Deloitte & Touche

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Definition of Problem:
The problem faced by Deloitte & Touche is how to best manage the merger with Andersen in order to move beyond being two merged organizations into a unified, market-leading organization.
Deloitte must minimize the negative effects the change will have on the productivity of the organization and they must have a focus on minimizing the effects on current clients. It is important for Deloitte to create one corporate culture and focus on creating a cohesive team out of a currently divided workforce if they want the new company to be successful. Deloitte must make the Andersen employees feel welcomed and valued by the company while ensuring that their current employees don't feel swept aside.


Some causes of Deloitte's problems include:

• Employee fear of change – People naturally have a fear of change. Deloitte's people will naturally feel threatened by the influx of new, unfamiliar people to the organization, particularly as they are coming from an organization that was heralded as being the best in the industry. It is important for Deloitte to properly manage these fears.

• Difficulty of maintaining corporate culture – Any company that increases their workforce through a merger with a rival firm feels a threat to their corporate culture. It is important for firms to determine before a merger whether the corporate cultures fit together. Two firms cannot merge and adopt one culture, the resulting culture must be a blend of the two cultures.

• Inadequacies in communication – The merger was completed very quickly (in less than 2 months) and as a result the merger was communicated very quickly to employees. HR is responsible for communicating current policies to new and old employees. There has been very little upward communication until the Pulse Surveys and Deloitte employees are feeling like they are being lost in the shuffle.

• Lack of team building – The four phases of team building are forming, norming, storming, performing. All teams will go through this cycle in one way or another. Deloitte must recognize this and help the team through the forming, norming and storming phases in a way that will have the least negative impact on the company, so the team can get to the performing stage quickly. The consequences of failing to do this are that clients from Andersen will change to another firm and clients from Deloitte may feel neglected and will leave the firm for that reason.

• Fears of past business practices – Andersen was involved in the Enron scandal and as a result, individuals from the US branch were criminally indicted. The Andersen brand was destroyed and Deloitte management have a fear that the fallout may affect Deloitte since the Andersen professionals are now members of the Deloitte organization. It is important for the new Deloitte to clearly distance themselves from the Enron scandal and the fallout from that scandal.

Strategic Issues

1. Hasty Integration - Deloitte people feel, through the pulse survey, that management is in a haste to integrate and is forgetting about their own people

2. Tension - Deloitte Touche is not sure how to manage tensions that might arise between the two cultures while integrating.

3. No defined direction - There is no defined direction that the integration management is attempting to incorporate the two very different cultures.

Developed Alternatives

Gathering feedback on a more personal level - Instead of using the pulse survey to gather feedback, Deloitte could possibly do something on a more personal level. The employees need to have a clear sense of where they fall in the big picture and where they are heading. This allows them to feel they are apart of the great change and consequently will devote themselves wholeheartedly. Examples can include asking lower level managers to have brief meetings with a group of employees voicing concerns and questions. Lower level...
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