Ernst and Young Organizational Structure

Ernst & Young Organizational Structure Ernst & Young is which trade as EY is one of the biggest multinational corporation offering professional services in the world. It is one of the big four audit and consultancy firms with its headquarters in London, United Kingdom. Studies have put it to be the third largest audit firm offering professional services after PwC and Deloitte according to the 2014 aggregated revenue. Its member firms in different countries operate as separate legal entities. The organization has employed over 212,000 professionals in its 700 offices across 150 countries where it has its subsidiaries (Ford, Bornstein & Pruitt, 2010). The company deals majorly in providing assurance services which include financial audit and consultancy in issues related to tax among others. The company also provides other advisory services to its clients who majorly include corporate and governments. In order to achieve all these, the company has formulated an organizational structure which spells out the functional units in management, the roles and responsibility of stakeholders and also elaborates the chain of command. To begin with, EY just like any typical corporate is governed by a Board of Directors chaired by a chairman. The Board of Directors in EY is referred to as Global Executive Board Members. This is the top most position in the management of the organization. they are charged with providing entrepreneurial culture and leadership to the management. Secondly, they are involved in setting the organization’s strategy in order to achieve the organizational long term goals. Thirdly, they work to make sure that the necessary resources needed by the organization such as human and financial resources are available to achieve the organization’s objectives. The board also reviews the performance of the overall management t+222s`eam. Lastly, the board is involved in setting the values and standards of the firm. The chairman heads the Board of Directors CHAIRMAN provides the leadership to the board and oversees making of decisions that affects the interests of the shareholders and other partners in the organization Just below the chairman we have the company’s CEO. This is the top most executive officer in the management of the organization. The major roles that the CEO plays in the organization are as stated below: First, he owns the vision of the firm. The CEO’s responsibility is to make sure that the organization is headed towards achieving this vision. ALSO the CEO is charged with overseeing the overall performance of the company. Most of the managers below him are accountable to him as far as the performances of their specific functional units are concerned. Below the CEO, we have the company’s secretary and other Global Executive board members whose functions are as follows:  Area Managing Partner who seats in the board of the Global Executives. The member countries are organized into four major regions. These include the EMEIA comprising of Europe, Middle East, India and Africa. We also have America, AsiaPacific and Japan as the other three regions. These regions have their own management team which acts independently but they are headed by the  team of managers Geographies- leads individual firms in each of the four regions who act independently to the other higher management. The company has empowered the managers in the specific areas to make their own decisions. The decisions made are only limited to the policies, values and goals set globally by the Global Executive Board.  They also have the typical division of firm in every country, the top, middle and lower management.  The top management comprises of the managing director and other executive officers referred to as partners. They are concerned with making the long-term decisions of the firm.  Secondly we have the middle management which comprises of the HR, Marketing, Functions , Procurement and Supply, Risk Management, Accounting and Support departments. These are headed by managers whose main roles include making short term decisions that affect the day to day activities of the firm.  Thirdly, we have the lower management which comprises of supervisors, field managers and line managers whose main role is to oversee the daily operations of the firm.  Below the lower management we have the employees whose role is to take up duties allocated to them by the lower management in order to help the organization accomplish its goals. The organizational structure O have discussed earlier has been in effect since the company went global in 1989. Since then the company has introduced a number of changes to its organizational structure in order to improve its performance and also address some of the management challenges facing the structure. Over the years, the organization has tried to overcome some of these challenges. However, some of the challenges related to the organization’s management brought about by the long complex structure are still affecting the smooth operations of the firm. EY is known to be one of the multinationals that has a very tough central management strategy. The different subsidiaries in the individual member countries tend to operate as separate legal entities but under strict supervision and control from the Global Executive Member Boards. This is because each firm in the member country is managed and controlled solely by an Executive partner who seats on the Board of Global Executives. This therefore derails the efficiency and speed of decision making thereby making it difficult for individual managers to make timely decisions. The Executive partners in the firms sometimes use their positions for the own personal gains. This at times leads to jeopardizing of the whole system leading to cases of misconduct and accounting scandals. These are some of the challenges that still face the EY until today because of the long and complex organization structure (Alavi & Leidner, 1999).