Case Analysis of Egon Zehnder International

Egon Zehnder International (EZI) has grown steadily over the past 36 years. In these years, the

company has a certain value, the company's founder Zendell thinks the company's cornerstone is

never compromised. However, as the search industry has undergone tremendous changes in

recent years, and internal leadership within the company is shifting to the younger generation, it

has been suggested that companies need to change their values, strategies and final business

models to further advance this business. EZI's recruitment process is very strict. It will recruit

and upgrade local talent for all offices around the world. EZI ensures that all candidates have an

important business or consulting career background. All EZI consultants are graduate students,

and many people work in many countries or learn many languages and multiculturalism. Before

joining EZI, it is best to have 3 to 5 years work experience, preferably McKinsey. In 1999,

50/270 consultants at EZI were McKinsey alumni. Candidates would have to undergo between

25 and 40 interviews at 5 of the firm’s international sites. It the candidate fails at two of the

interviews, he/she would be rejected. Only 10% of the applied candidates were selected. The

candidates would be evaluated on cognitive abilities, building working relations, getting things

done and personal fit. After the candidate is selected, Zehnder would interview each and every

individual who joined the firm.

The McKinsey 7-S Framework
Strategy:

Egon Zehnder International is an advanced search service company in the United States. Its 1996

total revenue was 24.2 million US dollars. Dan Meil and is the main staff of the Engon Zehnder

and travels 270 days a year.

Structure:

In 1997, Egon Zehnder provided services in the four principles and practice groups (financial

services, consumer products, pharmaceuticals, telecommunications and high technology),

particularly in three areas: headhunting, management evaluation and corporate governance.

Systems:

None of the four partners conducted a census for strategic evaluation, but two partners proposed

this idea. They prepared all questions about their scope, core, partnership, and time period.

Shared Values:

Egon Zehnder aims to maintain its position as the fourth largest executive search firm in

the world by retaining the caliber of consultants it had in the past.

Skills:

Most of the consultants within the company are senior degree executives who represent 32

nationalities and 9 of the 48 offices are managed by foreign consultants. In the past 32 years,

EZ's turnover rate was slightly lower than 2%. Compared with the industry, EZ's annual turnover

is only 30%, which is far lower than its competitors. Globalization tends to show new industry
trends and encourage more foreign executives to participate in global operations, not only in

foreign offices but also in local markets.

Style:

Overall, the firm’s approach to recruitment, promotion, and compensation is positive in that it

stresses providing a stable environment for highly-qualified individuals to work together as a

team over a long period of time. The fact that highly qualified team players are thoroughly

screened also reduces the amount of training time that is required.

ENVIRONMENTAL SCREENING

Political:

 9/11 Attack on US
 Asia Struck by SARS scares
 War in Afghanistan and Iraq

Economical

 Industry is cyclical in nature.

 Detrimental impact due to economic downturn.
 Competitors growing inorganically and going public to access capital markets.

Social

• Fewer acceptances in US due to its foreign identity.

• Generation gap between consultants
• Loss of talent to competitors in US
Technological

• Upsurge of internet triggered a new wave of competition.

• High touch approach questioned when competitors begun offering internet based services

Key reasons for Egon Zehnder International’s (EZI’s) success as an

international executive search firm

EZI’s rigorous screening process, which allows it to find the right employees, and the high level

of retention of its employees, helps it provide its clients the best possible consultants to aid them

in finding candidates for high-level openings. In addition to hiring and retaining the best

candidates, EZI entire global network works as a single unit, increasing the likelihood that the

best candidate will be found. This can be attributed to the compensation system that EZI

employs and the pooling of income from all of its firms. This is different from other firms

whose compensation system encourages individual performance and weakens teamwork.

Critical challenges:

EZI adheres to its principles and has achieved a good reputation in the industry and a high degree

of employee satisfaction. Changing a system element that works well in the history of the

company may prove to be very harmful because EZI has spent a lot of effort to distinguish itself

from its competitors. If it starts to change itself and is in line with its competitors, it may lose its

current competitive advantage. This is due to its high-quality consultants, low conversion rates,

and good reputation for quality.

The critical challenges, in order, are

a) Changing environment due to technology and

b) Generation gap between older and younger consultants.

Growing within its Niche (1994-1997)

Key Issue:

As the demand of the global executive search services increased, EZ’s tended to open more

office under same corporate culture. Therefore, should Meiland look for not only the volunteers

to be in charge of the firm’s practice in emerging market but also somebody who can share the

responsibility with Meiland in the partnership for maintaining its position as the fourth largest

executive search firm in the world at that time?

Strategic Mission:
EgonZehnder is an executive search service firm especially for finance services,
consumer goods, pharmaceutical telecommunication and high-tech with well-established global
network.
Alternatives
Governance structure with
global centralization(current
strategy)
Transnational strategy
Related Constrained
Strategy (Multidivisional
structure)
Multidomestic Strategy
Pros
-Although the firm is running
the same function as 1994,
notable growth was still
achieved.
-Not many administrative
processes or procedures.
-Coordinate and integrated
decision.
-Effectively manage their
diversified areas.
-able to be adaptive with the
culture of each country.
-Able to reduce the burden of
CEO.
-Increase the empowerment of
employees
-to foster cooperation and
synergy.
-can share the divisional
facilities.
-the most effective form of
cooperation.
-more local responsiveness.
-Able to compete the industry
segment.
-facilitate the firm’s effort to
satisfy the local differences.
Cons
-All branch offices required to
report directly to Meiland
-Only one decision maker
-President needed to oversee
the firm’s 48offices.
-Still operating without a
networking computerized
system.
-Difficult to organize &
successfully manage.
-Costly organizational
structure.
-High complexity in structure
-Limit the cost of coordination
and inertia.
-inability to create the strong
global efficiency.
Evaluation

From the evaluation of the above alternative, transnational strategy is our recommended strategy

to implement for achieving the objectives of EgonZenhder which aim to maintain its position as

the fourth largest executive search firm in the world by retaining the caliber of consultants it had

in the past.

Key Result Area Strategy Objective

Human resource Management
Operational management
System
Promotion to infrastructural
-Hire more expatriate officers
-Training of divisional officers
to get the same corporate
culture for future extended
offices.
-Publish the regulations,
policies & detail procedures.
-Decentralization of
Management in some areas.
-Promote the internal
customers.
-Could cover the market
demands according to
emerging markets.
-To empower for decision-
making and responsibilities in
certain areas.
-To establish the partnership
for sharing the
responsibilities.
-Could help to reduce load of
CEO duties and
responsibilities.
-To motivate the employees.
-To attract and retain the
caliber of consultants.
Worldwide Divisional Governance Structure (Global Strategy, Currently using)

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Conclusion:

The EZI compensation system is best suited to corporate behavior. They equally prepared three

types of fixtures for their partner to express their concepts without commission or remuneration.

The difference is that there are changes in wages in order to achieve the standard of living. They

want to recruit people who believe in teamwork and believe that the team is successful rather

than successful. Second, they are highly concerned with experienced people because their efforts

are the real contributors to Egon's success and reputation. Work should be for the customer rather

than for compensation. As Egon considers expansion during recruitment, they are more willing

to recruit local talent. All partners evaluate according to certain criteria. They think that these

aspects include who is the problem solver, rationalization, trust teamwork, good communication,
audience, confidence, enthusiasm, creativity, friendliness, honesty, sociability, understanding and

understanding of norms And ethical values, run. In 1990, EZI experienced many environmental

changes. EZI brings changes to meet new competition trends. Zeng De also can reduce the risk

of threats from other organizations. They work hard to review those who can support

refurbishment, and support and support the quality of their customer's leadership. Their focus is

on quality rather than quantity, and they are used as the main indicator of excessive growth as a

weakness. As a result of all these changes, their executive committee has incorporated the

younger generation. Leadership is changing from elderly to young people. They are energetic

and motivated. This is a requirement.

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