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Introduction
Strategy audit refers to a concept that implements the process of decision making. It aims at evaluating the risks of management and analyzing the functions of corporate institutions. It also focuses on the holistic examination of the present performance, environment, strategies applied and control of the strategies.
It determines the organizational strengths and weaknesses exposing problems that exist in the organization. It is, therefore, a crucial tool that facilitates decision making which is a major pillar in the prosperity of an organization. Therefore, strategy audit is an inevitable process for any successful organization.
In this paper, we shall focus on the Delloite and Touché Company.
Description
Deloitte and Touché Company is an international private company. In the 1800s, its conception was started by Deloitte when he was staying within London. They developed the company to offer professional services.
The services included financial advisory, assurance, enterprise risk, tax advisory, and consultation among others. It has employed about 193000 employees and operates on one hundred and fifty countries in the world.
Background and Context
Carrying out a strategic audit for this company is appropriate due to various reasons. First, the company has a long history that gives it a sense of popularity. As a result, the company meets enormous challenges and management’s risks that should be audited.
Secondly, the company has a huge organization capacity that comprises of 150 branches around the world.
Consequently, there arise a lot of strategic risks in the process of coordinating the branches and working harmoniously. The two factors also offer the necessary familiarity with the company and make the analysis easy.
The company deals with customers who pay a lot of money for services. Failure to deliver quality services would lead to loss of customers to the competitors. We, therefore, aim at understanding the various pitfalls that would lead to the downfall of the company.
The possible pitfalls would be organizational, structural or financial. Although we might not be able to make changes in the company, this analysis will sharpen personal and strategic skills that we can apply in other organizations.
Summary of Analysis
We seek to determine the strengths and weaknesses of the company. These two aspects of the company are the major pillars of its strategic audit. Consequently, the approach provides the necessary knowledge that allows the company to suppress the weaknesses.
The company has a good business foundation within 150 countries of the world. This has enabled this company to capture a wide market for its products. Also, the network has enabled it to compete against its competitors.
The company is enjoying economic competence and solvency by concentrating its focus on large consulting firms. This has built large revenues that have amounted to about thirty two billion in US dollars. It offers a good working environment that enables it to tap competitive staff from the market.
Many of the workers who were granted a chance to work for Deloitte and Touché considered it to be a fortune employer.
On the other hand, the company has several challenges that need to be addressed. First, the company has faced a lot of criticisms and operational failure. For example, the court system of California reported termination of a project that was assigned to Deloitte and Touché Company.
They reported that they had allocated $260 million for the project. During termination, the company had used $500 million for the project and had not set up any court to operation.
In another case, the commission of security and exchange reported that Deloitte had to pay $50 to Adelphia Communication Company due to flaws in their financial statement.
It is clear that the company is confronted by serious set up failures. The failures can lead to customer dissatisfaction and financial breakdown of the company.
This company has, also, portrayed a state of incompetence. For example, Australian Custom Department hired this company to make a report about illegal tobacco. The department described that the report was misleading. When Deloitte repeated this work, the department declared the report as baseless (Morgan 1996).
This was a huge blow to the company. It portrayed a lack of competence on the company’s side. In addition, it induces the customer to lose confidence and trust for future services in the company.
It is clear that the company should aim at eliminating weaknesses that are mentioned above and stop relying fully on their strong brand.
Summary of Findings
The company benefits from strong brands that it has managed to make over the years. These brands give the company enough reputation that earns credibility and reliability.
It is clear that evolution of the company has experienced a lot of rebranding. Most customers have identified the company by the present brand. Consequently, rebranding is not a good choice for the company unless it is necessary.
The company has issues with quality of services they offer. Some customers have raised issues that portray dissatisfaction and mistrust in the company. The criticism arising from various companies has determined the company as wanting. In fact, some of the criticism arose recently.
A credible example is the allegations concerning Iranian Standard Chartered Bank. Deloitte was needed to explain the allegations suggesting that it helped the bank to make fraud money attempting to cover a loss.
The company practices global and international economies through branching in many countries. However, there exists insufficient supervision of branches by the company’s management.
In this case, many firms have collaborated with the company. These firms originate from different companies around the world. Consequently, coordinating the branches and inducing them to work harmoniously in the same platform is a great challenge.
Recommendations
There are various recommendations that will help the company to retain economic power that sustain customers. First, the company should strengthen inside-out strategy.
This implies that they should focus on the core strengths of the company to enhance change, develop services and encourage discovery. Therefore, the company aims at achieving efficiency and adapting to variation of situations in the market.
The company should also adopt the spirit of value maximization rather than profit maximization. In this case, the company aims at meeting the customers’ expectations alongside making profits. However, the two concepts must be balanced in a bid to realize economic solvency of the company.
Diligent monitoring and communication with customers during projects should be considered in a desirable manner. For example, the Electrical Holding Company of Guangdong Kelon accused Deloitte for lack of communication.
They alleged that the company did not inform them about the poor financial position. Timely communication and supervision play a crucial role in determining the credibility of services.
Value Creation and Value Capture
Creating value and capturing value are essential factors of an organization that succeeds financially. In creating value, the company should ensure that customers are satisfied by the services. It, also, aims at creating a good organizational reputation that attracts the customers.
In this case, Deloitte should ensure making of individualized considerations, employment of competitive experts and creation of a wide coverage. In value capturing, the company aims at retaining its solvency and satisfying the current customers. It uses the available strengths to gain customers.
Capturing is done through offers, sponsorship of customers’ events and offering related services. This ensures that a company maintains and earns their trust leading to solvency.
Making Tough Decisions
The toughest decision Deloitte Company will make is related to value and profit maximization. The company should make a hard decision of choosing to incorporate value maximization. In this case, it will focus on the customers’ satisfaction and maintenance of profits made in the company.
The company also needs to make a tough choice of investing on competent staff and building a strong software system. For example, there was a great problem with the software of the company in schools of Los Angeles.
In this case, the company’s systems incurred an error that led to underpayment, overpayment and lack of payment to teachers. The case reduced the credibility of the company greatly.
Deloitte and Touché and Competitors
The company’s experience is worth of competition from other companies that offer similar services. A credible example is Coopers & Lybrand Company which is called Price Water Coopers presently. It comprises of Deloitte elements that refused to merge with Touché Ross and make Deloitte &Touché.
On the face of competition, the company should adopt some strategies to provide competitive advantage. First, they should ensure that quality services are offered to emboss efficiency and accuracy. Quality assurance ensures that there is no loss of clients to other companies. It, also, attracts more clients who are seeking services from the company.
Severally, prices of services exceed the original budget that the company had given. This case was evident in California court system. In this case, the company used $ 500 million rather than the original amount set at $260 million. This is a great business menace that should be curbed.
As a result, the company should plan for expenditure before starting any project. This plan helps the company to project and predict the possible cost of operation.
Therefore, it eliminates the possibility of demanding for additional funds. These strategies can help the company to maintain its customers and satisfy their needs without conflict.
Design of Deloitte &Touch Company
Organization of Deloitte and Touché Company
The company comprises of three members. These members are Deloitte, Touché and Tohmatsu. This implies that Deloitte and Touché Company harbor a fairly complex organization. The organization limits the liabilities for any actions in the other components of the company.
The firms within the company are independent. They do not have authority over each other. At the same time, the members are not responsible for the mistakes performed by other members since there is no dependency.
Its structure gives individual members the right to join International Forum of Accounts (IFAC). The International Forum of Accounts is a forum that forms a network of accounting in the global scope.
It, also, has a complex global organization that includes countries that have collaborated with their services. In this case, its headquarters are in USA. Particularly, it is found in New York at 30 Rockefeller Plaza.
The headquarters are the common administrative point/centers. It has the senior company auditors of the company. The headquarters coordinate and monitor operations of branches in the world.
The company’s staff has diverse expertise. These experts include retired US marines, entrepreneurs, investors, politicians, bank’s CEOs, and governors among others.
The diversification of staff enables the organization to pool diverse knowledge and experience. The diversification has also played a crucial role in ensuring prosperity of the company.
Conclusion
From the analysis, the company is enjoying a fair stability within its structure and organization. However, we understand that it has few challenges within its organization. A quick action to meet those challenges would enable the company to make financial progress.
Reference
Morgan, M 1996, A transcript of proceedings of the Australian Tobacco Quality Towards 2001 seminar, Department of Natural Resources and Environment, Melbourne.
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