Global Professional Service Networks and their Members: Global Interactions and Cooperation or Lone Wolves for Autonomy?

SynopsisThe research problemMany diversified multinational professional service firms utilize a global professional service network (GPS network or network) to deliver assurance and other types of consulting services worldwide. This research investigates and analyzes the complex interactions between members of such GPS networks and their management in the execution of an international consulting/advisory engagement.MotivationFew studies have discussed the nature and characteristics of GPS networks, including the relationships among their members and the management of the network when providing assurance, tax, or consulting services. Also, limited studies have provided insights into the nature, complexity, and challenges associated with referral engagements for such GPS networks’ members. Even though networks serve as a coordinating platform in implementing the network’s policies, member firms who are legally independent may have incentives to deviate from these policies. Thus, evidence is needed on how such GPS networks monitor and ensure appropriate compliance and interpretation of the operating methodologies by disparate member firms, and the effectiveness of such practices to achieve the networks’ global strategies and objectives.ScopeThis study focuses specifically on consulting engagements in GPS networks. It is not intended to describe or research multinational assurance engagements, which are often referred to as group audits.Research questionsRQ1: To what extent and how do member firms in a GPS network interact to provide their services for international consulting engagement, without giving up their autonomous management of their firms and related decision-making?RQ2: To what extent and how do member firms and senior global leadership of a GPS network use power to influence member firms’ decisions in the provision of international consulting engagements?RQ3: To what extent can senior global leadership sacrifice the membership ties in a GPS network to protect and safeguard the network’s interest?Target populationStakeholders include the academic community, practitioners, company managers, regulatory authorities, Forum of Firms, audit networks, and investors at large.Adopted methodologyAn interpretive real-life case study was conducted using a triangulation of theories to analyze and assess an actual referral engagement undertaken by member firms in one of the top 10 global professional service firms (with an assurance product offering).AnalysesThe data were composed of narratives from email correspondences and semistructured interviews with local partners, managers, and the regional director of the network.FindingsThe findings illustrate the disagreement and miscommunication among members of the GPS network, a lack of trust, and excessive use of power and authority from the lead partner and the regional director of the network. One member lost a vital consulting engagement when he insisted on asserting and maintaining autonomous management of elements of an engagement referred to him by an affiliated firm. Senior global leadership of the GPS network failed to appropriately intervene between the network and disregarded the autonomous status and welfare of the member firm when it conflicted with the financial benefits of the network.