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Integrating Personal Expertise: A History of Japanese Audit Firms, 1965-2010

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  • Karube, Masaru
  • Fukukawa, Hironori

Abstract

To examine empirically the knowledge integration process of professional expertise that individuals have in a professional firm, this paper examines the emergence and growth of four large audit firms (ShinNihon, Azusa, Tohmatsu, and ChuoAoyama) in Japan over a period from the mid- 1960s to 2010. Known as the Big Four, these firms.the product of a series of mergers between more than 70 audit firms.handled the vast majority of audit services for listed companies during this period. After the dissolution of ChuoAoyama in 2006, the remaining three audit firms have dominated the market. A longitudinal case study documents how these professional service firms were successful in providing nationwide services through mergers with domestic competitors and the provision of global services in alliance with large international firms, even though they did not sufficiently realize the systematic attainment of individual expertise. The historical account of this process suggests that the two driving forces underpinning the merger growth of the Big Four were strategic intent in (1) systematizing individual expertise and (2) establishing nationwide and global service networks in response to the increase in size and growing diversity and complexity of their client base. Finally, this paper discusses the knowledge tension between localized individual expertise and organizational knowledge in a global context.

Suggested Citation

  • Karube, Masaru & Fukukawa, Hironori, 2013. "Integrating Personal Expertise: A History of Japanese Audit Firms, 1965-2010," IIR Working Paper 13-07, Institute of Innovation Research, Hitotsubashi University.
  • Handle: RePEc:hit:iirwps:13-07
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    File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/25526/1/070iirWP13_07.pdf
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    References listed on IDEAS

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    1. Paul Almeida & Bruce Kogut, 1999. "Localization of Knowledge and the Mobility of Engineers in Regional Networks," Management Science, INFORMS, vol. 45(7), pages 905-917, July.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. A History of Japanese Audit Firms, 1965–2010
      by bbatiz in NEP-HIS blog on 2013-06-19 06:31:53
    2. Internal Migration and Trade Unions Strength: an Alternative Look on Pre-Civil War Spain
      by missiaia in NEP-HIS blog on 2013-07-16 00:04:38

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