective by the year 2020. The objective is specific as Deloitte has illustrated how it intends on achieving this objective by the year 2020. Through full implementation of the action planned devised by Deloitte, it can achieve the objective. The measurement practices put in place to measure the progress indicate that the objective is achievable.
2.5 Establish lean operations (Deloitte, 2017:72).Deloitte’s goal is to become an undisputed leader in the provision of professional services and to attain this they devised two objectives. Firstly, they aim to decrease their overall costs in 2020 to 44.2 €K and its second objective is to improve its relative position in International network to the 1st quartile (Deloitte, 2017:72).
To achieve the objectives mentioned above they have developed a Fit for growth program which aims to reduce costs to then enable long-term sustainable savings and promotes a cost-conscious culture across the entire organisation. Initiatives such as this program have brought about a significant decrease in the overall cost of operations from €665 948 in the 2015/16FY to €660 909 in the 206/17FY (Deloitte, 2017: 98). Other benefits which result from a cost-conscious culture at Deloitte are optimised model of its Client Finance Management support to its business as well as the integration of its HR (human resource) office by means of standardisation and automations (Deloitte, 2017:73).
To minimise the total operating expenses of the business, Deloitte has empowered and made its procurement function very professional as it plays an imperative role in controlling the costs of the business. Improvements have been made to the company’s operational efficiency in parts of its Audit and Tax ; Legal business as there has been a visible increase in the workload (Deloitte, 2017:73).
The objectives of lean operations are to minimize the overall costs of an organisation through the integration of its activities and/or function. This then means that for one to assess or measure if this objective has been achieved, one would have to have a look at the organisations financial statements- the Income statement to be precise. However there are other factors that may contribute towards the achievement of lean operation in an organisation. Deloitte has put in place programs that have ensured a decrease in the overall cost of operations from €665 948 in the 2015/16FY to €660 909 in the 206/17FY (Deloitte, 2017:98).
This objective is not as specific as little detail is provided on how Deloitte intends to achieve this lean operations and decreased overall cots. The success of achieving this can be measured through comparing the costs incurred during different financial years as recorded in the financial statements. A decrease in cost is one of the results of lean operations, thus indicating that the objective can be measured by Deloitte. Without a detailed action plan it may difficult for Deloitte to achieve this objective by the ideal deadline, however Deloitte has been making progress in achieving this objective, as proven by the recorded decrease in overall costs. The objective is realistic in the sense that they have managed to achieve it to some extent which then attests to its realisation. The objective has been given a deadline of 2020 which gives evidence of the objective being timely.
We will access Deloitte according to Carroll’s Corporate Social Responsibility model.
The pyramid shaped model consists of four responsibility magnitudes: economic, legal, ethical and philanthropic. Economic responsibilities are the important domain, indicating that a business’s primary role is to make profits by producing products that meet customers’ expectation. Legal responsibilities are shown on the second layer, referring to the social requirement of a firm’s legal compliance. Ethical responsibilities involve the social value, norms and ethical standards that are not required by law but expected by customers, employees, stakeholders, and communities. Social responsibilities placed at the top layer of the pyramid involve public’s desire for the corporate’s voluntary investment in benevolent or welfare programs. The four dimensions are aggregated in a hierarchical structure, suggesting that corporations aiming for higher responsibilities, such as ethical and philanthropic procedures, have to fulfill the economic and legal responsibilities first.
This is because economic and legal responsibilities are socially compulsory and ethical responsibility is socially expected, while generous responsibility is socially desired (Schwartz and Carroll, 2003; Windsor, 2001). The study adopts Carroll’s corporate social responsibility model to examine public views of corporate social responsibility in different social and cultural frameworks. Carroll’s model recommends a reliable guidance for the cross-cultural contrast for numerous reasons. First, the model provides four distinctive dimensions to understand business responsibilities in society. Businesses can influence a given society in both positive and negative ways through their corporate activities, as well as their exchanges with an extensive variety of stakeholders (Carroll, 1997, 1999). Carroll (1999) argued that the role of business in society needs to be redefined, given the increasing impact that business inserts to the progress of humanity. As a result, individuals in different social backgrounds are expected to form different understandings of Corporate Social Responsibility based on their explanations and experiences with business organizations. In a similar manner, the model recognizes the large social impact on the public’s corporate social responsibility insights.
From the above diagram we look at how Deloitte is contributing towards being Ethical, Legal, Economic and social in the discussion below:
According to Oxford Dictionary-online (2018) ethics may be generally defined as philosophies and/or ideologies that govern a person or organisation’s conduct or the conducting of an activity (https://en.oxforddictionaries.com/definition/ethics). Ethics are also described by the Business Dictionary (2018) as basic concepts and core principles of decent human behaviour which are inclusive of universal values and standards (http://www.businessdictionary.com/definition/ethics.html).
Ethics are fundamental to the way Deloitte works, its people as well as its role in the society and this can be attributed to Deloitte’s Global Ethics team’s continued efforts to aggressively integrate ethics into key initiatives and processes, emphasizing quality and consistency of approach across its network. Deloitte prioritizes the creation of a culture that facilitates and promotes integrity throughout the organisation, and therefore its Global Ethics team works in conjunction with the member firm ethics officer to design and implement policies and programs that promote and sustain ethical conduct by the professionals of Deloitte (Deloitte, 2014:47).
Deloitte’s ethical program constitutes of elements such as the nine ethical principles, a global ethics policy the stipulates the requirements for member firms’ won ethics programs, a global anti-corruptions that addresses ethical dilemmas such as bribery, ethics training programs and supporting programs that facilitate best practice sharing among member firm just to name a few. Ethical principles that member firms of Deloitte uphold include confidentiality, fair business practices, responsibility to society, professional behaviour, competence and honesty ; integrity (Deloitte, 2014:48).
In the year 2014 the Global Ethics team introduced classroom learning programs aimed at building ethical sensitivity and decision-making skills among new Deloitte managers and newly hired employees. These programs provide opportunity for engagement and discussion on tough ethical issues. The Power of One program aims to build a strong ethical radar and allow personnel to analyse as well as explore numerous ethical dilemmas (Deloitte, 2014:47).
Deloitte also employs an ethics programme that serves as foundation for ethical judgement as well as decision making within the organisation to ensure that such activities are carried out ethically and with integrity. To guarantee ethics within the organisation Deloitte has an ethics officer, whom at the national level is involved with the performance management process for its partners and is supported by a Deputy Ethics Officer; external and internal counsellors. They furthermore measure the ethics programme they have employed in the organisation by means of a survey (Deloitte, 2017:81).
Deloitte places a responsibility on all its employees to understand and comply with the Global Code as this forms basis for the behavioral conduct within the organisation and the employees are then responsible for raising awareness on behaviour that may be in violation of the code. Deloitte practices serious consequences for non-compliance to the code by the employees, and this is done in an effort to ensure ethical behavior (Deloitte, 2017:81).
A survey was conducted in May 2017 and it indicated that, amongst other conclusions that were drawn by the Executive Board and the Supervisory Board, majority of the respondents believe that Deloitte was an ethical environment and raising awareness on the consultation processes for ethical dilemmas and issues was imperative (Deloitte, 2017:81).
In an effort to improve its ethical culture, Deloitte aims to continue in raising awareness, so they will be able to create an environment in which people trust its ethics team. It also aims to empower its partners and business leaders to behave in an exemplary manner to in turn encourage the rest of the employees to behave ethically. Ultimately Deloitte intends, through the implementation of the mentioned initiatives, to promote an open and safe culture for its professionals as well as to enable quick and appropriate response to ethical dilemmas by the organizations (Deloitte, 2017:81).
3.2 Procedure for environmental sustainabilityDeloitte’s procedure to sustainability is dual. First of all, they are well positioned across the network to diminish the environmental impact of Deloitte’s people; and the services firms’ member offer to customers to enhance sustainability practices. Deloitte is devoted in assisting its people by embracing and dispersing sustainability focused approaches in their work experience and through commitment where they live and work (Deloitte, 2017).
Commitment to environmental sustainability
Deloitte seeks to minimise the ecological effect of their operations. Organisations are tied up to have a measurable impact on the environment. Deloitte’s goal is to reduce that impact and foster environmental sustainability. Deloitte notices that their daily operations and functions result in environmental consequences for both their organisation and their wider community. They believe that it is their control to guide such inconvenient to the best of their features within their areas of impact. Deloitte their principal input to environmental sustainability is by their contribution in thought leadership, the work they do with their customers, and by reducing the environmental influences of operating their business (Deloitte, 2017: 177).
Finding the Value in environmental
Environmental, social, and governance (ESG) issues are definitely from divers’ area such as material, risks across a company’s entire value chain from supply chain to larger scale accidents and product safety concerns. Today even more than in the past, investors are scanning a company’s evidence, social and governance routine for ideas concerning the future of the organisation operation, and they progressively becoming thoughtful t o environment, social and governance dangers. Deloitte criticism of the indication on investor conduct approves that environment, social and governance questions might end up in essential changes in financial security, management and philosophy in the company. A growing type of risks can be monetarily factual and progressively an apprehension in nowadays’ evolution-challenged and explosive situation, surprises from the external world might decide if a company dies or survive. Some companies that are obviously prepared for environment, social and governance shocks can diminish the downside risks, equally short- and long-term when they happen (Deloitte, 2017:53).
Responses to rising water challenge
The particular area of focus that Deloitte uses as responses to rising water challenges are water stewardship, access to safe water, sanitation, hygiene, solution to the food, energy, water nexus through innovation collaborations and technologies.Deloitte took a number of initiatives to address customer’s problems. They established a structured ability atmosphere to understand approach resemblances, gaps, and effective practices across 10 water risk assessment groups and 35 scopes, between key activities. They also recommended a toolkit that could deliver a uniform mechanism for operations to assess and mitigate water-related risks. It is essential for business leaders in the world to know their industry worth at jeopardy from water linked problems and put in placetacticalideas in order to help moderate these risks. Regardless of the strident the increase in company reports of negative effects, there was some year after year change in some companies that have panel level error of water strategies, and no surge in the sum of companies that provide clear water linked problem evaluations to shareholders (CDP Global Water Report, 2014).
Deloitte Sustainability Services
With over 100 projects in 25 countries, they work hands in hands with their customer in order to ensure that their crucial goals as a company and design modified solutions to accomplish short- and long-term objectives with meeting or surpassing regulatory requirements (Available on https://www2.deloitte.com/za/en/pages/risk/topics/enterprise-sustainability.html).
A strategic and maintainable climate shows the most effectiveness when combined with existing strategic initiatives, and synchronized with a smart approach to the related risks and rewards. Deloitte member firms are here to help clients to successfully manage corporate responsibility and sustainable development issues. Deloitte’s global service teams are well enough qualified to assist companies in embedding corporate obligation into business activities .Deloitte supports efforts to deliver long-term sustainable value to the company and its stakeholders. In addition, Deloitte with their professional team can give a hand with best management practitioner; assess business-related advantages and disadvantages; and help grow sound an accountable corporate business approaches (Deloitte, 2017: 24-28).
Environmental sustainability performance
Deloitte measures it environmental routines in a way to understand occasions for improvement. For the past years Deloitte focused on dropping greenhouse gas emanations, and they have control their emissions by this time from FY09 (Greenhouse Gas Emission, 2016). Business travel makes up a large part of the Deloitte SOUTH AFRICA emissions, and it is their hardest emissions cause to reduce given that travelling to work together with their clients is a fundamental part of their daily operations. Deloitte continually look to identify opportunities to further improve process and reduce consumption of vital resources. Their computers and laptops are not sent to landfills. Once they have reached their maximum lifespan, they are donated to charity programmes, sold as second hand units or sent for recycling to ARK computers, (an organization that recycles computers and laptops). Their Computer for Charity programme gave 27 computers to charities and community organisations nominated by their employees, an initiative that both links in with their goals to contribute to environmental sustainability as well as enable their people to make contributions to the community with direct personal involvement (Deloitte, 2017).
3.3 CSR at Deloitte
Making an impact that matters
Corporate Citizenship drives measurable change in our communities, inspires our actions as societal leaders, and instills great pride in knowing that what we do best—applying our skills and experience—accelerates positive, societal impact. We drive impact through our signature national issues: education, veterans, and through pro bono and other key programs such as board service opportunities and Impact Day. We also work alongside the many other social impact programs and projects within Deloitte.
Pro bono and skills-based volunteering
Strive to leverage our most valuable asset –the skills and experience of our people , Help nonprofits address mission –critical issues , Increase the community impact of non-profits
Deloitte’s pro bono and skills-based volunteering programs are key components to our commitment to youth education, inspiring future leaders, and creating opportunities for veterans. Our approach is based on the idea that by leveraging the knowledge and experience of our professionals, we can make a more significant impact for nonprofits nationwide and across local communities.
How we deliver impact
Pro bonoPro bono engagements represent one of our strongest opportunities to create social impact and business value by demonstrating our knowledge and skills on behalf of nonprofits.
Deloitte’s pro bono approach is based on the idea that we can make a more significant impact in communities by tapping into our most valuable resource—the skills of our people. Our most significant investments are made through a formal pro bono program where nonprofit projects are funded by the business and then staffed and evaluated like any other paid client engagement. In addition to this, we also provide numerous other opportunities for our professionals to volunteer their skills in the social sector. These programs allow us to not only drive social impact, but also grow our talent by providing leadership, professional skill development, and team building opportunities.
Skills-based volunteerismSkills-based volunteerism (SBV) leverages professional skills to help community organizations. It allows for leadership opportunities and drives social impact through the transfer of valuable knowledge from the for-profit to the not-for-profit sector.
Pro bono and skills-based volunteering
Making an impact. Every day.
Deloitte’s pro bono and skills-based volunteering programs are key components of our commitment to leveraging the skills and experience of our people to make an impact that matters in our communities.
Deloitte Pro Bono Program
The guiding principle of the Deloitte Pro Bono Program is to treat our pro bono clients exactly the same way we treat our paid clients.
When our clients hire us, they seek and expect the full depth and breadth of the capabilities that Deloitte has to offer. We realized that it should be the same with our pro bono clients. Why? Because, while each pro bono project is championed by someone at Deloitte who is passionate about the cause, the resources available to deliver the work extend far beyond that individual and their capabilities. For us, this means leveraging our existing client service model to staff, fund, monitor, and evaluate pro bono projects.
Over the past four years, Deloitte professionals have delivered more than 1,000 pro bono projects, clocking more than 340,000 client service hours.
Deloitte’s pro bono projects consistently receive high ratings for impact—from both our clients and our people:
60 percent of Deloitte’s pro bono clients report “significant” or “transformational” capacity gains—meaning the nonprofit realized a greater than 20 percent improvement in productivity as a direct result of the project.
Our people love pro bono, too! 83 percent said their pro bono experience made a positive impact on their job satisfaction and 60 percent reported significant gains in job-relevant skills.
Examples of other pro bono opportunities
Board service: 3000+ Deloitte professionals demonstrate their exceptional commitment to the nonprofit community by serving as nonprofit board members. We also offer programs where junior staff can shadow Deloitte leaders who serve on nonprofit boards.
Service trips: Every year, 200+ Deloitte Consulting LLP professionals lead and participate in week-long service-related consulting projects to educate and empower local nonprofits and micro-enterprises. We work with nonprofits in the US and in developing countries such as Guatemala and Nicaragua.
Inspire: Deloitte Consulting LLP is a member of Inspire, a national, nonprofit consulting organization comprising volunteers from leading management consulting firms. Through Inspire, our practitioners provide small-scale strategy projects for nonprofit, youth-focused clients.
The Deloitte Workplace Giving Program is an employee giving program through which Deloitte professionals raise financial support for local communities. All funds raised through direct payroll deductions or check payments are disbursed through United Way. We also give through the Deloitte Foundation Matching Gift program to support institutions of higher learning.
Impact DayDeloitte’s approach to Corporate Citizenship is based on the idea that by leveraging the knowledge and experience of our practitioners we can make the most significant impact in our local communities. Impact Day represents a celebration of this ongoing commitment to use skills-based volunteerism as a means of leading in our communities.
Deloitte Foundation educator resources
Accelerating education to meet the pace of business
?The Foundation sponsors a variety of national initiatives designed to inform and equip educators with the tools they need to stay on top of industry changes within professional services. Since 1928, foundation initiatives have engaged faculty from across the US to develop the talent of the future in audit, advisory, tax, and consulting.
Leading in our universities
?Tomorrow’s business challenges require a new type of leader with a diverse skill set that enables them to innovate at the pace of business. Since 1928, the Deloitte Foundation has evolved alongside education, helping to support educators and develop future leaders in the critical fields of audit, advisory, tax, and consulting. Whether through classroom curriculum, financial support, cutting-edge research, or efforts to promote excellence in teaching, the Deloitte Foundation is helping education institutions confront the global skills gap head-on.
Educators play a critical role in preparing the profession’s next generation of business leaders. The Deloitte Foundation is committed to supporting educators and students by providing resources, teaching/curriculum materials, and other investments in academic programs that promote excellence in education. We are making an impact on tomorrow’s leaders today through the following:
Life Inc.: The Ultimate Career Guide for Young PeopleThe Deloitte Foundation recognizes that today’s youth are tomorrow’s talents who have myriad choices of potential career options. In 2007, the Deloitte Foundation began sponsoring the Life Inc. program to expand students’ views of future careers in a fun and interactive way. The Foundation teamed with Neale Godfrey, author of Life Inc.: The Ultimate Career Guide for Young People to provide her book and other valuable tools to help middle and high school students begin thinking about possible careers.?RightStep empowers future leaders
RightStep is Deloitte’s strategy to address education needs across America. Through collaboration with education organizations as well as donations from Deloitte professionals who contributed to the new RightStep Deloitte Foundation Education Fund, the program provides time, talent, and resources to help low-income students prepare for and persist through high school and college, then transition to a career. The RightStep Virtual Mentoring Program sponsored by the foundation pairs Deloitte professionals with students in underserved communities across the US. Approximately 500 Deloitte professionals are currently serving as virtual mentors to help students with such transitions as the college application process.
Matching Gifts Program
?Since 1972, the Deloitte Foundation has offered a Matching Gifts Program, which encourages partners and employees of the Deloitte US Firms to support higher education through contributions to colleges and universities. To date, the Foundation has matched more than $13 million annually to support nearly 400 colleges and universities across the US, establish over 60 professorships, and fund curriculum, scholarships, and other critical needs.
Deloitte Central Europe ( Serbia) –Mentoring tomorrows professional
Through a recent cooperative agreement between Deloitte Central Europe’s Serbia office and the Faculty of Economics , Finance and Administration , 10 Deloitte Central Europe practitioners have delivered presentations and workshops to FEFA students, The program offers opportunities for talented young people to strengthen their skills in entrepreneurship , leadership, finance and consulting .The initiative will provide an opportunity for five students to access the internship program at Deloitte Central Europe’s Serbia office.( Deloitte 2014 :39) .
Deloitte Southern Africa –Supporting the public education system
In Johannesburg , there is a lack of mathematics achievement in grades eight and nine .Since 2013 , Deloitte Southern Africa has worked with the government to strengthen the nation’s public education system .In collaboration with the Gauteng provinces educations department , the firm provides financial support to the departments Satellite Mathematics Project .More than 30 under performing schools have been selected by the department .The project is the first in South African public schools to make use of digital technology to support classroom teaching and learning , and is having an impact on 12, 650 young people (Deloitte 2014:39)
QUESTION 4Step 1: Building and organization with the capabilities, people, and structure needed to execute the strategy successfully.
In order to acquire the human capital capable of implementing strategic direction, Deloitte spends many resources to develop the relevant skills necessary and recruit the relevant employees with the necessary skills to implement the company strategy.
Deloitte’s staff compliment both nationally and internationally sufficiently covers all areas of service, both primary and secondary, of the company.
Deloitte furthermore has created a University aimed at training employees on the relevant skills and competencies so that they are able to gain the knowledge should they be lacking.
Deloitte is currently an employer of choice which puts them at an advantage in their recruitment as Deloitte focusses on targeting young academics to join their company through bursaries, internship and apprenticeships.
Deloitte’s benefits and rewards, which are discussed in more detail later on, plays a major role in the retention of employees.
The organizational structure of Deloitte is a matrix organization structure in that Deloitte is a global company and a global brand however the Deloitte companies are started and run as independent private organizations.
Deloitte also has there highly centralized organisation structure whereby top executive retain authority for most strategic and operating decisions and keep a tight rein on business-unit heads, department heads and managers of key operating units , comparatively little discretionary authority is granted to front line supervisory and rank-and –file employees ( Strategic Management 5th Edition: p 207 ) .In short Deloitte has a one place of decision making that run the whole organisation irrespective of the geographic areas. The benefit of this authoritarian is that it is easy to know who is accountable when things do not go well.
Step 2: Allocating ample resources to strategy-critical activities.
The first strategic objective of Deloitte is to ensure quality. Quality Reviews allow Deloitte help organisations improve the efficacy, quality and value form an internal aspect. Deloitte interact closely with firms and technical specialists present in their four business divisions: Audit, Tax, Consulting and Corporate Finance to provide a structured solution to their clients’ needs. Deloitte’s Financial Risk, Transactions Restructuring team helps industries to control operations risk and financial issues in order to conduct performance and become more reliable than ever. Deloitte in a contrast way, conduct investment to promote the future standard the organization through different areas such as: investment in Deloitte University (sponsoring student), investment in talent which lead to a variety of chance to ensure quality. The above activities enumerated above support the principal objective of Deloitte, ensuring quality in their service or performance. (Deloitte, 2017:52).
Deloitte is committed to innovating talent experience that allows their people to grow. Their human resources play an important role in this experience from recruitment to development and performance management to compensation. By helping to align people strategies with business needs they make a key contribution to the continuation of their business and career satisfaction. Deloitte Enterprise Value Map for Human Capital determines the relation between particular human capital dimensions and principal business conductors (revenue growth, operating margin, asset efficiency, and expectations). This analysis guide organisations tops managers to understand the link between business strategy and HR and make it soft to undertake an HR strategy that correspond with the needs of the firm. As Deloitte seek to become a premier career destination that gives valuable capacity with a high demand of work in a suitable environment (Deloitte, 2017:58).
Deloitte for the purpose of becoming better and increasing their qualities, they opt to adopt an accelerate growth and innovation. Deloitte provides tools such as technology recommendations that help conduct transformation, encourage productivity, and organize business performance. The temptation to hang onto the old version is not their norms, but being constantly in developing methods of innovation to keep the standard of the organization high makes it costly. Deloitte use technology as operations to manage its growth and activities. Deloitte differentiate itself with multi-disciplinarily neat least makes a, and the breadth and depth of its operation. As both an agency and a consultancy, Deloitte deliver the creative and digital capabilities that people need to reconstitute their business vision and conduct the last assignments results needed. Their bids are: Customer engagement solutions, Digital agency, Digital marketing, and Digital strategy and Enterprise digital engagement.
The vitality of human capital in organizations is primordial. Deloitte’s employees as his direct rivals run with this intention to drive distinctive client service and outstanding people development together with meaningful and purposeful impact. For Deloitte to keep differentiate themselves from competitors they have to: firstly, make training and development a continually part of daily operations, rather than an activity that goes only once or rarely a year. Secondly, foster a high impression culture by directing programs at complex workers who are pioneers for others of the workforce. Concerning the technology at Deloitte for growth and innovation, an advance department of value creation can be established for programming attractive solutions adapted for a broad type of organizations.
Step 3: Instituting policies and procedures that facilitates strategy execution.
According to an online article on the Deloitte website, Deloitte requires all employees to familiarize themselves with the global code of conduct of Deloitte, as well as all the policies and procedures of the company as this ensure consistency in service provided to clients.
In a 2010 report to the United Nations, Deloitte reported on their policies and procedures as well as the recent policy changes. Deloitte reviewed their current policies and procedures and identified relevant changes to be made and policies to be added that would benefit the employees of Deloitte.
From this, it is clear that Deloitte is willing to review and adapt their policies and procedures where necessary. This type of willingness to be flexible allows strategic implementation to happen in a way that removes the restrictions of policies and procedures.
Step 4: Adopting process management programs that drive continuous improvement in strategy execution activities.
STEP 4 BPM, SIX SIGMA, QUALITY
Despite the fact that BPM is ranked as a top priority by organisation, there is no common understanding of BPM ( Bandara, Harmon & Rosemann,2010) and no commonly agreed definition is available ( Vergidis, 2008 ) .Each definition might differ from the perspective of the stakeholder , for instance practitioners might define BPM in a different way than academics ( Lusk , Paley, & Sapnyi,2005 )
Stages of BPM adoption
Organisations typically go through five stages when adopting BPM (Rosemann, 2008)
An awareness of the benefits and methodologies of BPM has to occur within the organisation. In many cases adoption of BPM fails of a lack of deeper understanding of BPM ( Rosemann , The service portfolio of a BPM Center of Excellence, 2008 ).Lack of awareness is one of the biggest barriers to success ( Hill, Cantara, Olding, Rosser,& Sinur,2010) . As BPM has no classical home in an organisation it remains an ongoing challenge to find a business sponsor in the organisation (Rosemann 2008)
The awareness and understanding of BPM has to convert to desire to adopt BPM. An enthusiastic business sponsor is important in this stage of adoption as investing in organisational readiness is a success factor of adopting of BPM (Hill, Cantara, Olding, Rosser, & Sinur,2010)
Individual BPM Projects
When there is awareness individual BPM projects have to be set up, executed and monitored that then can be used to market and expand the BPM ideas. In this phase the organisation builds up BPM capabilities and credibility
Assuming that individual BPM projects have been successful, organisation should fit from multiple BPM projects to a governing and more centralized BPM program. In this stage an overall BPM methodology needs to be designed
After centralized BPM group is formed a roadmap for BPM projects is required. All services offered the BPM group can be positioned in a portfolio with two dimensions, demand and capability. Demand reflects the current organisational appetite for the BPM service and capability describes the readiness of the BPM group to provide a certain service. In such a two dimensional portfolios there are four possible quadrants
According to Olding (2007) since we now characterized BPM and described the stages in Deloitte of BPM adoption in organisation we go into the type BPM activities an organisation can perform .Regarding the definition of business processes and BOM we have already concluded that there is no common body of knowledge, we also see the lack of common body of knowledge in the description of BPM services
In the BPM literature number of common BPM activities can be identified, referred to in a different way. Academics refer to these activities in a so called “BPM life cycle” (Aalst, Hofstede, & Weske , 2003) ( Harrington, 1995) ( Smith & Fingar ,2003 ).
Benefits of BPM in organisation
The common thought behind the benefits of BPM is that better processes produce lower costs higher revenues, motivated employees and happier customers. There are a number of companies that have shown quite dramatic improvement of economics value buy process improvement even without process redesign Gartner indicates that companies can still expect operational improvement for any process by making the process explicit (Michelle Cantara ,2010)
The basic value proposition of BPM is that an organisation can process more work while improving quality and reducing effort. The business case for BPM can be based on three main benefits (Rudden, 2007).
The BPM solution eliminates manual data entry, reduces process cycle time and reduces manual and routing
The BPM solution provides better and faster exception handling, supports in the decision making process and ensure consistent execution of processes
The BPM solutions provides a platform to adapt to change faster and in more controlled fashion and support for new business model as they require new processes
Step 5: Installing Information and Operating Systems that enable company personnel to carry out their strategic roles proficiently.
It is critical that Deloitte protect their own data and can assure privacy for their people and member firm clients. In order for Deloitte to facilitate the movement of internal and member firm client data within and through the company information systems have to be line with global legal requirements. Deloitte has moved forward significantly on a new effort to further strengthen its compliance processes.
Deloitte’s global policy on information security requires member firms, including Deloitte Africa, to institute a wide range of security measures, covering areas such as virus protection, data backup and recovery, encryption, password authentication, access to systems, and network security.
Deloitte’s member firm compliance with security policies is tracked through an annual IT Standards, Risk and Maturity Assessment. Overall adherence to security policies at the global hosting center level are monitored through the Global Technology Services (GTS) Security Forum.
Deloitte developed a privacy self-assessment system to monitor privacy program maturity across their organization using 20 different criteria. This will help Deloitte and the member firms (including Deloitte Africa) understand which tools, if any, could further strengthen information protection and privacy within Deloitte. Deloitte’s information security specialists provide guidance to member firms to strengthen their information security regimes when necessary.
The Deloitte Global Information Security Office released a series of short videos to Deloitte professionals around the world to reinforce the safe use of online social media networks such as LinkedIn, Facebook, and others. The Deloitte U.S. member firm created additional videos on phishing, as well as laptop and PDA security, which were then made accessible to all other member firms. Additionally, role-based security, privacy, and ethics roadmaps with sample courseware and other materials have been created for member firms to use as a framework upon which to build local awareness curricula.
Step 6: Tying rewards and incentives directly to the achievement of performance targets.
Deloitte provides support and assistance to employees during milestone life moments.
Paid time off and holidays:
It gives eligible professionals the flexibility to manage time off in way that works best for them , the programming gives professionals an allotment of days that encompass vacation, personal and sick time, Eligibility and actual paid time accrual will depend on the professional ‘s position and possibly on their years of eligible service and to provide additional flexibility.
Medical, Dental and Vision:
Include competitive medical, dental and vision plans have five different national medical plans provide:
100% coverage for in network preventive services including well child, prostate testing. Access to quality care through national provider networks.
The ability to see a specialist without a referral, prescription drug coverage.
Lifeworks- provides assistance for choosing care or service and obtaining referrals to community programs, this programming offers resources including publications on a variety of parenting , education and aging issues.
Flexible working hours which allows employees the freedom to self-manage their time.
Study leave is a benefit which directly links to Deloitte’s strive to empower employees to further develop themselves through learning.
Step 7: Instilling a corporate culture that promotes good strategy execution.
The culture at Deloitte encourages that employees engage with each other in their attempts to achieve objectives and/or complete tasks. In the organisation employees often work together to ensure that the service offered to the clients of high quality and a satisfactory standard. Deloitte takes pride in in its ability to provide a work environment that is conducive for employee productivity. Deloitte also subjects its operations to innovation an effort to adapt to the ever-changing competitive landscape of the accounting services industry (Deloitte, 2018: Introduction, para.1.).
Deloitte promotes a culture of employees working together achieving goals and the performance objectives that have been set in an effort to achieve strategic goals. Deloitte also aims to create a culture whereby the employees engage freely amongst each other, in terms of work related matters, regardless of the positions they hold within then organisation as well as their academic ranking. They do this with the hope of ensuring that the employees can perform to their fullest potential and to a standard (Deloitte, 2018: Body, para.3.) which is required by Deloitte to achieve it’s strategic objective of “ensuring quality” (Deloitte, 2017:52).
A high performance culture is one with the “can do spirit” as a distinctive trait. This culture also takes pride in doing things, places much emphasis on accountability of employees, and has a results-oriented work climate where people go the extra mile in an effort to complete tasks, meet the deadlines, and achieve the goals (Gamble, Peteraf & Thompson, 2016:215). The culture at Deloitte would exhibit the description provided above.
Deloitte is facing the challenge of failing to clearly communicating its strategic objectives to its employees thus hindering strategy implementation. This may be a result of the size of the organisation as Deloitte is a multidimensional organisation and has established operations globally. The size of the company may a bottleneck in the sense that there are a major differences that are present between the countries of operations, such as language differences; differing work ethics; different cultural beliefs; etc., therefore strategy may not be translated differently and ultimately meaning and intent may be lost in translation.
The culture at Deloitte is one that places much priority on achieving performance and in this has neglected ensuring the thorough and accurate articulation and communication of strategy between the top level management of the organisation and the operational level. The employees at the operational level are the real implementers of strategy therefore if they do not fully comprehend the strategy then they will not be able to fully implement it successfully. This then indicates how critical it is that managers communicate the strategy accurately and efficiently to the employees, while also ensuring that the employees fully comprehend the strategy as well as their role and achieving the desired future state.
Step 8: Exerting strong leadership to drive execution forward and attain operating excellence.
As mention in the strategic objective, Ensuring Quality, Deloitte places a strong emphasis on leadership and the importance of the role that leadership play in strategic implementation. According to Deloitte’s Integrated Annual Report (2017:52), the company details the leadership plan and role in the strategy implementation. They mainly highlight that leadership will set the example for employees to follow. It is highlighted that as leaders, they should inspire the workforce to adopt the strategic direction.
According to the article by Dunlop, Firth and Lurie (2013), the implementation of strategy fails due to various reasons but mainly because of lack of proper translation of the strategy, failure to adapt the strategy and failure to sustain the strategy.
Considering the current implementation of strategy the Deloitte employees detailed in question 4 above, we recommend the following strategic implementation improvements to counter the above mentioned failures.
Proper translation of Strategy
One of the struggles that companies have with translation of the corporate strategy is getting buy in from the employees. We believe that this struggle occurs because employees feel that they are not consulted or taken into consideration when strategies are drawn up. We recommend that Deloitte create a strategy committee with elected members from all levels of the organization to represent the company in strategy creation. The aim of this committee is to get feedback and input from the employees upfront who can raise any concerns or hurdles about the strategy upfront. Employees will be more likely to buy in to the strategic direction with the comfort of knowing that their concerns and actual reality of their working conditions are properly considered through the voice of their peers.
By having a committee of individuals who represent all levels of the organization, the senior executives will hear of all shortfalls and bottlenecks in advance and they will be able to determine more accurately if the company has the relevant resources and capabilities to execute the strategy. If they find that they do not, they will be aware of what training, development and recruitment needs to be held in order to fill the gap.
Deloitte should consider re-evaluating the articulation of the strategy communication to ensure that the employees receiving the message understand the direction of the strategy and what is expected of them. Proper communication contributes to attaining buy-in from staff as they better relate and align to the strategy. The tools of communication that should be used should consider laments terms and jargon that are easily understood. We recommend that the members of the committee discussed above be the communicators to their peers. This removes the feeling of the strategy being a top-down command from senior executives.
Failure to adapt the strategy
It is common knowledge that people are resistant to change. One of the struggles of implementing corporate strategy is the stubbornness of employees to accept the new direction and focus. Internally companies need to consider the personalities that are employed and should consider how they will react to change. We recommend that any strategy implementation starts with change management to transition the employees correctly in the new strategy.
Deloitte as an auditing form mainly employs like-minded individuals. Mainly people with an accounting background. This like-mindedness can become a hindrance to creativity, innovation and different perspectives. We recommend that Deloitte try to diversify their recruits in order to gain a different set of skills and competencies.
Finally, a strategy should not be seen as set in stone. Strategies need to be flexible in that upon review, if the strategic direction is not as effective as planned, the direction needs to change. Many factors can influence a change in strategic direction both internally and externally therefore strategic planning should always factor in reviews and a contingency plan should change need to be implemented.
Failure to sustain the strategy
When strategies are designed, discussed and implemented, what is not considered is the current employee duties and responsibilities. Employees may be ridged and be unwilling to do anything over and above their job description there job descriptions that will require changes should be changed and the changes shared to the relevant employees.
The biggest issue with sustaining a strategy is the decline in motivation and drive of the employees. It is important for employees to maintain their motivation and belief in the strategic direction. We recommend that Deloitte align their employee’s performance measures to the strategic direction. Deloitte must furthermore consider how to incentivize employees during the implementation of the strategy if the results are positive. Suggested incentives are financial rewards, team lunches, paid vacations, etc.
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