Professional Documents
Culture Documents
Group 9
Professor
Lima - Perú
2023 - 02
ABSTRACT
This paper examines the strategic direction and performance of Ernst & Young (EY), a global
leader in audit, tax, transaction advisory and management consulting services. The analysis
is based on comprehensive environmental and internal analyses that provide insights into
the challenges and opportunities of the external business environment as well as EY's
internal operating structures. The environmental analyses take into account macroeconomic,
political, social and technological factors, while the internal analyses focus on organizational
strengths and weaknesses.
The focus is on evaluating EY's strategic decisions in light of the identified influencing
factors. Both short-term and long-term strategies are analyzed in order to understand EY's
competitive position in a dynamic global market. The findings of this thesis should not only
help to understand EY's current position, but also to derive strategic recommendations for
future developments and challenges.
Table of Contents
We will begin our analysis by examining the external and internal environment in
which EY operates. Regarding the external environment, we will perform a PESTLE analysis
to identify the political, economic, social, technological, legal and environmental factors that
may affect the company. We will also examine the competitive forces in the industry using
Porter's five forces model.
Regarding the internal analysis, we will evaluate the corporate resources and
capabilities of EY, as well as its distinctive competencies. We will also examine the
company's corporate values, organizational culture and corporate governance. Additionally,
we will conduct an institutional analysis of the EY host country to understand the challenges
and opportunities it faces in that environment. In terms of situational analysis, we will
conduct a SWOT analysis to identify the strengths, weaknesses, opportunities and threats of
EY. This will allow us to better understand the competitive position of the company and the
possible strategies it can adopt.
Once the analysis is complete, we will focus on strategy formulation. We will define
the vision, mission and objectives of EY, and explore the corporate and commercial
strategies it can implement. We will also consider policies that can support the
implementation of these strategies. Finally, we will address the implementation and control of
the strategies. We will discuss the different types of programs and tactics that EY can use,
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as well as the organizational structure it can adopt. We will also consider the controls that
can be implemented to evaluate corporate performance and measure the value created.
In summary, this research work will provide a comprehensive view of EY's global
business strategy. Through environmental analysis, internal and situational analysis, strategy
formulation, and strategy implementation and control, we hope to gain a deep understanding
of how the company can compete and succeed in the global market.
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CHAPTER I: ENVIRONMENTAL SCANNING
External Analysis
Ernst & Young (EY), a global leader in professional services, navigates a unique set
of environmental challenges, distinct from industries like manufacturing or extraction, which
have more direct environmental impacts. Here’s a closer look at the challenges and potential
strategies:
Operational Disruptions:
Travel Impacts:
● Implications: Frequent travel is a norm at EY, and disruptions in air travel can lead
to delays and increased operational costs, not to mention the added carbon footprint.
● Strategies: Investing in state-of-the-art teleconferencing and virtual collaboration
tools can minimize the need for physical travel. Additionally, participating in carbon
offset programs can help mitigate the environmental impact of essential travel.
Regulatory Changes:
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Client Expectations:
Reputational Risks:
● Implications: Stakeholders, including clients, employees, and the public, are more
environmentally conscious than ever. Any perceived lack of environmental
responsibility can harm EY’s reputation.
● Strategies: Transparent communication about EY’s environmental initiatives and a
genuine commitment to sustainability can build trust among stakeholders and
mitigate reputational risks.
Figure 1
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Politics
Tax Policies: There are constant changes of the tax policies in the different countries
E&Y is operating which influence the demand and the type of consulting requests. One
example is the introduction of electronic invoicing in Perú. (Edicom, 2023)
Economy
Economic Growth: Covid-19 was not just harmful regarding health reasons, it also
damaged companies and business affairs and led in a lot of countries to a slowed down
economic growth. (UN News, 2022)
Exchange Rates: Because of the international activities of E&Y, the company is also
influenced by exchange rates regarding costs and pricing of their services.
Society
Scandals: In 2022 there was a scandal because E&Y cheated on the ethics section
of the Certified Public Accountant exam. The media reporting about it led to a loss in brand
trust for the company. (Gibson, 2022)
Workforce: For their services E&Y has a need for high-educated employees. In some
countries e.g. Austria and Germany, there is at the moment a great problem of getting
employees in general. (ORF, 2023)
Technology
Digitalization: Digitalization is influencing not just businesses but the whole world in
general. Therefore it’s just clear that also the demand for specific consulting services in this
area is rising. (Qureshi, 2022)
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Environment
Climate Change: The whole world and therefore also all the companies and
businesses are affected by the rapid climate change. Organizations are needing consulting
for this topic and E&Y can put a focus on it. (Scott, 2019)
Law
Tax Laws: The laws regarding taxes are different all over the world. Because of the
international operations of E&Y they are influenced by these differences and have to keep
an eye on it. (Gill, 2022)
Environmental Regulations: In addition to the tax laws also regulations regarding the
environment are varying between countries. E&Y is impacted because of their international
services and has to be up to date all the time. (Bennett, 2019)
Table 1
Rivalry among EY competes with other "Big Intense competition might pressure prices
existing Four" firms and other and squeeze profit margins.
competitors consulting and auditing firms.
Threat of new The barrier to entry is high, but EY needs to stay alert to innovations and
entrants smaller firms might enter adapt quickly to maintain its market position.
specific niches.
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Threat of substitute Technological solutions, like EY needs to innovate and offer additional or
products automated auditing software. differentiated services to maintain its
relevance.
Bargaining power Large clients might have EY might need to offer more favorable terms
of buyers significant bargaining power. or additional services to attract and retain big
clients.
Internal Analysis
1. Human Capital: ERNST AND YOUNG is Known for its highly skilled and diverse
workforce, which is distributed across the areas such as Consulting, Tax, Law,
Among others. This Workforce enables EY to consistently compete at the front of the
“Big Four”, the four leading consulting firms in the world.
2. Technological Infrastructure: One of the main services that EY offers to its clients is
IT Services, which comes from robust Technology and data analytics capabilities,
including digital transformation, Cybersecurity and data analytics.
3. Global Network: ERNST AND YOUNG has numerous offices and professionals
around the world. This is highly beneficial as it facilitates collaboration to serve clients
on a global scale.
If we are talking about Competencies, EY has a very large extension of services, like
Advisory and Consulting Services, Audit and Assurance Services and Sustainability, all
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these services that EY offers, are highly sought after for enhancing the performance of
businesses.
According with EY Page, the CEO, Carmine Di Sibio, tell us “ Our Values define who
we are”, and this refers to :
Despite being simple words, within EY, these values help us secure projects and enable us
to continue progressing vertically over time.
Corporate Culture
1. Innovation: Ey corporate culture, impulse the employees to think creatively and stay
at the expectations or ideas of the industry trends.
2. Client Centric: The firm has been characterized by its relationship and focus on the
client, in all the aspects. At the moment of the proposal of work, EY tries to learn the
necessity of the client, and propose the best option they can offer. During the service,
EY always keeps informing the client of the process of the project, even if they are
with delay, they keep pushing to be on date. After the project, EY is expecting the
questions of the Client in case applied.
EY does not have a board of directors in its corporate governance because it is a civil
society. Ey top management includes Partners, and key senior managers. Together, they
aim for the continuous growth of the firm.
Formal institutions
EY’s main host country is Peru, this country has many regulations towards EY’s
services.
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In Peru, SUNAT is the entity that regulates national customs and taxes. EY must
adhere to SUNAT’s regulations and requirements when giving tax-related services.
It 's an association that gathers all certified public accountants in Lima and represents
them both national and international. EY accountants must be part of this association
because they must adhere to principles and standards given by this association
SMV is a regulatory entity for the securities market in Peru. Its objective is to protect
inversionist and supervised market transparency. EY provides services of financial reporting
of companies listed in Peru’s stock exchange which are under SMV regulations.
This entity’s objective is to help fiscal balance and sustainability, harmonize the
goods and services’ market. EY professionals advise clients under MEF’s regulations.
Informal Institutions
EY believes that inclusion and diversity means growth because diverse perspectives
help in decision making, enhance imagination and make a stronger culture.
Sustainability
For example, helping in many projects such as Enseña Perú, scholarships, collect
data, among others. EY professionals also work Pro bono, meaning that they offer free
services for non-profit companies like different kinds of foundations and hospitals.
Professional Networking
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EY is recognized among the “100 Peruvian companies more responsible and with
better corporate government” and is certified for the “Good Employers Association”, meaning
that EY can build good relationships with clients, employees and industry’s colleagues.
Anticorruption
This matter is one of the priorities of EY, it maintains its reputation because of the
process established, this starts by respecting global policies, supervising the codes and
internal policies, course of anticorruption and communicating anti-bribery policies.
Principles
Gender equity
EY promotes gender equality. In 2022, EY had 54% of women workers and 46% of
men workers, also had employees over 50 years old.
Figure 2
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Power Distance
Peru's high Power Distance Index (PDI) is 67 at the organizational level. In general,
the country exhibits a prevalence of tall and centralized structural configurations. Similarly,
there is a notable presence of supervisory staff and wage disparities. Some analysts
attribute Peru's elevated PDI score to the historically structured and centralized Inca empire,
while others contend that it has been perpetuated by colonial and authoritarian governments,
as well as the influence of the church. Nevertheless, lower-ranking individuals still perceive
superiors as challenging to approach and harbor distrust toward them. Superiors, in turn,
tend to view subordinates as distinct and emphasize the importance of respect, especially
when subordinates belong to black or indigenous backgrounds. (Hofstede Insights, n.d.)
So, Peru has a relatively high power distance culture, which means that hierarchies
in organizations are respected, and individuals may expect clear direction from superiors. In
a business context like EY, this suggests that there might be a more hierarchical structure,
with a clear chain of command and decision-making concentrated at the top.
Peru exhibits a notably collectivistic score of 16, which aligns with the prevalent trend
in many other Latin American nations. As a result, it's worth noting that people in Peru, on
the whole, tend to view large corporations as appealing. This sentiment is especially
pronounced among blue-collar workers, who engage with their organizations on a moral
rather than purely calculative basis. Managers, meanwhile, tend to uphold more traditional
viewpoints and are gradually warming up to the idea of encouraging employee initiative and
group activities. In general, they prioritize conformity and value job security over autonomy.
(Hofstede Insights, n.d.)
So, Peru leans more towards collectivism. People tend to have strong family and
community ties. In the context of EY, this might translate into a strong emphasis on
teamwork and collaboration. Employees may expect a workplace that values personal
relationships and group cohesion.
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relationships and family over the pursuit of recognition or wealth, and the marginal
importance attributed to work by substantial segments of the population. In an EY office in
Peru, you might find a blend of competitiveness and a focus on long-term relationships.
(Hofstede Insights, n.d.)
Uncertainty Avoidance
Perú records a notable high score of 87 on the Uncertainty Avoidance Index (UAI), a
trend commonly observed in many Latin American nations with historical ties to the Spanish
kingdom. These societies exhibit a pronounced inclination towards the establishment of rules
and complex legal systems as a means of organizing societal life. Paradoxically, the
individual commitment to adhering to these laws tends to be comparatively low. This
discrepancy leads to issues such as widespread corruption and a significant presence of the
black market. (Hofstede Insights, n.d.)
EY might be more open to exploring new and innovative approaches to its services,
venturing into emerging markets, or adopting cutting-edge technologies. But also, might
readily adjust to market fluctuations, client demands, and regulatory changes, without being
overly constrained by rigid rules and processes.
Peruvian culture registers a modest score of 25, indicating a strong inclination toward
normative values over pragmatism. In such societies, there is a pronounced emphasis on
ascertaining absolute truths, and people tend to adopt normative thinking. They hold deep
respect for traditional values, exhibit a relatively limited inclination to save for the future, and
prioritize the attainment of swift outcomes. (Hofstede Insights, n.d.)
Indulgence.
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EY can consider this when establishing policies and expectations for employees.
They may need to provide reasonable flexibility to accommodate employees' desires to
enjoy life outside of work. Also, EY will need to be aware of the social norms and values
related to indulgence in the local culture. This includes understanding what is considered
acceptable behavior in social settings and how it might impact workplace dynamics.
Ethical Challenges. There are a huge number of ethical challenges for EY in Perú,
but for its business line there are three main one that are faced by this company:
2. Normative Compliance
In every advisory, EY must be sure that every service given by them follows the
ethics regulations and normatives of the jurisdiction where it operates. It includes contable
norms, auditory regulations, personal data laws and prosecutors regulations. This challenge
includes the integrity challenge, because EY must ensure integrity in every auditory process,
avoiding any kind of data or financial information mishandling made by clients. In Perú this
challenge became really important because of the huge presence of corruption in the
country.
3. Confidentiality
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EY has a well-established global code of ethics, which according to the company is
based on their shared values and built from their purpose and ambition. The code includes 5
areas of activities and the ethics practices related to them: 1) Work with others; 2) Work with
clients and others; 3) Act with professional integrity; 4) Maintain our objectivity and
independence; and 5) Protect data, information and intellectual capital. Most of these
practices established by EY respond to the challenges mentioned before. (Ernst & Young,
2023)
- Work with clients and others: Inside this area, EY take into consideration
normative compliance, because it highlight the need of keeping the trust that
customers place in the company, but pointing out that they will stop working
with any client that places EY employees undue pressure or threatens them
in the exercise of their duties professionals. In addition, the code rejects
illegal or unethical business practices in all circumstances and also avoids
working with any client whose rules are incompatible with our Global Code of
Conduct. (Ernst & Young, 2023)
- Act with professional integrity: This area responds to the normative
compliance challenge, because it includes important statements related to
documentation activities. The code says that EY never destroy or modify
documents, nor recommend its destruction or alteration, for no illegal or
improper reason; instead, they file and store documentation properly, which is
also related to the confidentiality challenge. (Ernst & Young, 2023)
- Maintain our objectivity and independence: This area is directly related to the
Independence and Conflict of interests challenge, because the code states
that EY avoids relationships that affect, or that may appear to affect our
objectivity and independence; also, EY monitorates their independence
constantly. (Ernst & Young, 2023)
- 5) Protect data, information and intellectual capital: This area is directly
related to the Confidentiality challenge, because the code states that EY
respects and protects confidential data, only sharing it if necessary for
business purposes in compliance with policies and laws. Also, it says that EY
takes proactive measures to protect personal or confidential documents,
devices, and data by following your security policies. (Ernst & Young, 2023)
Apart from that, EY also cares about social responsibility, indeed, the company has
their own social responsibility program called “EY Ripples”, which is focused on boosting its
employees to use their abilities, knowledge and experience to positively impact millions of
people lifes, specifically on the local communities lives depending of companies location.
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The program incorporates the principles of responsibility, sustainability and inclusive growth
throughout to demonstrate that they meet the highest standards of ethics. (Soulé, 2020)
For that reason, in 2022, EY received from the “Peru sostenible” association an 11º
award for being socially responsible. This award was backed up by CEMEFI, the eleventh
edition of the Socially Responsible Company Distinction (DESR), which is a management
tool that evaluates environmental, social and governance aspects of organizations in relation
to indicators related to the strategy of sustainability, eco-efficiency, diversity and inclusion,
development of human capital, climate change, Good Corporate Governance, ethics and
transparency, human rights, among others, and recognizes best business practices.
(Mishima, 2022)
Additionally, this year (2023), EY has developed its first Sustainability Summit where
leaders of national and international companies discuss the main issues on the
environmental, social and governance agenda. Ey considers it is important to act in the face
of the environmental crisis with initiatives such as the EY Sustainability Summit so that
decision makers can share ideas and exchange experiences with the aim of enriching their
projects and continuing to improve their processes. (García, 2023)
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Situational (SWOT) análisis
Strengths Weakness
S1. Imperious position in the consulting market. W1. Lack of coordination which causes a slow motion decline
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S2.Recognition as the second financial consulting entity with the .
largest number of clients1. W2. Litigation that affects the brand position
S3.Financial brand with global reach2. W3. Low Effort and Commitment in Research and
S4.Workers with globally competent experience Development
W4. Doubts about the Confidentiality of Client Data
Opportunities Threats
O1. World's Most Attractive Professional Services Employer4. T1.Government policies
O2. Focus on sustainability and community well-being5. T2.Sighting of a new pandemic6
O3. Company belonging to the “Big Four”. T3.Controversies in the public sphere
O4. Strategic alliances and collaboration agreements T4. Currency Fluctuation Risk
1
Private Banker International. (2020). Top 20 global M&A financial advisers for Q1–Q3 2020 revealed.
https://www.privatebankerinternational.com/news/deal-news/top-20-global-ma-financial-advisers-for-q1-q3-2020-revealed/?cf-view
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Ernst & Young. (2023). Our offices.
https://www.ey.com/es_pe/locations#:~:text=Con%20m%C3%A1s%20de%20700%20oficinas,conocimiento%20local%20con%20experiencia%20global
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El país (2023).El fiasco de EY provocará un declive a cámara lenta.https://cincodias.elpais.com/opinion/2023-04-27/el-fiasco-de-ey-provocara-un-declive-a-camara-lenta.html
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Ernst & Young. (2023). EY again ranked as the most attractive professional services company by Universum and rises in the "World's Best Workplaces".
https://www.ey.com/es_pe/news/2019/10/ey-again-rated-1-most-attractive-professional-services-employer-by-universum-and-climbs-world-s-best-workplaces-list
5
Ernst & Young. (2023). Sustainability. https://www.ey.com/es_pe/sustainability
6
National Geographic España (2023).Who warns about the next pandemic: are we prepared?
https://www.nationalgeographic.com.es/ciencia/amenaza-nueva-pandemia-oms_19965
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Strengths.
It has a very significant position within the business world, because EY has various
services such as auditing, taxes and legal advice, thus satisfying the different needs of its
clients.
S2. Recognition as the second financial consulting entity with the largest number of clients.
EY has 700 offices in more than approximately 150 countries, thus becoming a
globally competent service provider. It also has around 300,000 employees, who have the
best intellectual abilities (Ernst & Young, 2023).
Being an internationally known company, the demand for jobs for this company
usually attracts an endless number of competent professionals, meeting the highest
standards that the company usually needs.
Weakness.
By trying to separate its joint services (audits and consultancies), the company
begins to have a lack of control in the organization of its activities and begins with the
elimination of workers and an impact on the economic situation.
EY faces numerous legal claims, including scandals and allegations of fraud, such
as the case involving Lehman Brothers, which have negatively affected the company's
reputation.
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research centers.
W4. Doubts about the Confidentiality of Client Data
In the past, it has been alleged that EY shared confidential information about its clients.
These misunderstandings can undermine clients' trust in EY and lead them to consider
switching to a competitor.
Opportunities.
The company has a sustainable area that has 4 approaches: Sustainability in the
company, Sustainability in the financial industry, Climate change services and EY's carbon
ambition (Ernst & Young, 2023). Thus becoming a company with a social conscience and
that does not only seek profit.
Threats.
T1. Government policies
Being present in different parts of the world, the different establishment of laws can
cause poor management within countries, since when addressing a new bill or its approval, it
can generate a lack of control for a certain time.
T2. Sighting of a new pandemic
National Geographic Spain (2023) acts as an indirect communication channel for the
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World Health Organization, and tells us that we are likely to experience a new pandemic
situation, which may be much more serious than that of COVID 19. This would be
threatening. for the financial sector, since applying for a new job would take time and too
much money.
T3 Controversies in the public sphere
EY has been involved in various scandals related to accounting irregularities and
lawsuits related to commercial agreements beneficial to its clients. Likewise, the company
has faced accusations of gender discrimination towards its employees. These incidents have
negatively affected EY's reputation
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CHAPTER II: STRATEGY FORMULATION
Vision
We're building the workplace of the future at EY, a place that's smarter, more inclusive, more
dynamic and more flexible. We're embracing change, and helping our clients to adapt - to
create more inclusive economic growth. (Comparably, 2023)
Mission
At EY, our purpose is Building a better working world. The insights and quality services we
provide help build trust and confidence in the capital markets and in economies the world
over. We develop outstanding leaders who team to deliver on our promises to all of our
stakeholders. In so doing, we play a critical role in building a better working world for our
people, for our clients and for our communities. (Comparably, 2023)
Strategies
Corporate strategies:
Directional Strategies
● Growth:
The basic form is concentration and the Strategic is based on Horizontal growth. The
company operates in multiple geographic locations, at the same point on an industry’s value
chain.
The entry of EY is through Joint Venture, because it has cooperative alliances among
independent companies, to participate in commercial activities for mutual, providing inventive
platform solutions hosted on the cloud and generating economic gain.
These are some of the companies to deal with (EY, 2023) : Adobe, Aera, AHB,
Archer, Asapp, Automation Anywhere, Blackline, SS&C Blue Prism,
BlueYonder,Broadhaven, B-Yond, Celonis, Ceridian, Cisco, Crowdstrike, Dell, Duck Creek,
Edgeverve, Wolters Kluwer, Guidewire, FIS, Fadata, EXL, Infosys, Insurity, IBM, Microsoft,
P&G, SAP, Nokia, etc.
● Stability
The stability strategy revolves around the concept of a Pause/Proceed with Caution
approach. It operates under the belief that capital and talent will shift from organizations
focused solely on shareholder value to those dedicated to generating long-term value for a
diverse set of stakeholders, including employees, consumers, suppliers, communities,
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government, investors, and shareholders. This becomes particularly noteworthy during a
pause, representing an opportunity to regroup before resuming a growth or retrenchment
strategy.
“Organizations that anchor their strategies to a meaningful purpose, with a focus on
creating long-term sustainable impact among stakeholders, are better positioned to benefit
from, demonstrate and measure the value they create” Ernest and Young (2023)
● Retrenchment
Turnaround strategy: This is because EY emphasizes the enhancement of
operational efficiency, most suitable when a corporation's issues are widespread but not yet
critical.
Contraction Phase: The company has The Embankment Project for Inclusive
Capitalism (EPIC) and a recent participation in the development of Stakeholder Capitalism
Metrics in association with the WEF IBC, which ensures an initial effort to quickly “stop the
bleeding” with an overall reduction in size and costs.
Portfolio Analysis
● BCG Matrix:
In order to make the BCG matrix, we must know the main services that EY has within
its product portfolio. For them we show the following relationship:
○ Strategy by EY-Parthenon
○ Consultancy
○ Talent and the workforce
○ Transactions and corporate finance
○ Audit and Finance
○ Taxes
○ EY Law - Legal Services
○ Technology
○ Managed services
○ EY Private
○ Sustainability at EY
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Figure 3
BCG Matrix
Parenting Strategy
- Portfolio Management:
EY has excellent analysis of its product portfolios, given that 40% of current leading
companies face extinction in the next decade. That is why corporate entrepreneurship could
be the key to innovation, and its products may be the best option for independent
companies.
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The company recognizes the complexity of running a business individually, facing
challenges that cannot be addressed independently. For this reason, EY teams collaborate
with a broad ecosystem of partners, including global strategic alliances, to provide the
necessary technology, skills and knowledge. This approach aims to assist clients in creating
long-term value and facilitating their rapid and extensive transformation.
Marketing
Actualmente Ernst & Young posee un área de Marketing y comunicaciones, la cual
emite comunicaciones internas y externas, para crear un posicionamiento eficiente dentro
de su clientela y su futura clientela.
● Internal:
○ Daily News: A daily communication distributed to all employees in the
department, summarizing news from various virtual newspapers. It also
includes information about employees' birthdays and updates on company
news from any media source.
○ Mercado Persa EY: A weekly communication sent to all employees in the
department, summarizing a space where employees can showcase and
promote any items they have for sale.
○ Magazine Y: A weekly communication sent to all employees in the
department, featuring employee experiences and promoting internal company
topics.
○ Merchandising: Currently, this involves the printing and distribution of
notebooks branded with the company logo. In the past, the company engaged
in merchandising with items such as notebooks, pens, buttons, t-shirts, and
caps. The company has internal channels for communicating values and the
company brand.
● External:
○ Communications: The company's external communications are sporadic and
typically aligned with specific events. Promotion and merchandising efforts
are carried out for these events, targeting clients and potential customers.
Currently, there is a national and international website where anyone can
access information about the company, including values, services, and
communications.
Policies
This policy has 7 objectives: 1) Guarantee the compliance of the highest standard of
occupational health and safety policy; 2) Asses risks regularly to ensure improvement; 3)
Achieve national legislation and commitments with clients; 4) Guarantee employer’s
participation in the development of this policy; 5) Sensitize and train employes to ensure the
correct application of this policy; 6) Evaluate this policy through management indicators; and
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7) Integrate occupational health and safety management system to the entire management
system. (Ernst & Young consultores, 2022)
Sustainability policy
Therefore, Ernst & Young perform the following activities: 1) Periodically review their
sustainability practices; 2) Assure the environmental policies, laws and regulations
compliance; 3) Assure the continue development of intern processes; 4) Define goals and
ensure sustainability goals compliance; 5) Give train opportunities related to sustainability
practices to all their employees; and 6) Know the expectations and keep an continue
communication with interest groups of EY. (Ernst & Young consultores, 2019)
Environmental policy
Types of programs
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components: directive style, exceptional talent, simplification, innovation,
responsibility and digital audit.
Whistleblowing: EY has an Ethics Hotline which is given to employees, clients and third
parties to complain anonymously if they identify unethical behavior which violates
professional standards.
The effectiveness of the internal quality control system: EY designed and implemented
comprehensive policies and practices for quality control. These are aligned with the
requirements set forth in the International standard on quality control 1.
Types of tactics
1. Technology
EY Digital Audit: EY has the objective to be the most trustful supplier of audit
service globally. To achieve this goal, EY has invested in technology for each area
that they have to cover, these areas are focused on automatization, connection and
analysis.
● Connection: Adopted to connect every single piece of equipment between
each other and with digital entities. EY created EY canvas, EY canvas client
portal, EY canvas mobile application suite and EY canvas dashboard.
● Automatization: EY automatized processes and procedures, so they can
focus on areas that need judgment. Creating EY smart automatization to
cover this purpose.
● Analysis: The advance of EY’s digital technology allows data analysis and
creates audit evidence, they have tools such as EY helix data analyzer library,
artificial intelligence, EY blockchain analyzer and digital global audit
methodology.
2. Quality
NextWave: To ensure the quality in every line of service that EY offers, NextWave
was created which is a global strategy to offer long term value to clients, to build trust
in every market and every economy.
To support this tactic, there are the global audit quality committee and quality
enablement leaders,
3. Talent
EY Global code of conduct: There’s a series of procedures that EY applies to
supervise that the code of conduct is being followed.
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Organizational structure adopted
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CHAPTER IV: EVALUATION & CONTROL
EY, as an auditing firm, likely implements controls to ensure accuracy and transparency in
their work and financial status.
Quality Controls: Implementing processes to ensure the quality of work and services
provided.
Human Resources Policies and Procedures: Ensuring compliance with labor laws and
effective management of human resources.
Codes of Ethics and Compliance: Establishing and enforcing ethical standards and
compliance with applicable regulations and laws.
Accomplished professional with a proven track record in implementing controls for accuracy
and transparency within Ernst & Young (EY), a premier auditing firm. Specializing in quality
controls, human resources policies, codes of ethics, and change management, I have played
a pivotal role in ensuring compliance, ethical standards, and seamless transitions. My
expertise lies in developing and executing robust processes to enhance the quality of
financial services, managing human resources effectively, establishing and enforcing ethical
standards, and steering change management initiatives. Adept at fostering collaboration
across diverse teams, I bring a strategic and detail-oriented approach to uphold the integrity
of financial processes and organizational dynamics.
Financial measures
In order to achieve valid and real results, data from the Fiscal Year 2023 was used for the
following measures.
Revenue
$ 49.400.000.000
Revenue Growth
29
14,2%
Based on this data, the financial year can be assessed as good. However, in order to be
able to classify this more precisely, data on the exact company targets would be required or
an industry comparison would have to be made.
Other interesting measures would be profit, profit margin, equity ratio or also operating
cashflow but unfortunately for these we’re lacking to find data needed to calculate.
The company Ernst & Young includes in its annual reporting also a lot of non-financial
measures that define in turn also the stakeholder value of the company. The most interesting
ones have been selected below.
PEOPLE VALUE
People applied to join EY
4,7 million
People Employed
395.442 people
Gender Diversity
48% women / 52% men
Attrition Rate
20,7%
SOCIETAL VALUES
Community Investment
30
hours invested by EY people: 914.000 hours
value of time contributions (in US$): $55m
cash investments (in US$): $109m
Energy Consumption
Total: 475.400 MWh
Non-renewable sources: 320.800 MWh
Renewable sources: 154.600 MWh
This published data shows that the company is aiming for a high steakholder value. It is very
committed to the areas of people, the environment and sustainability and is also trying to
improve in these areas.
31
Strategic information systems
Strategic Information Systems (SIS) are specialized tools designed to provide critical data
and operational insights to support strategic decision-making and competitive positioning.
For EY, these systems are integral in processing vast amounts of audit, tax, and consulting
data, transforming them into actionable intelligence.
Key Components: The essential elements of the Strategic Information System (SIS)
at Ernst & Young (EY) encompass sophisticated data analytics platforms, software
dedicated to managing client relationships, and networks for internal communication.
These integral parts synergize to refine operational workflows, elevate the quality of
services provided to clients, and support effective strategic planning.
Strategic Incentive Management involves designing and implementing reward systems that
align employee goals with the organization's strategic objectives. At EY, this means creating
incentives that encourage innovation, client satisfaction, and operational excellence.
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CONCLUSIONS
EY's vision and mission statements reflect a commitment to building a smarter, more
inclusive, and dynamic workplace while actively contributing to a better working world. The
focus on trust, quality services, and leadership development is evident in their mission.
EY's programs, such as cybersecurity, audit quality control, and sustainable audit quality,
indicate a proactive approach to managing risks, ensuring high-quality services, and
promoting sustainability.
Financial measures, such as revenue and revenue growth, suggest positive performance,
and non-financial measures highlight EY's commitment to people, societal values, and
sustainability.
The organizational structure aligns with EY's strategic goals, emphasizing the importance of
global strategies for quality and talent management. Quality controls, human resources
policies, codes of ethics, and change management are crucial components of EY's control
mechanisms, ensuring accuracy, compliance, and ethical standards.
RECOMMENDATIONS
Continuously gather feedback from clients and stakeholders to ensure that services are
meeting their evolving needs. Implement a customer-centric approach, emphasizing
responsiveness and adaptability.
Emphasize and facilitate global collaboration among teams, ensuring that the knowledge
and expertise of diverse regions contribute to the overall success of the organization.
33
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