PwC to shake up national partnerships
Date: 20-08-2008
Source: Financial Times
PwC will today announce a global reorganisation that matches the efforts under way by some of its fiercest rivals and underlines an industry shift towards the emerging markets.
The firm will, in future, be organised into three geographical regions led by the biggest firm in each - namely, the US, the UK and China. The move will draw the firm, organised as a collection of national partnerships, closer together and is designed to help PwC spread its expertise from established centres, such as the US and UK, into rapidly growing regions such as the Middle East, India & China.
Country-level legal and regulatory burdens limit the Big Four to operating as collections of often independently-minded national firms under thin um-brella organisations. PwC's reorganisation is the latest in a series of moves by the firms to get round the cross-border hurdles this throws up.
Chief among the issues has been the need to rapidly develop practices in the key emerging markets. Firms traditionally recruit and manage themselves locally, opening the networks to the risk of patchy quality in some countries with weaker accounting traditions or without a strong legal, regulatory and market structure.
PwC said its new structure would allow the strongest firms, such as the UK, to be far more directly involved in developing key markets like India, where it has acquired three local firms.
Sam DiPiazza, global head of PwC, said: "Even the best companies in the world have problems integrating systems across wide territories and we're not different. This is about preparing us for working in a globalised world with heavy regional players." About 10% of the Big Four's revenues come from Asia, compared with about 40% from European practices.
However, business in the main emerging markets is fast expanding with fee income rising at about 20 per cent a year. PwC, for example, is adding 3,000 staff this year to its 9,000 strong China practice and plans to continue expanding at that rate for the foreseeable future.
PwC's plans are more global than those of its rivals but do not go as far in changing the partnership structure. It will still maintain all its national partnerships and each firm is still due to vote on the new operating structure.
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