The Long-Term Development of Professional Services Firms’ Entry and Operation Modes: a Regional Approach

The Long-Term Development of Professional Services Firms’ Entry and Operation Modes: A Regional Approach

Master’s Thesis in International Management (6314M0251Y) MSc. in Business Administration – International Management Faculty of Economics and Business Universiteit van Amsterdam

Supervisor: Dr. Johan Lindeque Second Reader: Dr. Francesca Ciulli Student: Laura S. Kaufmann Student ID: 11410450 Date of Submission: 23rd June 2017 Word Count: 17.727 (excluding tables and figures)

ABSTRACT This study sets out to research the evolvement of MNEs’ entry and operation modes in different geographical regions over time through a longitudinal study. The conceptual foundation of the study is composed of a modern conceptualization of regions put forward by Ghemawat and Altman (2016) and the influence of inter- and intra-regional LOF on MNEs’ regionalization, which are approached from an MNE and a location perspective. Furthermore, asset specificity is integrated in the analysis of the data, while through the purposive sampling of the Big Four, which are all active in the professional services industry, industry specificity is assumed. Following Benito et al.’s (2009) call for qualitative research of MNEs’ operation mode configurations, this study adopts a qualitative, multiple-case study design. Data of the Big Four are collected through using several sources, which include corporate websites and documents, Bloomberg and the databases LexisNexis and Orbis. The findings suggest that, even though the study attempted to advance from the traditional regional classification of the extended triad by Rugman and Verbeke (2004), most of the PSFs’ activities are located within the extended triad regions. Regarding the PSFs’ entry modes, the most notable finding is that the PSFs expanded intra-regionally with more confidence regarding the level of risk-taking, commitment, and ownership in North America than in East Asia and Pacific. Focusing on the operation modes, the findings reveal that neither the duration of the PSFs’ activities nor their financial performance in the host regions have an influence on the development of the operation modes, thereby contradicting the claims of several IB scholars (Pedersen et al., 2002; Ellis, 2005; Petersen et al., 2006; Swodoba et al., 2011). Most notably, even though there are no theoretical indicators to assume asset specificity to be a decisive factor in the context of PSFs’ regionalization, the findings of this study show that most foreign direct investments took place in the PSFs’ consulting business area and moreover, that such foreign direct investments are very likely to be executed with higher-commitment operation modes.

Keywords: Regionalization, entry mode, operation mode, liability of foreignness, professional services firms (PSF).

STATEMENT OF ORIGINALITY

This document is written by Student Laura Kaufmann who declares to take full responsibility

for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources

other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion

of the work, not for the contents.

ACKNOWLEDGEMENTS After initially hesitating if a Master’s in Business Administration would be the right choice for me, I am very glad today that I have made that decision to come to Amsterdam a year ago. I have had an incredible journey over the past years and I am excited to finish my Master’s with this thesis. I would like to thank my supervisor Dr. Johan Lindeque for his very constructive and encouraging feedback throughout the past months. With his passion for research he challenged and motivated me to make the most out of this thesis. I would like to thank Jaap for his patience and encouragement during the sometimes-long study hours. And last, I would like to thank my parents and my whole family for the infinite support and encouragement during every step that has led me up to where I am today! Und zu guter Letzt möchte ich mich bei meinen Eltern und meiner ganzen Familie bedanken. Ohne Eure einzigartige Unterstützung und Vertrauen, wäre ich heute nicht da, wo ich jetzt bin. Ich bin froh, so eine tolle Familie zu haben und danke Euch von ganzem Herzen!

TABLE OF CONTENTS 1. Introduction ...... 1 2. Conceptual Foundation ...... 5 2.1. Regionalization ...... 5 2.1.1. Liability of Foreignness ...... 7 2.1.2. An MNE Perspective on LOF ...... 9 2.1.3. A Location Perspective on LOF ...... 11 2.1.4. Industry Specificity ...... 13 2.1.5. Asset Specificity ...... 13 2.2. Strategic Management of Intra- and Inter-Regional LOF ...... 14 2.2.1. Entry Mode ...... 15 2.2.2. Foreign Operation Mode ...... 19 3. Methodology ...... 22 3.1. Research Philosophy ...... 22 3.2. Multiple-Case Study Research Design ...... 22 3.2.1. Quality Criteria ...... 24 3.2.2. Case Selection ...... 25 3.3. Data Collection ...... 27 3.3.1. Regional Orientation ...... 28 3.4. Data Analysis and Analytical Strategy ...... 31 4. Results ...... 33 4.1. Within-Case Analysis ...... 33 4.1.1. Deloitte ...... 33 4.1.2. PricewaterhouseCoopers ...... 38 4.1.3. Ernst & Young ...... 42 4.1.4. KPMG ...... 46 4.2. Cross-case Analysis ...... 50 5. Discussion ...... 55 6. Conclusion ...... 59 References ...... 62 Appendices ...... 68 Appendix 1: Deloitte’s FDI 2012-2017 ...... 68 Appendix 2: PwC’s FDI 2012-2017 ...... 78 Appendix 3: EY’s FDI 2012-2017 ...... 85 Appendix 4: KPMG’s FDI 2012-2017 ...... 90

TABLES AND FIGURES Table 1: Regional Classification of Countries ...... 6 Figure 1: A Hierarchical Model of Choice of Entry Modes...... 17 Figure 2: Case Design ...... 23 Table 2: The Sample ...... 26 Table 3: Overview of Available and Studied Data Sources and FDI ...... 28 Table 4: Regional Percentage of Total Global Revenues Generated in 2016 ...... 29 Table 5: Regional Orientation ...... 30 Table 6: Code Book ...... 32 Table 7: Deloitte’s Regionalization ...... 36 Table 8: PwC’s Regionalization ...... 40 Table 9: EY’s Regionalization ...... 45 Table 10: KPMG’s Regionalization ...... 49 Table 11: The PSFs’ Intra-Regional Entry Modes ...... 51 Table 12: The PSFs’ Operation Mode Development per Region ...... 52 Table 13: Operation Mode Motivation ...... 52 Table 14: Operation Modes by Service Sector ...... 53 Table 15: Results of the Working Propositions ...... 57

1. INTRODUCTION

Globalization has a strong influence on the world economy and is increasingly influencing international business (IB). The process of globalization refers to the integration of markets around the world through the movement of goods, services, and capital across borders (Garrett, 2000). Unprecedented high levels of market integration have been reached (Ghemawat, 2003), however markets are not yet completely integrated across national borders. Many researchers in the field refer to the process as semi-globalization, thereby emphasizing on the persistent market imperfections, which function as impediments against complete globalization (Arregle, Miller, Hitt, & Beamish, 2013; Garrett, 2000; Ghemawat, 2003, Kim & Aguilera, 2015; Rugman & Verbeke, 2004). At the same time, politically created imperfect competition and market imperfections, such as imperfect product and factor markets and economies of scale lead to decreased costs, thereby impeding firms’ survival, which can stimulate firms to make foreign direct investments (FDI) (Welch, Benito, & Petersen, 2007). Such opportunities and constraints against semi-globalization arise increasingly at the regional level, which is why this intermediary level of analysis is gaining attention and recognition among IB scholars. As the country- and global levels of analysis are not sufficient anymore in order to investigate the current state of semi-globalization, the regional level of analysis functions complementarily (Arregle et al., 2013; Flores, Aguilera, Mahdian, & Vaaler, 2013; Verbeke & Asmussen, 2016).

When opting to internationalize, multinational enterprises (MNEs) face costs of doing business abroad (CDBA) (Sethi & Judge, 2009), which are caused by firms’ unfamiliarity with the host country (Zaheer, 1995). When firms choose to expand not only into a foreign country but moreover into a foreign geographic region, such CDBA, which IB scholars also refer to as liability of foreignness (LOF) increase as not only the firm’s home and host country are different from each other but moreover the regions differ decisively (Rugman & Verbeke, 2007). Therefore, this study aims at determining how MNEs attempt to overcome such CDBA when entering and operating in a non-home region by studying the concepts of inter- and intra- regional LOF.

Two perspectives are adopted in order to study how MNEs attempt to overcome their experienced LOF during regionalization. The first perspective focuses on firm-specific advantages (FSAs), which can be exploited and leveraged by the MNE (Rugman & Verbeke, 1992). This perspective concentrates on the MNE’s own impetus in developing competitive advantages. The added value is hence to highlight the effects of MNEs’ own efforts in overcoming LOF. The second perspective is the location perspective, which focuses on the

MNEs local contextual dimension and thereby integrates country-specific advantages (CSAs) that firms can exploit, and the institution-based view (IBV), which specifies the influence institutions have on firms (North, 1991; Peng, Sun, Pinkham, & Chen, 2009; Xu & Shenkar, 2002). Integrating the location perspective into the study provides the added value of helping to understand the importance of the MNEs’ context throughout the regionalization process. By including both perspectives in the study, a more holistic approach is taken, investigating internal as well as external forces, drivers, and impediments to an MNE’s internationalization process.

As an attempt to keep CDBA at a minimum, firms carefully select an appropriate entry mode into the foreign country. The greatest distinction can be made between non-equity and equity entry modes (Pan & Tse, 2000). Once a firm has successfully established itself in a new market, it is challenged to maintain and manage the evolving organizational arrangements used to conduct IB activities there. At this stage, the earlier conceptualization of the entry modes is no longer applicable as a firm has established its operations within the new country already (Benito, Petersen, & Welch, 2009). Hence, the conceptualization of the foreign operation mode is of interest for this study, which refers to how already established IB activities are conducted within a host country. Interestingly, recent research of operation modes shows that operation mode changes occur frequently in the form of commitment increase and reduction, and moreover, that firms often add new modes incrementally, have mode combinations, and perform changes within those combinations (Benito et al., 2009; Petersen & Welch, 2002).

The interest of IB scholars in the operation mode evolution is growing and to contribute to the IB literature, the following related research gaps are addressed by this study. First, previous studies on firms’ internationalization predominantly regard changes in the operation mode as conscious, individual decisions and thereby neglect to study possible underlying coherences, which could facilitate profound explanations of the operation mode choices (Benito et al., 2009). Furthermore, the concept of operation mode packages is strongly understudied and the importance of role changes of operation modes is thereby also neglected (Benito et al., 2009; Petersen & Welch, 2002). Another aspect is that only few of approximately 100 empirical studies, which were executed between 1994 and 2009 were able to analyze data obtained over a longer period of time due to access difficulties (Benito et al., 2009). Fourth, past studies have mainly focused on the country-level, which is insufficient in grasping today’s strong semi- globalization tendency (Kim & Aguilera, 2015). Lastly, when analyzing firms’ internationalization process, determining the CDBA is crucial. However, previous studies have neglected the interaction and reinforcement of intra- and inter-regional LOF at the regional level

(Qian, Li, & Rugman, 2013). In order to make a contribution through an attempt to close this gap in the IB literature, the following research question has been developed:

RQ: How do MNEs’ entry and operation modes vary across regions over time?

Benito et al. (2009) highlight the need for a qualitative analysis as they question the ability and validity of quantitative research to capture the context of operation mode decisions and moreover of underlying coherences. Therefore, a qualitative multiple-case study design is chosen for this study. Four cases including the big four professional services firms (PSFs) Deloitte Touche Tohmatsu Limited (Deloitte), PricewaterhouseCoopers (PwC), Ernst & Young (EY), and KPMG are investigated. Within each case, two embedded units of analysis, namely the MNEs’ entry modes and the foreign operation modes are studied. For the purpose of this study, the professional services industry is chosen as it remains understudied today, with the predominant attention on manufacturing industries in the regionalization debate (Kolk & Margineantu, 2009). Furthermore, regionalization is of significant importance within the professional services industry due to PSFs’ characteristic to “follow their clients into new geographies” (Baaij, 2014, p. 97), thereby following their clients’ internationalization journey (Kolk & Margineantu, 2009). Hence, this study aims at determining potential tendencies and patterns within the professional services industry, with regard to PSFs’ entry into foreign regions and the development of the operation mode within regions. Through the purposive sampling of PSFs, industry specificity is acknowledged and eliminated as a dynamic factor, while the focus on professional services as core intangible assets highlights the focus on such specific assets.

Data on the PSFs’ entry and operation modes and the development within the host-region- host-countries are collected using several sources such as corporate websites and documents, Bloomberg, as well as the databases Orbis and LexisNexis. The key findings of this study show that, even though the study attempts to advance from the traditional regional classification of the extended triad by Rugman and Verbeke (2004), most of the PSFs’ activities are located within the extended triad regions. Regarding PSFs’ entry modes, the most notable finding is that PSFs expanded intra-regionally with more confidence regarding their level of risk-taking, commitment, and ownership in North America than in East Asia and Pacific. Focusing on the operation modes, the findings reveal that neither the duration of the PSFs’ activities nor their financial performance in the host regions have an influence on the development of the operation modes, thereby contradicting the claims of several IB scholars (Pedersen et al., 2002; Ellis, 2005; Petersen et al., 2006; Swodoba et al., 2011). Most notably, even though there are no

theoretical indicators to assume asset specificity to be a decisive factor in the context of PSFs’ regionalization, the findings of this study show that most foreign direct investments took place in the PSFs’ consulting business area and moreover, that such foreign direct investments are very likely to be executed with higher-commitment operation modes.

This study continues by reviewing the regionalization literature with detailed attention to the concepts of LOF, firm- and country-specific advantages, the IBV, as well as industry and asset specificity. Consecutively, turning to the internationalization literature, the focus is on the role of entry and foreign operation modes in this debate. This is followed by an elaboration on the method and sample, the presentation and discussion of the findings, and last the conclusions, implications, and limitations of this study, before the study ends with suggestions for future research.

2. CONCEPTUAL FOUNDATION

In this section, the conceptual foundation for answering the research question is developed. The section begins with discussing the main notions of IB literature on regionalization and LOF. Consecutively, two perspectives on LOF are studied, namely the firm perspective focusing on FSAs, and the location-perspective, looking at CSAs. Subsequently, the extent of industry and asset specificity in the professional services industry are reviewed before the section advances to discuss the firm’s strategic management of LOF with regard to entry and foreign operation modes.

2.1. REGIONALIZATION

Regionalization is a perspective which stems from the process of semi-globalization. Its distinction from the country and global perspective is that it focuses on MNEs’ economic and spatial tendencies (Rugman & Oh, 2010). Thereby, this new intermediary level of analysis has the advantage of integrating supranational concepts in studying MNEs’ strategic practices as, for example, regional aggregation and arbitrage (Arregle et al., 2013; Ghemawat, 2003; Kim & Aguilera, 2015). The main regions identified by IB literature are North America, Europe, and Asia-Pacific, which Rugman and Verbeke (2004; 2007; 2008b) refer to as the ‘extended triad’. Rugman and Verbeke (2004) defined the most relevant regions due to the fact that most MNEs are located and most business innovations originate in them. In general, regions are characterized by a distinction from each other with regard to their economies and geographic location, and a general intra-regional pursuit of cohesion (Rugman & Verbeke, 2007). However, as the extended triad does not cover all world regions, Ghemawat and Altman (2016) further developed the extended triad into the ‘complete triad’ model for the DHL Global Connectedness Index 2016 (GCI), a report that assesses the current phase of globalization. In the report, they defined the seven world regions as (1) North America, (2) Europe, (3) East Asia and Pacific, (4) South and Central America and the Caribbean, (5) Middle East and North Africa, (6) Sub-Saharan Africa, and (7) South and Central Asia, which is compared to the extended triad in table 1 below. For the purpose of this study, the GCI definition is used as it is more comprehensive with regard to the number of included countries, as it combines the traditional concept of the triad with a modern definition of the world regions, and as it is better applicable to the way how PSFs organize themselves globally, which is further elaborated in section 3.3.1. Regional Orientation.

Extended Triad GCI Regional Classification (Rugman & Verbeke, 2004) (Ghemawat & Altman, 2016)

North America North America Canada, Mexico, United States Canada, Mexico, United States South and Central America & the Caribbean Argentina, Bahamas, Barbados, Bolivia, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Honduras, Jamaica, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and Tobago, Uruguay, Venezuela Europe Europe Austria, Belgium, Bulgaria, Croatia, Cyprus, Albania, Austria, Belarus, Belgium, Bosnia and Czech Republic, Denmark, Estonia, Finland, Herzegovina, Bulgaria, Croatia, Cyprus, Czech France, Germany, Greece, Hungary, Ireland, Republic, Denmark, Estonia, Finland, France, Italy, Latvia, Lithuania, Luxembourg, Malta, Germany, Greece, Hungary, Iceland, Ireland, Netherlands, Poland, Portugal, Romania, Italy, Latvia, Lithuania, Luxembourg, FYR Slovakia, Slovenia, Spain, Sweden, United Macedonia, Malta, Moldova, Montenegro, Kingdom Netherlands, Norway, Poland, Portugal, Romania, Russian Federation, Serbia, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Ukraine, United Kingdom Middle East & North Africa Bahrain, Egypt, Iran, Israel, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia, United Arab Emirates, Yemen Sub-Saharan Africa Angola, Benin, Botswana, Burkina Faso, Burundi, Cameroon, Republic of Congo, Cote d’Ivoire, Ethiopia, Gambia, Ghana, Guinea, Kenya, Madagascar, Mali, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, South Africa, Tanzania, Togo, Uganda, Zambia, Zimbabwe Asia-Pacific East Asia & Pacific Australia, Brunei Darussalam, Cambodia, Australia, Brunei Darussalam, Cambodia, China, Fiji, Hong Kong SAR (China), China, Fiji, Hong Kong SAR (China), Indonesia, Japan, Republic of Korea, Lao PDR, Indonesia, Japan, Republic of Korea, Lao PDR, Macau SAR (China), Malaysia, Mongolia, Macau SAR (China), Malaysia, Mongolia, Myanmar, New Zealand, Philippines, Singapore, Myanmar, New Zealand, Philippines, Singapore, Taiwan (China), Thailand, Vietnam Taiwan (China), Thailand, Vietnam South & Central Asia Armenia, Azerbaijan, Bangladesh, Georgia, India, Kazakhstan, Kyrgyz Republic, Nepal, Pakistan, Sri Lanka, Turkey, Uzbekistan Table 1: Regional Classification of Countries (Source: Rugman & Verbeke, 2004; Ghemawat & Altman, 2016)

The analysis at the regional level has gained increasing recognition among IB scholars as regionalization is perceived as a widespread, stable phenomenon (Choi & Caporaso, 2002; Rugman & Oh, 2010). However, despite increasing relevance and academic interest in regionalization, past studies have mainly focused on the country-level (Kim & Aguilera, 2015). Within the regionalization debate, Rugman and Verbeke (2004) distinguish between four types of MNEs. First, home region-oriented firms have 50 percent or more of their sales within their home region. Second, bi-regional MNEs are active in at least two regions and have between 20 and 50 percent of their sales in each of these regions. Third, host region-oriented MNEs have more than 50 percent of their sales in any region other than their home region, while global MNEs have between 20 and 50 percent of their sales equally distributed within all three regions of the extended triad. The greatest advantage of regionalization for MNEs lies in the application during the early stages of the internationalization strategy (Arregle et al., 2013; Baum, Schwens, & Kabst, 2015; Cantwell, Dunning, & Lundan, 2010; Rugman & Oh, 2010). Through incremental learning during the process, MNEs are able to maintain local responsiveness and thereby to develop and strengthen FSAs as brand awareness, know-how, management skills or technology within their home region (Arregle et al., 2013). Furthermore, MNEs can expand inter-regionally, increasingly exploiting FSAs and learning from experiences in other countries to reduce the CDBA (Rugman & Oh, 2010), which is discussed next.

2.1.1. LIABILITY OF FOREIGNNESS

When expanding beyond their national borders, MNEs are confronted with CDBA, which refer to the additional costs implied by operating in a foreign market (Sethi & Judge, 2009). During such international expansions, MNEs experience a competitive disadvantage towards local firms in the host countries, which is also known as LOF (Zaheer, 1995). While there is an ongoing discussion among IB scholars about whether LOF is the descendent of CDBA, a subset of CDBA, or whether the concepts are equivalent (Sethi & Judge, 2009), this study adopts the last perspective, regarding the concepts as equal. Zaheer (1995) initially distinguished between four sources of such disadvantages. Those are first, spatial distance, which causes travel, transportation or coordination costs, both, across different time zones and geographic distance. Furthermore, unfamiliarity with the local business environment, lack of legitimacy, and home country restrictions on operations in the host country pose as sources (Zaheer, 1995). Later, Zaheer and Mosakowski (1997) determined another source of LOF, namely the lack of embeddedness within the local information networks.

LOF can be defined at the country and at the regional level, which highlights that the location-specificity of LOF is contingent on the MNE’s FDI (Quin et al., 2013; Rugman & Verbeke, 2004). First, looking at the country level, when MNEs expand beyond their national borders within a region they experience LOF in the host country. Hence, when the MNE’s FDI takes place within a single region, the specific CDBA are referred to as intra-regional LOF, referring to the difference among the home and host countries within the home region (Rugman & Verbeke, 2007). At the regional level, MNEs experience additional CBDA when expanding beyond the home region, or between regions, which is referred to as inter-regional LOF, referring to the difference among home and host region (Kim & Aguilera, 2015; Qian et al., 2013; Rugman & Verbeke, 2007). Inter-regional expansion through FDI across multiple regions is associated with greater costs than intra-regional expansion (Rugman & Verbeke, 2007), especially due to a general intra-regional drive for political, economic, and cultural cohesion (Qian et al., 2013). Evidence of such drive is that nearly all members of the World Trade Organization (WTO) are members of a multilateral regional trade agreement, which have the overall goal to facilitate intra-regional trade (Choi & Caporaso, 2002), such as the EU and NAFTA. Such regional institutions further enhance inter-regional LOF for foreign firms through government bias, which refers to policies benefitting local businesses and negatively affecting firms from a different region (Qian et al., 2013). A concept similar to government bias is discriminatory LOF, which refers to impeding regulations against foreign businesses entering a market at the national level (Sethi & Judge, 2009). For the purpose of this study the distinction between those two concepts is not relevant and subsequently is referred to as discriminatory LOF. In contrast to discriminatory LOF, Sethi and Judge (2009, p. 407) identified incidental LOF, which refers to the “non-discriminatory costs of learning and adaptation to cope with the unfamiliarity and lack of roots in the host country environment”, which can be related to the initial sources of LOF found by Zaheer (1995) and can hence be experienced during intra- as well as inter-regional expansion.

Despite the dominant distinction between intra- and inter-regional LOF in IB literature, Qian et al. (2013) posit that scholars have neglected the interaction between the two concepts when studying a phenomenon at the regional level. Specifically, during inter-regional expansion MNEs are exposed to both types, intra-regional and inter-regional LOF. Qian et al. (2013, p. 638) further argue that the two concepts even reinforce each other as, “when a foreign firm enters one or more countries in a host region, the country-specific foreignness the firm experiences increases the difficulties that the firm faces in managing its business in the host region”. Furthermore, intra-regional LOF does not necessarily decrease with intra-regional

expansion. Economic, cultural, and regulatory differences among countries within the same region can be substantial and firms can continuously face costs due to spatial distance and the lack of a local business network, regardless of previous expansion (Kolk, Lindeque, & van den Buuse, 2014; Qian et al., 2013).

As previously elaborated, inter- and intra-regional LOF are regarded as an impediment for MNEs to expand beyond their home region (Kim & Aguilera, 2015; Qian et al., 2013; Rugman & Verbeke, 2007). Based on their study of the 500 largest MNEs, Rugman and Verbeke (2004) found that MNEs are predominantly home region-oriented (64 percent) and hence predominantly experience intra-regional LOF. Comparatively fewer firms are bi-regional (5 percent), host region-oriented (2.2 percent), or global (1.8 percent). The last three types of MNEs have in common that they experience intra- as well as inter-regional LOF, however, to different extends. While inter-regional LOF is widely regarded as a main determinant of MNEs’ home region-orientation among IB scholars (Rugman & Verbeke, 2004; 2007; 2008b), some question the strong impact of inter-regional LOF and argue that “it is too small to discourage inter-regional diversification” (Osegowitsch & Sammartino, 2008, in Qian et al., 2013, p. 636).

In order to overcome LOF, MNEs need to gain experience and thereby learn about the characteristics of the host country. This facilitates the MNE to strengthen and further develop links with local businesses and, moreover, to adapt its corporate values and practices to local requirements before expanding to another host region (Arregle et al., 2013; Rugman & Oh, 2010). This emphasizes that LOF is a dynamic concept, which decreases with the MNE’s learning process (Qian et al., 2013; Rugman & Oh, 2010; Sethi & Judge, 2009). The important question that is investigated throughout this study is how MNEs’ entry and operation mode are related to the degree of LOF experienced. Next, two important perspectives influencing the process of overcoming LOF are investigated namely the firm- and the location-perspective, which revolve around the firm’s initiative to leverage firm- and country-specific characteristics.

2.1.2. AN MNE PERSPECTIVE ON LOF This section serves to investigate FSAs, which firms can leverage and develop for their benefit. FSAs, as the name already implies, stem from the firm’s own initiative to develop competitive advantages. Such advantages can be, for example, a strong brand name, the ability of product differentiation, superior marketing and distribution skills, or access to raw materials (Rugman, Verbeke, & Nguyen, 2011). Rugman and Verbeke (1992) distinguish between location bound FSAs (LB-FSAs) and non-location bound FSAs (NLB-FSAs), where LB-FSAs refer to

advantages, which can only be exploited in a particular location and are hence not easily transferrable without considerable efforts of adaptation. On the national level, “[…] specific local customer needs and market conditions, as well as government regulation, provide incentives to firms to develop LB-FSAs” (Rugman & Verbeke, 1992, p. 765). This suggests that LB-FSAs are usually rather connected to downstream processes such as marketing and sales as they stand in strong relation to local characteristics as, for instance, customers’ preferences (Rugman & Verbeke, 1992; 2007), and facilitate the overcoming of discriminatory and incidental LOF. In service industries, the potential to develop a competitive advantage lies, according to Kolk and Margineantu (2009, p. 399), particularly in a strong “reputation of consistent quality on delivery of a specific service.”

The latter, NLB-FSAs, also referred to as transferable FSAs of the MNE, can be leveraged globally to different degrees (Rugman & Verbeke, 1992). NLB-FSAs can contribute to overcoming market imperfections, to creating economies of scale and scope, as well as to exploiting the differences among the home and host country (Rugman & Verbeke, 1992). Thereby, NLB-FSAs can be used to expand beyond regional borders, enhancing the MNE’s regionalization process (Rugman & Oh, 2010, Verbeke, 2013). In the process of overcoming incidental LOF, the ability to leverage such NLB-FSAs builds on the firm’s ability to transfer and moreover coordinate such, mostly intangible, FSAs fully or partially across the border. Through the successful leveraging of NLB-FSAs, PSFs are, in turn, able to create value, which competing local firms are assumed to not be capable of replicating, as they do not possess the same FSAs, and thereby, firms can create a monopolistic advantage in the host country (Pinkse & Kolk, 2012; Rugman et al., 2011). Another option to overcome LOF is the recombination of NLB-FSAs with home- or host-CSAs. Recombining NLB-FSAs with home-CSAs is particularly effective when entering a market in the host country that is effected by institutional failure (Pinkse & Kolk, 2012). An example from the professional services industry is when a PSF aims at entering a host country in which the International Financial Reporting Standards (IFRS) are not adopted, which were introduced in 2001 and facilitated the rapid growth of PSFs over the last decades due to the adoption in over 100 countries (Carmona & Trombetta, 2008). Through, for example, combining the PSF’s FSAs of a strong brand and its ability to lobby the home government, exploiting its home-CSA of an internationally strong government, the government can exert pressure on the host-country government to adopt the IFRS. The next paragraph elaborates on CSAs in more detail.

2.1.3. A LOCATION PERSPECTIVE ON LOF

Expanding on the previous section, this section serves to investigate CSAs, which firms can leverage and develop for their benefit. CSAs refer to economic, political, institutional, and cultural country characteristics on the basis of which countries positively differentiate themselves from others (Rugman, 2005; Rugman & Oh, 2012). In contrast to FSAs, CSAs are always location-specific and exogenous to the firm as, for example a highly skilled labor force, which is a particularly sought asset by PSFs (Kolk & Margineantu, 2009). According to Rugman and Verbeke (1992), MNEs can exploit both home and host country CSAs in order to create new NLB- and LB-FSAs and thereby a competitive advantage, which they refer to as the dual use of CSAs. However, the combination of FSAs and CSAs becomes complex once CSAs are not freely accessible to foreign firms (Hennart, 2009). This is the case when access is being controlled or protected though, for instance, local monopolies of natural resource ownership. Such situations make it necessary for foreign MNEs to develop relationships with local entities (Hennart, 2009), which can be regarded as the development of LB-FSA in order to overcome discriminatory LOF.

In order for a country to be an attractive and appropriate host country for the MNE, the host country’s CSAs have to be compatible with the MNE’s objectives for engaging in FDI in the particular country. Dunning (1998) identified four different FDI motivations, namely natural resource, market, efficiency, and strategic asset seeking. First, natural resource seeking MNEs have the primary objective to obtain favorable resource endowment, pricing or quality of the natural resource in the host country. Second, market seeking firms pursue the objective of finding a new market with a heretofore unsatisfied demand, which they can attend and expand to. Third, firms seeking efficiency focus strongly on production cost related endowments such as labor, materials, or machinery in order to enhance the efficiency of their value chain, while firms seeking strategic asset focus on the local endowment of intangible assets, which are primarily knowledge-related (Dunning, 1998). Considering the strong importance of strategic assets for PSFs and their tendency to internationalize conform with their clients’ tendencies (Kolk & Margineantu, 2009), the following working proposition can be inferred:

WP1: PSFs’ regionalization is most likely to be driven by market and strategic asset seeking.

MNEs’ potential to leverage LB- and NLB-FSAs as well as home and host CSAs in order to develop competitive advantages can be analyzed drawing on the IBV (Xu & Shenkar, 2002). Adopting the economic definition by North (1991, p. 97), “institutions have been devised by human beings to create order and reduce uncertainty in exchange. Together with the standard

constraints of economics they define the choice set and therefore determine transaction and production costs and hence the profitability and feasibility of engaging in economic activity.” Institutions are commonly known as the rules of the game, where it is distinguished between formal and informal institutions. Formal institutions include constitutions, laws, and property rights, among others, while informal institutions refer to sanctions, taboos, customs, traditions, and culture (North, 1991). The greater the institutional difference between the home and host country is, the more difficult and costly it is for MNEs to develop new FSAs or to adopt existing FSAs in the host country (Arregle et al., 2013; Qian et al., 2013; Rugman & Oh, 2010; Verbeke, 2013), as there is often a “lack of [external] complementary FSAs required to operate successfully” (Rugman & Verbeke, 2007, p. 204), which furthermore enhances the LOF experienced by the MNE (Pinkse & Kolk, 2012). On the other hand, the more familiar an MNE is with the local institutions of the host country, the lower the transaction costs and hence CDBA will be, which function as an important determinant of an MNE’s economic performance (North, 1991; Peng, 2002). This is particularly important in the professional services industry as “responsiveness to the cultural and especially regulatory environment of local markets is necessary” in order to serve clients appropriately (Kolk & Margineantu, 2009, p. 400).

To summarize, MNEs’ international competitiveness is dependent on their ability to transfer and leverage LB- and NLB-FSAs as well as on their ability to integratively use CSAs of both, the home and host country (Rugman & Verbeke, 1992; 2005; 2007; Verbeke, 2013). As stated by Verbeke (2013, p. 34) “a firm’s success abroad depends on its ability to link its internationally transferable FSAs with location advantages (whether valuable inputs or attractive market conditions) in host countries, which are the reasons why the MNE expanded there in the first place. This linking process often requires developing new, [LB-] FSAs in the host country.” Klier, Schwens, Zapkau, and Dikova (2017, p. 305) recently added to this discussion that firms hence “adapt their strategic decisions to their resource base either by exploiting existing advantages or by seeking to develop new advantages.” The leveraging of NLB-FSAs is more likely to be achieved during intra-regional than during inter-regional expansion (Qian et al., 2013; Rugman & Verbeke, 2007; Verbeke & Asmussen, 2016; Verbeke, 2013), which is in line with the general home-regionalization tendency (Rugman & Verbeke, 2004; Ghemawat & Altman, 2016). However, despite this tendency Rugman and Oh (2010) emphasize the value of inter-regionalization efforts for MNEs in order to maximize firm value and to satisfy shareholders.

The firm and location perspective on LOF experienced by MNEs during intra- and inter- regional expansion are featured by two further conditions related to the industry in which the

firm is operating and the asset specificity of the MNE’s activities concerned. Both dimensions have been shown to result in differential outcomes for the degree of LOF experienced in intra- and inter-regional expansion.

2.1.4. INDUSTRY SPECIFICITY

An important aspect to consider when investigating MNEs’ regionalization strategy is industry specificity (Kolk et al., 2014). Most generally, a distinction can be made between manufacturing and service industries (Rugman & Collison, 2004), whereof the former has received predominant attention by IB scholars (Kolk & Margineantu, 2009). Nevertheless, a recent study on service industries has found that home-region orientation is even stronger in services industries than in manufacturing industries (Rugman & Verbeke, 2008a). Furthermore, previous studies have also focused on specific sub-industries as, for instance, automotive, retail, or food and beverages (Kolk et al., 2014). Thereby, they have aimed at discovering industrial specificities within the regionalization debate, which highlights the relevance of industry specificity in regionalization research. By focusing on a single industry in this study, the industry is removed as a source of variation and it is furthermore expected that particular regionalization trends can be determined, which then can be ascribed to the professional services industry.

2.1.5. ASSET SPECIFICITY

Asset specificity is another important factor, which influences the regionalization strategy of MNEs. Asset specificity refers to the specific types of assets used and to the location of those assets in the value chain. Hence, this also refers to the position of the FSAs within the value chain, which are developed on the basis of those assets. Rugman and Oh (2012) differentiate between two types of activities to which assets belong, namely upstream and downstream. Upstream activities occur within the early stages of the value chain such as, for example, Research and Development, sourcing, procurement, and manufacturing. FSAs, which are related to upstream activities tend to be non-location bound (Rugman & Verbeke, 2007) and are therefore easier to be redeployed (Arregle et al., 2013). Downstream activities, on the other hand, take place throughout the last stages of the value chain as, for instance, sales and marketing. Those activities are characterized by a strong relation to the local customers as they are oriented towards the point of sale (Rugman & Oh, 2012). FSAs related to downstream

activities tend to be location bound (Rugman & Verbeke, 2007) and are hence more difficult to be redeployed (Arregle et al., 2013). As the professional services are directly received and realized by the clients, they are considered downstream activities as they stand in direct contact with the end consumer (Langfield-Smith, Thorne, Holton, & Hilton 2003; Li, 2005).

2.2. STRATEGIC MANAGEMENT OF INTRA- AND INTER-REGIONAL LOF

The internationalization process of MNEs has been the focus of IB research ever since the Pre- Hymer era in the 1960s. During that time research was conducted at the country-level, focusing on international economics and national competitiveness of MNEs. In the 1970s, the focus shifted to the FDI, which MNEs undertook to internationalize, which were analyzed predominantly at the firm-level. Since the 1980s, MNEs are greatly studied at the subsidiary- level as the MNE was newly defined as a differentiated network (Rugman, et al., 2011). Within the internationalization process of firms, the entry mode represents the initial stage of international expansion. However, the conceptualization of the entry mode is limited as it does not consider the further development of MNEs within the country, once they have entered (Benito et al., 2009). Therefore, the foreign operation mode is investigated subsequently. Building on the entry mode, the added value of the operation mode is that it facilitates the understanding of MNEs’ development and evolvement within a host country (Benito et al., 2009). Combining the literature review on MNEs’ entry and operation modes with the previously revised literature, seven working propositions are developed throughout the remainder of this section first, for PSFs’ entry modes and subsequently regarding their foreign operation modes.

2.2.1. ENTRY MODE

The entry mode is an MNE’s first choice for the form of operation in a new market. Choosing the right entry mode is crucial for an MNE as it determines the resource commitment, whether an MNE opts for an exploration or exploitation strategy, the level of risk and uncertainty, and the level of transfer of knowledge from the home country (Hill, 2011). Furthermore, the experienced LOF is the most severe at this point in time. Therefore, the thorough assessment of an appropriate entry mode is crucial to keep the LOF at a minimum (Sethi & Judge, 2009). In response to the nomination of Keith David Brouthers (2002), a renowned scholar in the field of entry modes, with the JIBS Decade Award, Shaver (2013) questioned the need for more research on firms’ entry modes. He expressed his opposing standpoint by claiming research to have reached “a clear conceptual understanding of how to differentiate entry modes […], of what determines firm choices amongst various modes […], and some insight into when one mode leads to better performance outcomes” (Shaver, 2013, p.23). Hennart and Slangen (2015) responded to Shaver’s assertion highlighting the need for further research on entry modes and presenting several reasons. One thereof is the need to study the evolution of foreign operations, which result from suboptimal entry mode choices.

Researching entry modes, Pan and Tse (2000) developed a framework, which follows the hierarchical decision-making process of MNEs when internationally expanding (figure 1). Even though the framework is well-recognized among IB scholars, it does not sufficiently represent the situation of firms within the service industry as it was developed based on data from manufacturing industries. Services are strongly distinct from manufactured products as they are intangible and hence cannot be consumed or stored physically. Furthermore, the production and consumption of the services are inseparable as the involvement of the client in service industries is substantial, especially in the professional service industry, (Kolk & Margineantu, 2009). Therefore, the General Agreement on Trade in Services (GATS) framework from the WTO (2013) is combined with the hierarchical model as the two frameworks are reconcilable with each other but are not aimed at a one-on-one comparison. In contrast to the sequential decision- making process outlined by the hierarchical model, the GATS framework distinguishes between four different modes of supply in service sectors, where each mode refers to a different extent of the MNE’s presence in the host country. These modes are cross-border trade, consumption abroad, commercial presence, and presence of natural persons.

Regarding the hierarchical model of choice of entry, the first choice an MNE faces when entering into a foreign country is between non-equity and equity modes. Reading figure 1 below

from left to right, the further to the right a mode is placed, the more control and ownership of activities and processes but also the more risk the mode implies. First, looking at the non-equity entry mode contractual agreements on the left-hand side, they can be associated with the fourth GATS mode, presence of natural persons, which includes services where employees from an MNE have to be physically present within the host country (WTO, 2013). Another mode of supply which can be related to non-equity entry modes is cross-border trade where services are produced in the MNE’s home country and then supplied to the customer in the host country via telecommunications or postal networks (WTO, 2013). As cross-border trades are usually project-based as, for instance, consultancy or market research reports (WTO, 2013), they can be regarded as market transactions and are therefore associated with exporting entry modes. The second GATS mode consumption abroad refers to foreign clients physically crossing the border to enter the MNE’s home country in order to consume the service locally such as, for example, students consuming educational services from a university in a host country (WTO, 2013). Those services are usually of a temporary nature and can therefore also be associated with non-equity contractual agreements. The third GATS mode commercial presence refers to the provision of a service “by a locally-established affiliate, subsidiary, or office of a foreign- owned and [foreign]-controlled company,” as, for instance, hotel chains or insurance companies (WTO, 2013, p. 3). Such activities are typically not involved with equity investments and can hence be associated with non-equity entry modes, licensing and alliances. In general, the benefits of non-equity entry modes are that they require little interaction with the foreign market or suppliers, that the incurred costs and risk are relatively low, and that they provide the opportunity to exploit economies of scale (Hill, 2011; Pan & Tse, 2000; Zahra, Ireland, & Hitt, 2000). Those benefits are however of less value to PSFs as PSFs do not have the objective to reach economies of scale but to deliver high quality customized services to their clients for which close cooperation with stakeholders is necessary (Baaij, 2014). On the other hand, disadvantages of non-equity entry modes are that firms have low control over the process, knowledge, and activities involved (Hill, 2011; Pan & Tse, 2000).

When opting for an equity entry mode placed on the right-hand side of figure 1, MNEs’ strategic commitment to their future operations in the host country is higher and requires significant resources (Hill, 2011). MNEs then face another question, which regards the degree of independence and ownership, whether the MNE wants to establish a joint venture (JV) with a local firm and thereby share ownership or whether it wants to enter the host country alone, establishing a wholly owned subsidiary (WOS) via a greenfield investment (Pan & Tse, 2000). In comparison with non-equity entry modes, general benefits of equity entry modes are stronger

control over upstream and downstream activities as well as the stronger potential to implement and exploit FSAs (Hill, 2011), which is particularly relevant for PSFs in order to develop a strong local reputation and thereby a competitive advantage (Kolk & Margineantu, 2009).

Figure 1: A Hierarchical Model of Choice of Entry Modes (Pan & Tse, 2000)

Looking at JVs in particular, it is the least independent equity entry mode as the venture partners share costs and risks, which is why costs and risks are lower than for WOS. Another benefit of JVs is that an MNE can benefit from the local partner’s knowledge of the host market and thereby leverage such LB-FSAs. Drawbacks, on the other hand, are that MNEs risk to lose control over the JV if it is not executed appropriately. Furthermore, JVs face the risk of cultural clashes among home and host country employees and practices (Hill, 2011). Based on the analysis of the IB literature on LOF and entry modes, thinking first of the general literature and then about the industry specific implications, the following working propositions can be inferred:

WP2a: The simultaneous intra- and inter-regional LOF experienced by PSFs during the first entry in a host region is likely to be associated with a less independent equity entry mode.

WP2b: PSFs’ first entry in a host region is likely to take place through a JV with a local partner to leverage local market knowledge and thereby to facilitate the development of LB-FSAs.

Next, looking at acquisitions, they provide a similar benefit as JVs, namely that firms can benefit from the target’s local host market knowledge. Further benefits of acquisitions are that they can be executed quickly and thereby, firms can establish a physical presence instantly, gaining not only the target’s tangible assets, but also their intangible FSAs such as the local brand recognition and managers’ knowledge of the local market. On the other hand, drawbacks of acquisitions are that firms can overestimate a target’s value or the potential value that can be created through the acquisition and therefore pay too much and, as well as for JVs, that the cultures between the two firms can clash (Hill, 2011). Last, greenfield investments require the greatest commitment of resources as MNEs have to independently build the local venture from the bottom up and solely carry all costs and risks. However, benefits are complete control over the venture and the immediate establishment of the PSF’s brand as well as the implementation of the corporate culture (Hill, 2011). The previously mentioned fourth GATS mode, presence of natural persons, can also be associated with equity entry modes, in addition to non-equity contractual agreements. It is the only mode of supply which has the potential to go beyond the temporary, project-based timeframe through including equity investments, and can hence be associated with JVs and WOS. Mergers and acquisitions (M&As), which can be associated with acquisitions on the very right of the hierarchical model, account for the major entry mode within the service industry (Iammarino & McCann, 2013). In contrast to JVs, when merging, the firms form a new venture which operates as a new, independent legal entity and therefore requires strong, long-term commitment (Berk, DeMarzo, & Hardford, 2012). M&As are found to be chosen by strategic asset seeking firms to acquire complementary LB-FSAs, given that a firm is already familiar with the host region (Klier et al., 2017). This becomes especially relevant for PSFs when expanding within a host region, entering into further host-region-host-countries during which they presumably experience decreasing inter-regional LOF as they are already familiar with the host region. Therefore, again thinking first of the general literature and consecutively about the industry specific implications, the following WPs can be inferred,

WP3a: Entering new host countries within the host region, the intra-host-regional expansion is likely to be associated with higher-commitment equity entry modes.

WP3b: PSFs intra-host-regional expansion is likely to take place via the equity entry modes mergers and acquisitions to acquire complementary LB-FSAs.

2.2.2. FOREIGN OPERATION MODE

Building on the entry mode, the concept of foreign operation mode includes the evolvement of firms’ “organizational arrangements to conduct international business activities” (Benito et al., 2009 p. 1458). Whereas the terms ‘entry mode’ and ‘operation mode’ were earlier used interchangeably (Benito & Welch, 1994), today the concept extends the traditional study of market entry by focusing on the changes made by firms operating in a foreign market and by highlighting the importance of the context in which such changes take place. This implies that, while the operation mode development is determined through comparing the current operation mode with the initial entry mode into a host country, the same concepts can be used for the analysis, such as alliance or equity JV, among others. This approach emphasizes that organizations’ operation modes are not static but, on the contrary, evolve together with the relationships which firms engage in (Cantwell et al., 2010). Especially through the interaction with local actors within the foreign markets, firms are able to learn and thereby to adapt their perception of risks and benefits of being involved in the foreign markets (Swodoba, Olejnik, & Morschett, 2011). Hence, growing familiarity with local institutions not only reduces LOF (North, 1991; Peng, 2002), but moreover also leads to an increase in firms’ willingness to increase their local commitment (Pedersen, Petersen, & Benito, 2002).

WP4: The longer a PSF operates in a host country within a host region, the more likely the PSF is to transition to a higher commitment equity operation mode.

With an increasing interest of IB scholars in this topic area, different studies have brought forward mixed results. While some scholars found that the initial entry mode may persist (Rosson & Ford, 1982, in Swodoba et al., 2011), others found that mode combinations are build (Petersen & Welch, 2002), or that the initial entry mode is replaced by another operation mode (Pedersen et al., 2002). Regarding the last, two trends that have been identified are operation mode increases and reductions. Operation mode increases refer to the switching to an operation mode with a higher level of control, ownership, or risk, while operation mode reductions refer to the contrary (Swodoba et al., 2011). Several scholars have identified firms’ economic performance as a decisive factor, leading to an increase or reduction accordingly in the operation mode (Ellis, 2005; Petersen, Pedersen, & Benito, 2006; Swodoba et al., 2011).

WP5: The better a PSF’s economic performance in a host-region-host-country is, the more likely it is to increase the operation mode to a higher commitment equity operation mode.

The conceptualization of the operation mode allows for several modes to be adopted in different combinations within one country, which is termed operation mode package and that has been strongly neglected by IB scholars until now (Benito et al., 2009; Petersen & Welch, 2002). An advantage from applying a mode package instead of choosing one over another or discarding modes, can be an increase in market penetration as firms become more flexible (Benito et al., 2009). Peterson and Welch (2002) identified four different forms of mode packages, namely the unrelated, the segmented, the complementary, and the competing operation mode package. When a firm uses several operation modes within one country but they stand in no relation to each other the firm is applying an unrelated mode package. This can be the case when the firm is, for example, active in different industries or markets within the host country. Second, the segmented package refers to the application of several operation modes within the same industry. Here, the operation modes stand in relation to each other as they are focused on the same activity within the value chain, however they can target different segments from the customer portfolio or different geographic areas within the host country. Third, the complementary mode package refers to modes that are aimed at different activities of the firm’s value chain with the coherent aim to pursue the firm’s objective. An important aspect is that additional coordination among the different modes is needed. Last, the competing mode package refers to the implementation of different operation modes, which are aimed at the same segment while the level of ownership differs among them. Thereby, the firm can, to some extent, increase control on the operation mode with a lower level of ownership as the operation mode with a higher level of ownership serves as a reference point, which is especially pertinent in manufacturing industries (Petersen & Welch, 2002).

An important aspect of mode packages is that different modes can play distinct roles which are either primary or supportive (Petersen & Welch, 2002). Examples of primary roles can be market penetration or revenue generation, which relate back to Dunning’s (2000) market and strategic asset seeking FDI motives. Supporting roles facilitate the pursuit of the primary roles through, for example, transferring technology or developing a positive political profile, which can be related to the development of new LB-FSAs (Rugman & Verbeke, 1992). Furthermore, also contextual developments exogenous to the firm such as changes in market characteristics, institutions, or relationships with third parties influence the operation mode role. Such events can cause that an operation mode becomes less important or even inappropriate at a later moment in time (Benito et al., 2009; Pedersen et al., 2002). In the case that the role of a mode changes, this can be regarded as an indicator of an increase or decrease in international commitment by the MNE (Benito et al., 2009).

WP6: PSFs are likely to apply segmented mode packages, which comprise primary and supportive operation modes during their intra-regional expansion.

Following the conceptualization of LOF and entry, and operation modes in the context of PSFs’ regionalization, the applied methods of this study is discussed, which lead to the validation of the working propositions as well as to answering the posed research question.

3. METHODOLOGY

This section serves to elaborate on the methodology applied in this study. First, the ontological and epistemological philosophies are discussed before advancing to the applied research design, which includes the multiple-case study design, quality criteria, and the case selection. This section concludes with an overview of the data collection and data analysis.

3.1. RESEARCH PHILOSOPHY In general, the research philosophy of a study defines the researcher’s perspective of the world (Saunders, Lewis, & Thornhill, 2009). More specifically, the ontological and epistemological perspective guide what is considered “as a valid, legitimate contribution to theory” (Brannick & Coghlan, 2007, p. 62) and hence influence how the determined gap in the literature is being investigated. Regarding the ontology, it can be distinguished between subjective and objective ontology where, according to the subjective perspective, reality is a construct of the researcher’s mind (Brannick & Coghlan, 2007), which implies that the study can be influenced by personal attributes such as values, norms and beliefs. In contrast, in the objective perspective, which is adopted in this study, the researcher functions as an independent individual, studying the reality without influencing or changing it (Brannick & Coghlan, 2007). Epistemology focuses on who has the ability to know what information (Ryan, 2006). The post-positivist epistemological perspective considers reality as a reflection of science, but also as probabilistic, which implies that verification is not possible (Rynes & Gephart, 2004). The post-positivist perspective is appropriate for this study, as it facilitates the analysis of data in a historic and cultural context and in an objective manner, thereby allowing for the development of a holistic picture (Ryan, 2006). To conclude, for this study, an objective post-positivist stance is adopted.

3.2. MULTIPLE-CASE STUDY RESEARCH DESIGN Following Benito et al.’s (2009) call for qualitative research of MNEs’ operation mode configurations as “the configuration of [operation] modes along the value chain can be […] complicated” (Benito et al., 2009, p. 1461), this study adopts a qualitative, multiple-case study design. A qualitative multiple-case study is the appropriate approach as it allows for the holistic, in-depth analysis of complex phenomena in real life (Yin, 2009). Further benefits of the multiple-case study are first, that the explanatory nature allows for the investigation of operational links over time, which facilitates the longitudinal approach of this study and also a

better understanding of the complexities of the researched phenomenon (Bryman, 2012). Second, analytical generalizations can be made, which means that the specific results from the investigated cases can be generalized to the theory from the conceptual foundation of this study (Eisenhardt, 1989). As this study seeks to answer a research question through the evaluation of several working propositions, which have been developed based on a conceptual foundation, the adopted approach is explanatory (Yin, 2009), also referred to as bottom-up deduction (Shepherd & Sutcliffe, 2011).

Figure 2: Case Design (Source: Author)

Notes: EM = Entry Mode, OM = Operation Mode

As it has been opted for a multiple-case study research design, several cases are studied, as displayed in figure 2 above. Four cases with two embedded units of analysis have been chosen within the same industry, which are the largest PSFs Deloitte, PwC, EY, and KPMG, also commonly known as the Big Four (Baaij, 2011). The four PSFs operate within the same service industry and were originally known as the big accountancy firms. All four PSFs operate with a network structure, which means that firms of the network are privately owned and managed independently under the common PSFs’ brand name (Kolk & Margineantu, 2009). Over the last decades, all PSFs have expanded their services from auditing to also providing consulting, tax and legal services (Baaij, 2011). Building on the conceptual foundation, the case selection is following a literal replication logic, which implies that analyzing the working propositions in every case, the same results are anticipated for each of them (Yin, 2009). As the PSFs are operating in the same industry, they are expected to face similar challenges when expanding intra- and inter-regionally, such as LOF, and moreover, they are expected to react similarly in dealing with those challenges. The embedded units of analysis within each case are the entry and operation modes respectively (see figure 2). First, during the within-case analysis each PSF’s entry into and expansion within a foreign region is studied individually and analyzed to

look for patterns. This is then followed by a cross-case analysis where the findings of all cases are compared and generalizations are made, based on the underlying conceptual foundation.

3.2.1. QUALITY CRITERIA Besides the before-mentioned benefits of a qualitative multiple-case study, such studies are prone to criticism such as the lack of generalizability and objectivity (Eisenhardt, 1989; Yin, 2009), as well as a lack of rigor, (Yin, 2009), which the following four quality criteria address. First, construct validity refers to the selection of appropriate and sufficient methods to investigate the focal phenomenon, which is especially challenging for the qualitative case study design (Yin, 2009). Therefore, in order to increase construct validity, a structured approach was applied, using carefully determined search terms when searching corporate sources and databases. Furthermore, by applying two different perspectives, namely the firm and location perspective, theoretical triangulation is facilitated, which increases the robustness of the data analysis (Denzin, 1978) and thereby the construct validity. To further strengthen the construct validity, data triangulation is applied, using different sources to collect data (Denzin, 1978), which has the advantage that multiple measures of the same phenomenon can be studied (Yin, 2009). For this study, this implies that different sources provide supporting and complementary information on the regional orientation, entry and operation modes of the PSFs as, for example, the database Orbis provides detailed information on JVs and M&As while the database LexisNexis also includes information on alliances and greenfield investments.

Second, internal validity is a major concern for this study as it is of an explanatory nature and “[seeks] to establish a causal relationship, whereby certain conditions are believed to lead to other conditions, as distinguished from spurious relationships” (Yin, 2009, p. 40). To enhance internal validity, the developed working propositions, which support determining patterns and thereby causal relationships, are based on the conceptual foundation and the relationships are explained in detail (see chapter 2). Furthermore, the pattern-matching logic is applied, which enhances internal validity through the investigation of patterns across all cases and the comparison of such to the initially developed working propositions, which is facilitated through the previously discussed literal replication logic (Yin, 2009).

Next, external validity attends to the extent to which the findings are generalizable beyond the cases studied (Yin, 2009). As this study is adopting a multiple-case study research design, external validity is enhanced through the anticipation of the literal replication logic across the different cases, thereby aiming to achieve generalization of the results to the broader theory

included in the conceptual foundation, which is also known as analytical generalization (Yin, 2009).

The last quality criteria, reliability, refers to the extent to which a study can be repeated and lead to the same results. Therefore, a clear chain of evidence is established, which means that each step taken is clearly outlined to facilitate reconstruction and to allow for replication of this study (Yin, 2009). Furthermore, all findings are stored in a case study database and are available upon request.

3.2.2. CASE SELECTION Applying purposeful sampling, four cases have been selected. For the purpose of this study, purposeful sampling provides the advantage that PSFs can be selected based on the determined criterium that they are part of the Big Four. This guarantees that sufficient data is available and can hence be collected (Patton, 1990), as the Big Four have been internationalizing for a long time, following their clients in their expansion journeys (Baaij, 2014; Kolk & Margineantu, 2009). In addition, increasing pressure from the public on PSFs to increase their transparency in the disclosure of information (Baaij, 2014) assures the availability of sufficient data.

Inter-regionalization efforts present a strong value for MNEs in order to maximize firm value and to satisfy shareholders (Rugman & Oh, 2010). Especially for PSFs the value of inter- regionalization is represented in meeting the demands of their clients, which are becoming increasingly international and spread around the world (Baaij, 2014; Kolk & Margineantu, 2009). After two decades of mergers within the professional services industry (Suddaby & Greenwood, 2001) and the closure of another leading PSF, Arthur Anderson, due to its involvement in the corporate Enron scandal in 2002 (Baaij, 2014), the four PSFs Deloitte, PwC, EY, and KPMG have emerged as the market leaders, controlling nearly 90 percent of the global audit market and 20 percent of the global consulting market (Suddaby & Greenwood, 2001).

Home Home Active Active Case Company HQ Description Country Region Countries Regions Deloitte was founded in 1845 in London. After several international mergers, of which the latest was between Deloitte Haskins & Sells and Touche Ross in 1989, the single global brand ‘Deloitte’ was introduced in 2003. Deloitte United New York, 1 Europe 155 7 provides the following services (Deloitte, n.d.): Kingdom United States • Audit and assurance, • Financial advisory, • Consulting, • Legal, and • Risk advisory, • Tax

The first founders of PwC, Samuel Lowell Price and William Cooper, founded their firms in 1849 and 1854, respectively. After several mergers, the world firm Price Waterhouse was formed in 1982 (PwC Press room, n.d.). PwC provides the following services (PwC Global, n.d.).: United London, 2 Europe 157 7 • Advisory, • Legal, Kingdom United Kingdom • Audit and assurance, • People and organization, • Entrepreneurial and private • Sustainability and climate change, clients, and • Family business, • Tax • IFRS reporting,

Ernst and Young was founded in 1989 after the merger of Ernst & Whinney and Arthur Young & Co. EY offers (EY, n.d.): United London, 3 Europe 155 7 • Advisory, • Tax and law, Kingdom United Kingdom • Assurance, • Transactions, and • Strategic growth markets, • Specialty services

KPMG was founded in 1987 after the merger of Peat Marwick International and Klynveld Main Goerdeler. KPMG provides the following services The Amstelveen, 4 Europe 152 7 (KPMG, n.d.): Netherlands The Netherlands • Audit and assurance, • Enterprise, and • Advisory, • Tax

Table 2: The Sample (Source: Author)

Table 2 above provides more detailed information about the Big Four, which also includes the various services offered by the PSFs. As the PSFs use different terminologies to describe similar services, the following four general terms are determined and will be used in the analysis: audit (including assurance and IFRS reporting), consulting (including financial and risk advisory, and other niche advisory such as entrepreneurial and private clients, family business, people and organization, sustainability and climate change, strategic growth markets, transactions, specialty services, and enterprises), legal, and tax. Next, the section will proceed with an elaboration on how data is gathered and analyzed.

3.3. DATA COLLECTION Data on the PSFs’ entry and operation modes are collected using several sources, thereby facilitating data triangulation. All sources are searched for information regarding host-region- host-country entry and operation modes in regions other than Europe, as Europe is the home region for all of the cases. Considering the limited timeframe of this study, in order to facilitate an in-depth analysis of a feasible size of regions, the focus is on a selection of the two regions in which the PSFs are most active. The number of offices within each region is deemed as the appropriate determinant for making this choice. Furthermore, in order to get an understanding of the PSFs’ regional orientation, the calculation from Rugman and Verbeke (2004) is replicated with the adjustment that the PSFs’ regional revenues are used instead of the sales spread, as the revenue spread is more applicable to the professional services industry.

Based on the findings of the most active regions, corporate sources and the Bloomberg database are specifically searched for information regarding the entry modes in the selected host-region-host-countries. Next, applying temporal bracketing, complementary data on the operation modes are searched for the time period 2012 to 2017. For the purpose of this study, temporal bracketing provides the advantage of focusing on a concrete time period as it is dealt with a large volume of data (Gearing, 2004). Furthermore, collecting data for a five-year period allows not only for the analysis of long-term developments but moreover facilitates the comparison of the initial entry modes with the latest developments.

The used databases are LexisNexis and Orbis, as LexisNexis is one of the most reputable research databases, providing a comprehensive collection of specialized trade publications, newspapers, magazines, and company press releases (Zahra et al., 2000) and therefore assures the collection of valid and comprehensive data for the chosen time period. The database is searched using the PSFs’ names with at least five mentions, the host regions as, for example,

“United States of America OR USA OR America”, the host-region-host-countries, and the various types of entry and operation modes, and the terms ‘opens office’ and ‘new office’ as keywords. The database Orbis provides comprehensive corporate information on public and private companies’ JVs, mergers, and acquisitions in nearly all European countries (de Jong & van Houte, 2014), and hence is also an appropriate source for information about the Big Four as they were all founded in a European country. Table 3 provides an overview of the number of articles, documents and electronic sources that are found regarding the inter- and intra- regional expansions for each PSF via corporate sources, Bloomberg, LexisNexis, and Orbis, as well as how many of them are studied.

Total Corporate LexisNexis Orbis Bloomberg Sources and Total FDI Sources Documents Documents PSF Sources Documents Studied EM* OM* OM EM studied Studied studied studied/total studied/total EM OM EM OM Deloitte 6 2 143/8507 45/50 8 188 11 76 PwC 4 1 220/6955 18/51 5 238 6 48 EY 4 1 69/4786 14/24 5 83 6 34 KPMG 5 0 21/7054 24/65 5 246 7 62 Table 3: Overview of Available and Studied Data Sources and FDI (Source: Author) Notes: * EM = Entry Mode, ** OM = Operation Mode

3.3.1. REGIONAL ORIENTATION Focusing on the PSFs’ regional orientation, it becomes apparent that Rugman and Verbeke’s (2004) extended triad conceptualization is very stylized, while Ghemawat and Altman (2016) present a much richer conceptualization with their complete triad model. Moreover, the complete triad is in line with the common units of accounting in the professional services industry, as the annual reports show that the Big Four report on their annual global performance in terms of the Americas, EMEA, and Asia Pacific (see table 5), which is an indicator of how the PSFs organize themselves with regard to regions. Therefore, for the purpose of this study, the regional conceptualization of the complete triad is applied in combination with empirical evidence of the PSFs’ regional activity. As provided in the PSFs’ annual reports, the number of offices per region are therefore compared for each PSF and the two regions with the most offices and hence most regional activity are chosen (see table 4). For all four PSFs, the regions with the most activity are North America and East Asia and Pacific.

Deloitte PwC EY KPMG Regions Number of Number of Number of Number of Offices Offices Offices Offices North America 181 177 120 159 South & Central America & 65 72 50 59 the Caribbean Total the Americas 246 249 170 218 Europe 296 384 328 319 Middle East & North Africa 37 26 26 26 Sub-Saharan Africa 43 54 37 38 Total EMEA 376 464 391 383 East Asia & Pacific 128 176 138 108 South & Central Asia 33 37 20 43 Total Asia-Pacific 161 213 158 151 Total 783 926 719 752 Table 4: Regional Percentage of Total Global Revenues Generated in 2016 (Source: Author)

Year 2010 2011 2012 2013 2014 2015 2016

Deloitte Rev. $26,6 billion $28,8 billion $31,3 billion $32,4 billion $34,3 billion $35,2 billion $36,8 billion

Region EMEA The As* AP** EMEA The As AP EMEA The As AP EMEA The As AP EMEA The As AP EMEA The As AP EMEA The As AP % of Global 38% 49% 13% 36% 50% 14% 35% 49% 15% 34% 51% 15% 35% 51% 14% 34% 52% 14% 33% 53% 14% Revenue Regional Bi-regional Host region Bi-regional Host region Host region Host region Host region Orientation PwC Rev. $26,57 billion $29,24 billion $31,52 billion $32,09 billion $33,95 billion $35,36 billion $35,9 billion

Region EMEA The As AP EMEA The As AP EMEA The As AP EMEA The As AP EMEA The As AP EMEA The As AP EMEA The As AP % of Global 47% 37% 16% 46% 37% 17% 44% 39% 17% 43% 40% 17% 44% 40% 16% 42% 42% 16% 40% 44% 16% Revenue Regional Bi-regional Bi-regional Bi-regional Bi-regional Bi-regional Bi-regional Bi-regional Orientation EY Rev. $21,25 billion $22,88 billion $24,42 billion $25,82 billion $27,37 billion $28,66 billion $29,63 billion

EMEIA Region The As AP EMEIA The As AP EMEIA The As AP EMEIA The As AP EMEIA The As AP EMEIA The As AP EMEIA The As AP *** % of Global 45% 39% 15% 44% 39% 17% 43% 40% 17% 42% 42% 16% 42% 43% 15% 41% 44% 15% 40% 46% 14% Revenue Regional Bi-regional Bi-regional Bi-regional Bi-regional Bi-regional Bi-regional Bi-regional Orientation KPMG Rev. $20,63 billion $22,71 billion $23,03 billion $23,42 billion $24,82 billion $24,44 billion $25,42 billion

Region EMEA The As AP EMEA The As AP EMEA The As AP EMEA The As AP EMEA The As AP EMEA The As AP EMEA The As AP % of Global 52% 31% 17% 51% 31% 18% 50% 32% 18% 50% 33% 17% 50% 34% 16% 46% 38% 16% 44% 40% 16% Revenue Regional Home region Home region Home region Home region Home region Bi-regional Bi-regional Orientation Table 5: Regional Orientation (Source: Author) Notes: *The As = The Americas, **AP = Asian-Pacific, ***EMEIA = Europe, Middle East, India, Asia

3.4. DATA ANALYSIS AND ANALYTICAL STRATEGY After all data is collected and centralized in a database, the information is coded manually, which provides the advantage that the complexity of the qualitative data is not compromised and that the researcher gains a rich understanding of the data (Saldaña, 2016). In a first step, codes are identified ‘a priori,’ based on the conceptual foundation, which facilitates the capturing of the most relevant data (Ryan & Bernard, 2003). Codes enable the linking of data to the conceptual foundation and of the results across the cases (Miles, Huberman, & Saldaña, 2013). In a second step, through open coding, the codes are adapted and, if necessary, new codes are added during the analysis of the data (Ryan & Bernard, 2003). Table 6 provides an overview of the final codes as well as the related working propositions.

Code Sub-code Description WP FDI that are aimed at serving a new market and Market seeking thereby increasing the current client base 1, 6 (Dunning, 1998). FDI that are aimed at acquiring new intangible Strategic asset FSAs, which will add value to the firm. Strategic 1, 2b, 3b, 6 seeking assets are primarily knowledge-related (Dunning, FDI 1998) and often referred to as capabilities. motivation FDI that are aimed at increasing the efficiency of Efficiency the firm’s operations within the value chain 1 seeking (Dunning, 1998). FDI that are aimed at obtaining favorable resource Natural resource endowment, pricing or quality of the natural 1 seeking resource in the host country Alliance The entry mode refers to the PSFs first entry into a 2a, 3a, JV host-region-host-country, which can take place 2a, 2b, 3a WOS through an alliance, JV, or WOS such as greenfield 2a, 3a Greenfield investment, merger, or acquisition. Here, it is Entry mode 2a, 3a investment distinguished between the first entry into the host region, which is addressed by the WPs 2a and 2b, Merger 2a, 3a, 3b and following entry modes into other host-region- Acquisition host-countries, which the WPs 3a and 3b address. 2a, 3a, 3b Operation mode increases are characterized by the Operation mode change of the first initial entry mode to an FDI with 4, 5, 6 increase a higher level of risk, ownership, or commitment. Operation mode decreases are characterized by the Operation mode change of the first initial entry mode to an FDI with 4, 5, 6 Operation decrease a lower level of risk, ownership, or commitment. mode The role of the operation mode refers to the PSF’s motivation of engaging in the FDI. Such Operation mode motivation can be primary, relating to the core 4, 5, 6 role change business of the PSF, or supportive, relating to supporting activities. Over time, the motivation to

Code Sub-code Description WP engage in FDI can change, which implies that prior supporting activities become primary activities and vice versa. Increase in An increase in revenue indicates a better economic 5 Economic revenue performance. performance Increase in An increase in profit indicates a better economic 5 profit performance. Table 6: Code Book (Source: Author)

In order to analyze the collected data, the pattern matching technique is applied. Here, patterns based on the conceptual foundation, which are formulated as working propositions, are compared to empirical patterns, which are derived from the data collection of the four cases (Yin, 2009). Therefore, in the next section, first, through a within-case analysis, the two embedded units of analysis, entry and operation modes, are analyzed for each case individually. Second, the similarities or differences that are found in the within-case analyses are compared with each other through a cross-case analysis.

4. RESULTS In this chapter, the findings of the data analysis are presented. In a first step, the PSFs’ entry modes and the foreign operation modes within the chosen regions are analyzed independently from another in the within-case analysis. Following, through a cross-case analysis, the four cases are compared, thereby identifying patterns regarding the entry and operation modes.

4.1. WITHIN-CASE ANALYSIS The following section reports the findings regarding the four PSFs’ entry modes into the chosen host-region-host-countries, as well as the FDI found during the focal period from 2012 to 2017, which represent the operation modes as they are expansions within the host regions. For each case, an analytical table, which summarizes the results, is provided within the text, while comprehensive lists presenting all FDI identified and studied are provided in the appendix.

4.1.1. DELOITTE Deloitte, which was founded in the United Kingdom in 1845 by William Welch Deloitte, is a special case among the Big Four as it is the only PSF, which has its headquarters not in its home region Europe, but in the United States (US). The reason for the location choice of the headquarters is assumed to be Deloitte’s strong revenue generation of 50 percent of the global revenue by the offices in the Americas, which are listed in table 5.

Based on the amount of offices in the various regions, it is determined that Deloitte is most active in the two regions North America and East Asia and Pacific. Looking first at North America, Deloitte expanded to the US in 1880 through a greenfield investment opening its first office in New York. The FDI was motivated by the request of Mr. Deloitte’s accountancy expertise by the Great Western Railway, a British company, which also had business operations in the US. During the focal period, 38 FDI were identified in North America of which 25 took place in the US. Hereof, the majority of 16 FDI were acquisitions, while nine FDI were alliances. Comparing the operation modes with the initial greenfield entry mode in 1880, it becomes apparent that the alliances symbolize a strong operation mode decrease to a very low level of risk-taking, commitment, and ownership, which is caused not least by the temporal restriction of such engagements (WTO, 2013). The 16 acquisitions, also represent operation mode decreases however, to a lesser extent as Deloitte still committed substantial equity to those FDI (Hill, 2011).

In the 1950s, Deloitte entered Canada through a merger of Touche Ross and Deloitte Haskins & Sells Samson Belair. During the focal period, 14 FDI were identified in Canada, of which one FDI was a JV, which took place in 2016. “[A]s the legal market continue[d] to undergo unprecedented change, Deloitte [investigated] in new models through affiliated law firms to address the evolving legal requirements of clients” (Marketwired, 2016). Even though the JV represents an operation mode decrease, against expectations, the JV was the most appropriate operation mode in this case, as it reduced the risks for both partners engaging in a new model and, simultaneously allowed Deloitte to benefit from the partner’s expertise in legal services (Hill, 2011). Regarding the other operation modes, as well as in the US, the majority of the 14 FDI were acquisitions, which represents, as expected, an operation mode increase. This is due to the fact that acquisitions require a higher level of risk, commitment, and ownership for Deloitte acting as the single liable entity compared to the initial merger entry mode. The remaining four FDI represent operation mode decreases, which comprise three alliances and the before-mentioned JV.

Analyzing Deloitte’s development in North America in general, the fact that Deloitte predominantly expanded through acquisitions since 2012 and hence, the predominant operation mode during the focal period were acquisitions, reflects Deloitte’s overall growth strategy. Through the acquisitions, Deloitte not only widened its scope of service offering but moreover, the acquisitions facilitated the takeover of tangible assets such as offices, and thereby enabled Deloitte to increase its physical presence within the host-region (Hill, 2011; WTO, 2013). Furthermore, the aspect that acquisitions were not the sole operation mode as Deloitte also engaged in alliances and a JV exemplifies that organizations’ operation modes evolve together with the relationships, which firms engage in and therefore constantly change over time (Cantwell et al., 2010). However, against expectations, even though Deloitte’s financial situation improved throughout the focal period as shown in table 5, Deloitte predominantly engaged in operation mode decreases, as summarized in table 7. In general, this implies that the studied FDI during the focal period required a lower level of risk, ownership, and commitment than the initial entry mode with which Deloitte expanded to the US and Canada.

First Regional and Operation Mode Change Country Entries 01/01/12 - 30/04/17 Region Country Supporting Quotes Number Initial Operation Operation Mode Year of FDI Entry Mode Mode Development Motives “Deloitte and NetSuite plan leverage their respective strengths to drive innovation across multiple industries and business sectors. The two firms Alliance 9 SAS* Decrease have previously worked together on a number of implementations, with very positive results and are recognized as leaders in their field.” US Greenfield 1880 14 SAS “Combining Deloitte's current leadership consulting research and experience with Kaisen's market leading assessment methodology, IP, and tools, the new Acquisition Decrease 2 SAS & practice will target the global leadership services market, estimated to be MS** worth over $40bn a year.” “With our clients facing changing market demands in supply chain […] our Alliance 3 SAS Decrease integrated Kinaxis solution, with in-memory processing, provides critical North capabilities for our clients.” America “As the legal market continues to undergo unprecedented change, Deloitte is investing in new models through affiliated law firms to address the evolving legal requirements of clients. […] Deloitte Conduit Law LLP will offer a JV 1 SAS Decrease Canada Merger 1950s unique and more flexible approach to legal services that enhances the capability to provide high quality solutions that reflect the changing realities of the market." 6 SAS “[Mr. Lynch] pointed out that Monitor has a heritage of developing strategies to make companies more competitive, while Deloitte has a proven track Acquisition Increase 4 SAS & record of implementing and executing plans. This will essentially give us a MS new platform for growth.” “[T]he agreement will harness the capability and flexibility of Receipt Bank Assumed Alliance 5 SAS to enhance the Deloitte Private Connect platform as part of the firm's consistent standard service.” Assumed After Australia “Since MashUp joined Deloitte in August last year, we have experienced Alliance 1979 Assumed strong demand for the team’s expertise in designing physical environments Acquisition 20 SAS increase in a way that is sympathetic to today’s digital world and creates seamless customer experiences. Kid Neon provides a logical extension of our brand

First Regional and Operation Mode Change Country Entries 01/01/12 - 30/04/17 Region Country Supporting Quotes Number Initial Operation Operation Mode Year of FDI Entry Mode Mode Development Motives and spatial design capabilities, but they will also enable us to use augmented reality and virtual reality across our whole consulting practice.” “Home to some 75,000 private businesses, Western Sydney is a vitally 1 MS important and exciting market for Deloitte Private.” “Deloitte opens more offices around China to seek greater share of lucrative China Greenfield 1917 Greenfield 1 MS Consistent market.” “Working with Deloitte for its first university in Asia Pacific, the agency helped with the creative direction and branding initiatives as well as the Alliance 2 SAS Consistent East launch. The event is also seen as part of Deloittes new global branding Asia and movement, refreshing the branch since 2003.” Pacific “Developed in partnership with the Singapore Economic Development Board, GovLab works closely with senior government executives and Singapore Alliance 1979 JV 1 SAS Increase thought leaders in Southeast Asia and globally to develop a unique understanding of the increasingly complex and dynamic world.” "Combined with Deloitte's existing digital forensic and financial crime analytics capability, I-Analysis substantially extends our ability to help Acquisition 1 SAS Increase clients prevent and meet heightened regulatory requirements related to fighting financial crime and Money Laundering." "We are already seeing an increasing demand for assistance from Maori New n.f.*** n.f. Acquisition 5 SAS n.a.**** organi[z]ation whose needs for professional services advice can be varied Zealand and complex so it made sense to bolster our resources in that area." “IFS, the global enterprise applications company, has signed an agreement South with Deloitte Consulting, making the [PSF] its strategic partner for the n.f. n.f. Alliance 1 SAS n.a. Korea deployment of IFS Applications(TM) in the oil & gas, construction, EPC and project-based manufacturing industries in South Korea.” Table 7: Deloitte’s Regionalization (Sources: company annual accounts, newspaper articles, Orbis database; see methodology section for explanation) Notes: *SAS = Strategic asset seeking, **MS= Market seeking, ***n.f. = not found, ****n.a. = not applicable (Given the large number of sources for the presented findings, detailed references are not provided. Full referencing is available from the author upon request.)

Studying Deloitte’s development in the second focal region, East Asia and Pacific, 39 FDI were found for Australia, China, Singapore, New Zealand, and South Korea. Beginning with Australia, it is assumed that Deloitte entered the host-region-host-country with an alliance, as the cooperation with the in 1891 founded Yarwood Vane & Co. began prior to the official merger in 1979. Comparing the 26 identified FDI with the initial alliance entry mode, five alliances were found, which signify a consistent operation mode during the focal period, maintaining the same level of risk, ownership, and commitment. In addition, Deloitte engaged in 21 acquisitions, which symbolize an operation mode increase. Next, in China, Deloitte entered the country through a greenfield investment in 1917 as the first foreign accounting organization. One greenfield FDI was identified during the focal period, which represents a consistent operation mode due to the consistent level of risk, ownership, and commitment. In 1979, Deloitte entered Singapore with an alliance, operating through Goh Tan & Co. The identified operation modes during the focal period include two alliances, which symbolize consistent operation modes, and one JV and one acquisition, which are operation mode increases to higher levels of risk, commitment, and ownership in comparison to the initial alliance in 1979. Last, for New Zealand one acquisition was identified and for South Korea one alliance was found. However, as it was not possible to obtain information regarding Deloitte’s initial entry modes into those host-region-host-countries no inference can be made as to whether Deloitte experienced an operation mode change. Another interesting finding is that Deloitte only recently entered Mongolia via an alliance in 2012, and Laos, Cambodia, and Myanmar via greenfield investments in 2013. Unfortunately, no further operation modes were found during the focal period and hence it is not possible to study the development of Deloitte within those countries.

Another interesting finding is that 65 out of the 73 operation modes in North America and East Asia and Pacific were strategic asset seeking, which confirms expectations. This illustrates Deloitte’s predominant interest in LB-FSAs, such as the targets’ or alliance partners’ expertise, thereby responding to local market demands, which, in turn, highlights Deloitte’s pursuit to create a monopolistic advantage in the host market (Pinkse & Kolk, 2012; Rugman et al., 2011). The fact that five FDI were both, strategic asset and market seeking acquisitions, allowed Deloitte to leverage the strong relationships the acquired parties had developed with their customers, as well as the expertise from the acquired firm’s employees through the integration of the firm in the Deloitte network. Furthermore, the remaining two operation modes were solely market seeking, which is conveyed through the explicitly defined motivation of the growth opportunity and market potential that is facilitated by the respective FDI.

Interestingly, the data furthermore unraveled that, with regard to the specific business areas of Deloitte, consulting, audit, tax, and legal, 76 percent of the identified FDI were executed in the consulting services sector, while only 17 percent were related to audit services, and 1 percent pertained to each, the tax and the legal service sectors, as noted in appendix 1. Focusing on the ‘consulting FDI’, 71 percent were executed with equity operation modes, and more specifically, 69 percent were executed via acquisition operation modes. Furthermore, the majority of 34 percent of the ‘consulting FDI’ represent operation mode decreases, while 30 percent are associated with increases and nine percent of the operation modes remained consistent.

4.1.2. PRICEWATERHOUSECOOPERS The two firms that merged in 1982 to become what is today known as PwC, were Price and Cooper, which were founded in 1849 and 1854 in London. In 2016, as well as Deloitte, PwC was most active in the regions North America and East Asia and Pacific, with having 38 percent of its offices located in those regions. The first inter-regional expansion of PwC into North America took place in 1890 to the US, where Price Waterhouse set up their office in New York via a greenfield investment. Looking at the focal period, PwC engaged in 12 alliances, two JVs, and six acquisitions, which all represent operation mode decreases, as they require considerably lower levels of risk-taking, commitment, and ownership than the initial greenfield investment entry mode. Of those operation modes, the majority of 12 alliances represent the strongest operation mode decrease, as alliances are non-equity modes, which require comparatively little costs and risk-taking (Hill, 2011; Pan & Tse, 2000). The advantage of alliances for PwC was the potential to leverage partners’ strategic assets such as industry knowledge and expertise, with the overall goal to eventually internalize such knowledge and thereby to develop LB-FSAs (Rugman & Verbeke, 1992). An interesting example is PwC’s alliance with Skyhigh Networks in 2015, which built on an earlier alliance with Tanium. During both agreements PwC sought to further develop its offerings in the field of cyber security together with the alliance partner.

First Regional and Operation Mode Change Country Entries 01/01/12 - 30/04/17 Region Country Supporting Quotes Number of Initial Entry Operation Operation Mode Year FDI Mode Mode Development Motives 10 SAS* “This initiative recogni[z]es the rapid growth in new business models based around access to assets, rather than ownership of assets and includes things like 1 SAS & ride-sharing or accommodation sharing. NAB research shows that this segment MS** of the economy is currently growing at around 140% annually.” Alliance Decrease “PwC [in China, the US and Australia] have formed a new alliance which will expand the range of professional consulting services in China. This is aimed at 1 ES*** serving the growing needs of multinational companies and state-owned enterprises operating in the country. […] The alliance will bring together professionals and expertise from the three PwC companies." "In this case we already have a strong consulting presence in a market that is rapidly growing and evolving. The question is how can the [PwC global] US Greenfield 1890 JV 2 SAS Decrease network work with the China firm to develop that market for domestic Chinese and global clients." North “The core skill set of the RGI team strongly complements PwC's existing America services in healthcare IT, program management and communications Acquisition 6 SAS Decrease consulting. Their client-centric approach mirrors our own, and we know they will bring tremendous additional value to our clients.” "[… O]ur new Experience Center approach allows PwC to leverage its unique 1 SAS & ES set of skills to help clients move faster, create more compelling experiences, Greenfield Consistent and position themselves to win in today's digital-first world." "We've expanded our national practice exponentially and expect Florida to be 1 MS our fastest growing market for private company services to date." “This new relationship will allow [us] to expand our service offerings to meet Alliance 2 SAS Decrease our client's growing complex issues." Canada Greenfield 1907 “[Platinum Legal Group] expertise compliments our experience in data Acquisition 10 SAS Decrease acquisition and analysis allowing us to expand our evidence management and e-discovery offering." “PWC and Chinese real estate developer ABP have signed a deal to provide 1 SAS Alliance Consistent services to help companies from China set up in the UK.” EAP China Alliance 1906 1 ES See US efficiency seeking alliance above. JV 1 SAS Increase See US strategic asset seeking JV above.

First Regional and Operation Mode Change Country Entries 01/01/12 - 30/04/17 Region Country Supporting Quotes Number of Initial Entry Operation Operation Mode Year FDI Mode Mode Development Motives “[T]he office in Shenzhen is PwC's first innovation center in the world. This Greenfield 1 MS Increase reflects China's supportive policies for entrepreneurship and innovation, and the market potential that approach brings.” 4 SAS “PwC Sydney Managing Partner Joseph Carrozzi said the Greater Western 1 SAS & Sydney region was a key growth area and PwC was responding to changing Alliance Consistent MS market demands and staff needs.” 1 ES See US efficiency seeking alliance above.

JV 1 SAS Increase See US strategic asset seeking JV above.

Australia Alliance 1933 “With the Appian acquisition, we will be able to meet demand in the market Acquisition 3 SAS Increase for ensuring these large scale projects meet their business case through project management and smarter processes from plenary to construction.” East “With this new specialist advisory service we offer […] an end-to-end service which can integrate financial and commercial advisory, accounting and audit Asia Greenfield 1 SAS Increase and and tax and legal advice led by partners with deep sector expertise, a passion Pacific for agriculture and strong connections to rural Australia.” “This is a positive and significant step in further developing our financial New n.f.**** n.f. Acquisition 1 SAS n.a.***** product valuation service, and cementing PwC’s commitment to be the number Zealand one provider of Treasury Risk Management advice in New Zealand.” “PwC Singapore and High-Tech Bridge reported a strategic business partnership in the APAC region to provide PwC's clients with the most JV 1 SAS n.a. comprehensive cybersecurity, compliance and risk management digital services.” “Consulting firm PricewaterhouseCoopers has opened an investment fund Singapore n.f. n.f. 2 MS n.a. [center] in Singapore to provide distribution services to asset managers expanding internationally and within Asia." Greenfield “The organic evolution of our business is in response to the growing market demand we are seeing in Asia for integrated business solutions across multiple 1 SAS territories. This is the driver behind this move to enhance our capabilities in the region.” Table 8: PwC’s Regionalization (Sources: company annual accounts, newspaper articles, Orbis database; see methodology section for explanation) Notes: *SAS = Strategic asset seeking, **MS = Market seeking, ***ES = Efficiency seeking, ***n.f. = not found, ****n.a. = not applicable

This interrelation of operation modes highlights that organizations’ operation mode choices evolve together with the relationships they engage in (Cantwell et al., 2010). Furthermore, PwC engaged in two greenfield investments in 2015, which represent consistent operation modes and thereby signal strong commitment, as the level of risk, commitment, and ownership are the highest for greenfield investments.

In 1907, PwC intra-regionally expanded to Canada, also via a greenfield investment, establishing an office in Montreal. During the focal period PwC engaged in 12 FDI in total, of which two were alliances and ten were acquisitions. Again, the operation mode development regarding the alliances represents a strong decrease while the development regarding the acquisitions is a decrease to a lower extent considering that the level of commitment, and ownership was still substantial during those acquisitions (Hill, 2011). Summarizing the development in North America, the operation modes predominantly decreased, while only two operation modes remained consistent. This does not confirm expectations, as PwC’s growing familiarity with the host market (Pedersen et al., 2002) and its constantly improving financial performance (Ellis, 2005; Petersen et al., 2006; Swodoba et al., 2011) were expected to lead to an increase in commitment and ownership.

Looking at the findings in the region East Asia and Pacific, Price Waterhouse & Co. first entered China in 1906 via an alliance with the local Lowe, Bingham & Thomson. During the focal period, PwC engaged in four FDI in China, which included two alliances, one JV, and one greenfield investment. The two alliances clearly represent a consistent operation mode while the JV illustrates a slight operation mode increase, as the level of risk, commitment, and ownership were shared equally among the partners. Last, the greenfield investment depicts a strong operation mode increase, as it is not only an equity operation mode but moreover because PwC solely carried all costs and risks (Hill, 2011). In 1933, PwC expanded intra-regionally to Australia via an alliance with Cooper Bros, as part of which PwC consultants were sent to Australia, which aligns with the commercial presence GATS mode (WTO, 2013). During the studied period, PwC engaged in 11 FDI in Australia, which include four alliances representing consistent operation modes, one JV, which signals a slight operation mode increase, three acquisitions as part of a stronger increase, and one greenfield investment standing for the strongest operation mode increase. Interestingly, one alliance in 2013 and the JV in 2012 involved inter-regional cooperation of PwC in the US, China and Australia and two alliances in 2016 involved PwC in Australia and the US. Those FDI signal global corporate efforts to provide improved services and to internally leverage PwC’s NLB-FSAs. Furthermore, PwC also engaged in one acquisition in New Zealand and in one JV and three greenfield investments

41 in Singapore. As expected, all those FDI were equity operation modes and, with the three greenfield investments in Singapore, even include two higher-commitment operation modes. However, as no information regarding the initial entry modes into those host countries was obtained, it is not possible to make any inferences regarding the operation mode development.

Comparing the operation mode development of the two regions, in contrast to the observations in North America, mainly operation mode increases and few consistent operation modes were found for PwC in East Asia and Pacific. This confirms expectations that PwC increases local commitment over time. Looking at PwC’s general motivation for engaging in the identified FDI, 41 of the 48 FDI were solely strategic asset seeking, and four FDI were market seeking, which aligns with the expectations that PSFs’ regionalization is mostly driven by those motives.

Lastly, examining PwC’s FDI with regard to the four areas of business consulting, audit, tax and legal, the results unveiled that the majority of 83 percent were executed in the consulting service sector, as listed in appendix 2. Of the ‘consulting FDI’, 63 percent were identified as equity operation modes while, more specifically, 43 percent were acquisitions. Regarding the development of the operation modes accounting for the consulting services, the majority of 52 percent were operation mode decreases, while both operation mode increases and consistent operation modes account for 15 percent. Lastly, regarding the other three business areas, 21 percent of PwC’s FDI were executed in the audit service sector, while 17 percent pertained to the tax divisions and six percent to the legal divisions.

4.1.3. ERNST & YOUNG With its headquarters in Europe, the determined focal regions for EY are North America and East Asia and Pacific, where 36 percent of EY’s office are located. The oldest component of EY, the accountancy Whinney Smith & Whinney, was founded in 1894 in Britain and expanded to the US in 1924 through an alliance with Ernst, which was followed by a merger of the two companies in 1978, when also the headquarters was placed in England. During the focal period, 19 FDI were identified in the US, which include seven alliances, ten acquisitions, and two greenfield investments. Regarding the alliances, the level of risk, commitment, and ownership was held consistent, while the acquisitions and greenfield investments represent strong increases in the operation mode to higher levels. EY engaged consistently in acquisitions throughout the focal period, while the two greenfield investments took place in 2013 and 2017. In contrast to the high number of alliances and acquisitions, the isolated occurrence of

42 greenfield investments highlights the increased risks implied by such a strong operation mode increase.

Between 1903 and 1924, EY, which was at that point in time still Ernst, expanded intra- regionally to Canada through a greenfield investment. During the focal period, 11 FDI were identified, which include two alliances, eight acquisitions and only one greenfield investment. While the alliances and acquisitions represent decreases in the level of risk, commitment, and ownership, the greenfield investment, which took place in 2014, signifies a consistent level of commitment. However, EY only engaged in one greenfield investment, which highlights again that such high risk, commitment, and ownership is taken with caution. Interestingly, EY is the only PSF for which an FDI was found during the focal period in Mexico. However, as the initial entry mode into Mexico was not obtained, it is not possible to analyze the operation mode development in that host-region-host-country.

Within the region East Asia and Pacific, in total only eight FDI were identified, which is the lowest count of the four cases. The FDI include six acquisitions in Australia however, EY’s initial entry mode was not determined, which means that the operation mode development cannot be analyzed. One of the remaining two identified FDI was an acquisition in Japan, which took place in 2012, while EY initially entered Japan in 2004 through a merger with the local accountancy Shin Nihon & Co. Hence, the operation mode development is a slight increase, as EY became the single liable party through the acquisition of the target. The last FDI regards the acquisition of Five Point Partners in the Philippines in 2014. EY initially entered the Philippines via an alliance with a local accounting firm, which means that the operation mode development is a considerable increase to a higher-commitment equity operation mode.

Comparing the operation mode developments of the two regions with each other, operation mode increases dominate the count in both regions, with 12 in North America and two in East Asia and Pacific. However, while the development within both regions confirm the expectations of mode increases, those assumptions have to be made with caution as the initial entry modes into three countries in the region East Asia and Pacific were not found and hence the operation mode development was not fully analyzable.

First Regional and Operation Mode Change Country Entries 01/01/12 - 30/04/17 Region Country Supporting Quotes Number Initial Operation Operation Mode Year of FDI Entry Mode Mode Development Motives “EY and Pegasystems will now offer full end-to-end, global technology solutions, from upfront consulting through deployment Alliance 7 SAS* Consistent and ongoing services. These solutions provide clients with the ability to meet today's challenges for digital enterprises.” “Five Point’s renowned customer information systems (CIS) capabilities can help EY expand its own CIS services and together Acquisition 10 SAS Increase work with clients to replace their legacy customer relationship management and billing systems and transform their customer’s US Alliance 1924 experience.” “According to the Technology Association of Georgia, software and 1 MS** IT is the largest sector of the state's workforce and economy, with telecommunications and high-tech equipment close behind.” “We were very impressed with the level of talent in Louisville and Greenfield Increase commend efforts by the city, state and local learning institutions to North 1 ES*** grow the talent base even more aggressively and in new areas. […] America That, along with Louisville's affordability and quality of life, were important factors in our location decision.” “The alliance with OpenText will enable EY to address key customer Alliance 2 SAS Decrease issues around managing content, while simultaneously understanding patterns of behavior and expected outcomes.” 7 SAS “Given the breadth and depth of Hergott Duval Stack relationships across Saskatchewan's private mid-market space, […] this deal Acquisition 1 SAS & Decrease 1903- boosts Ernst & Young's Western Canada operations and Canada Greenfield MS 1924 Entrepreneurial Services practice.” “EY's Centre will leverage the rich talent pool right here in Atlantic Canada to build its dedicated team, which will serve clients across 1 MS & Greenfield Consistent Canada and around the world. […] EY's investment to grow this ES capability in Atlantic Canada, along with our recent acquisition of Ambir Solutions, the leading independent IT and business consulting

First Regional and Operation Mode Change Country Entries 01/01/12 - 30/04/17 Region Country Supporting Quotes Number Initial Operation Operation Mode Year of FDI Entry Mode Mode Development Motives firm in Atlantic Canada, will support our efforts to respond to the significant demand for analytics.” “LogiStar's renowned supply chain execution capabilities can help Mexico n.f.**** n.f. Acquisition 1 SAS n.a.***** EY expand its own services and offer clients additional warehouse management and distribution network optimization offerings.” “This acquisition will further strengthen EY’s ability to service our clients across all areas of sustainability and climate change, Australia n.f. n.f. Acquisition 6 SAS n.a. particularly social, supply chain, energy and sustainability advisory East services.” Asia and “The acquisition will enable Ernst & Young to enrich its financial Pacific Japan Merger 2004 Acquisition 1 SAS Increase transformation-related services, including system integration support.” The Philippines Alliance n.f. Acquisition 1 SAS Increase See US strategic asset seeking acquisition above. Table 9: EY’s Regionalization (Sources: company annual accounts, newspaper articles, Orbis database; see methodology section for explanation) Notes: *SAS = Strategic asset seeking, **MS = Market seeking, ***ES = Efficiency seeking, ***n.f. = not found, ****n.a. = not applicable

Looking at EY’s motives to engage in FDI in the two host regions, the clear majority of 30 of the 34 operation modes were purely strategic asset seeking, which implies EY’s aspiration to continuously acquire LB-FSAS in the form of supplementary capabilities to expand the breadth and depth of its current service offerings. (Rugman & Verbeke, 1992; 2007). One operation mode in Canada was both, strategic asset and market seeking, while the remaining three FDI were either market, efficiency, or market and efficiency seeking, and took the form of greenfield investments. This indicates that when engaging in an FDI in order to improve current processes or to increase the current client base, EY is likely to execute a greenfield investment, which facilitates the highest level of control (Hill, 2011).

Regarding the specific business areas consulting, audit, tax, and legal, interestingly 33 out of the 34 identified FDI of EY were executed in the consulting field, which account for 97 percent, as can be seen in appendix 3. Of those ‘consulting FDI’, 76 percent were identified as equity operation modes, while 67 percent were acquisitions. With regard to the operation mode developments, the data showed that most ‘consulting FDI’ represented operation mode increases as they accounted for 38 percent, while 24 percent pertained to decreases and 22 percent of the ‘consulting FDI’ remained consistent. Interestingly, only three FDI were identified for EY’s other lines of business, namely one for the audit and two for the tax business sector.

4.1.4. KPMG As well as the preceding cases, KPMG has most of its offices, namely 36 percent, located in the regions North America and East Asia and Pacific. William Barclay Peat, the ‘P’ from KPMG, was founded 1870 in London and merged with Marwick, Mitchell & Co., the ‘M’, in 1911, thereby entering the US. Of the 34 identified FDI in North America, 26 were located in the US, which include eight alliances, three partial acquisitions, and 15 full acquisitions. Interestingly, KPMG is the only case for which partial acquisitions were identified during the focal period, which refer to FDI during which less than 50 percent of the targets’ assets were obtained. Based on the empirical data, it can be assumed that the specific objective was to gain rights over a software or practice of the target that had the potential of enhancing KPMG’s service offering and improving clients’ experience. One example is the investment in Norse, which “enable[d] KPMG’s member firms to offer Norse threat intelligence products and services to clients through the KPMG networks global cyber security practice” (Business Wire, 2015). The partial acquisitions, as well as the alliances, represent an operation mode decrease,

46 even though to a lesser degree. This is due to the fact that the partial acquisitions are in contrast to alliances not temporarily limited and involve equity commitment of KPMG. Regarding the 15 identified acquisitions, they represent a small increase from the merger entry mode due to KPMG acting as the only liable party when acquiring a target, and thereby solely carrying the risk and ownership. Another eight operation modes were identified in Canada however, the initial entry mode was not obtained, thus leaving the operation mode development in the host- region-host-country impossible to analyze.

In the second focal region, East Asia and Pacific, 28 operation modes were identified. After a project, which KPMG executed for the Hongkong and Shanghai Bank in 1941 in London, KPMG expanded inter-regionally to China in 1945 through a greenfield investment. During the focal period, two greenfield investments were identified, which represent a consistent operation mode with the highest level of risk-taking, commitment, and ownership of the FDI (Hill, 2011). In 1949, KPMG further expanded intra-regionally to Australia through the acquisition of Smith’s local accounting practice. Of the 21 identified operation modes during the focal period in Australia, four alliances and one partial acquisition are associated with a decrease in the operation mode. However, in comparison with the alliances, the partial acquisition is only a minor decrease as it still involved the purchase of some of the target’s equity. In addition, two acquisitions and one greenfield operation mode were identified in New Zealand, as well as one alliance in Singapore and in Mongolia. However, as the initial entry modes into those host- region-host-countries were not determined, the operation mode development cannot be fully analyzed.

Comparing the operation mode developments of the two regions, the results are very diverse. On the one hand, in North America, KPMG predominantly executed 22 operation mode increases, which aligns with the expectations of KPMG increasing its local commitment over time (Pedersen et al., 2002). However, also 12 operation decreases were identified within the region. On the other hand, in East Asia and Pacific, KPMG maintained the operation mode consistent in the case of 17 FDI, while also five operation mode decreases and one increase were identified. Furthermore, regarding KPMG’s motivation to engage in the operation modes within the host countries, the clear majority of 57 FDI were strategic asset seeking, while the remaining five were either solely market or both, strategic asset and market seeking, which aligns with the expectations. This highlights KPMG’s strong pursuit to gain supplementary capabilities and thereby solidify its market position within the host-region-host-countries (Rugman & Verbeke, 1992).

First Regional and Operation Mode Change Country Entries 01/01/12 - 30/04/17 Region Country Supporting Quotes Number Initial Operation Operation Mode Year of FDI Entry Mode Mode Development Motives “The alliance combines KPMG's globally recognized supply chain and procurement transformation experience with Taulia's leading Alliance 8 SAS* Decrease suite of technology products to streamline the flow of financial information between buyers and suppliers.” “The investment will enable KPMG's member firms to offer Norse US Merger 1911 Partial 3 SAS Decrease threat intelligence products and services to clients through the Acquisition KPMG network's global cyber security practice.” The acquisition of Zanett furthers our mission to be the market North Acquisition 15 SAS Increase leader in serving as a strategic advisor for clients looking to drive America sustainable value across their enterprise.” “KPMG and Vertex said they will seek to help clients manage tax risk and exposure to audit adjustments, potential indirect tax fraud Assumed Alliance 1 SAS and revenue loss, and increase the effectiveness and quality of decrease Assumed business systems that underpin the transactions that give rise to tax Canada n.f.*** Merger obligations.” “The healthcare and public sectors are undergoing significant Assumed Acquisition 7 SAS transformation, and Plato's capabilities ensure we will deliver increase leading edge solutions for our clients in Atlantic Canada.” “The approval for the opening of three offices by KPMG Huazhen has enabled us to take the lead in reaping the benefits of the program, China Greenfield 1945 Greenfield 2 MS** Consistent said Stephen Yiu, Chairman of KPMG China. […] According to East John B Veihmeyer, Global Chairman of KPMG International, China Asia and is one of the company's most vital markets in emerging economies.” Pacific “KPMGs use of IBM Watson technology will accelerate the ability to analy[z]e and act on core financial and operational data central to the health of organi[z]ations and the capital markets, enabling Australia Acquisition 1949 Alliance 4 SAS Decrease greater collaboration between humans and systems and providing the ability to communicate in natural language and analy[z]e massive amounts of data to deliver insights more quickly.”

First Regional and Operation Mode Change Country Entries 01/01/12 - 30/04/17 Region Country Supporting Quotes Number Initial Operation Operation Mode Year of FDI Entry Mode Mode Development Motives “This expansion is driven by a social purpose, and very deliberately Partial conceived to bring together Indigenous expertise with KPMG 1 SAS Decrease Acquisition specialists to provide tangible outcomes focused on economic development.” 14 SAS “Today’s acquisition of TRACE adds strong relationships and capability in the Nepean region. We’re delighted to welcome a Acquisition 1 SAS & Consistent highly motivated and predominantly female team, with a strong MS cultural fit, and complimentary business service capabilities.” “We've identified the most successful features of different East Greenfield 1 MS Increase innovation labs and [centers] across the KPMG global network to Asia and develop a unique capability [in Sydney].” Pacific “We are very complementary in many areas, people, culture, clients, Acquisition 2 SAS n.a.**** and our strategy for the future.” “[…] KPMG [is] seeking to further expand its footprint in the area New n.f. n.f. with further partners and staff. […] A move into regional Canterbury Zealand Greenfield 1 MS n.a. reflects KPMG's recognition of the contribution the area and agriculture plays in fueling New Zealand's prosperity and complements our existing regional footprints.” "Together with KPMG`s experience in successfully transforming business models, we are pursuing innovative applications of Singapore n.f. n.f. Alliance 1 SAS n.a. blockchain technology that will help our customers worldwide achieve their strategic goals.” “NIMM brings an extraordinary depth of local knowledge, Mongolia n.f. n.f. Alliance 1 SAS n.a. combined with KPMG’s strength across audit, tax and advisory, that’s a critical advantage in this rapidly changing market.” Table 10: KPMG’s Regionalization (Sources: company annual accounts, newspaper articles, Orbis database; see methodology section for explanation) Notes: *SAS = Strategic asset seeking, **MS = Market seeking, ***n.f. = not found, ****n.a. = not applicable

Lastly, the data show that the majority of 82 percent of KPMG’s FDI were executed in the consulting line of business, while 11 FDI, which account for 18 percent, were identified for the audit sector as well as for the tax sector of KPMG, as noted in appendix 4. Focusing hence on the consulting sector, 75 percent of the FDI were executed with equity operation modes and, more specifically, 71 percent with acquisitions. Regarding the operation mode development of the ‘consulting FDI’, most operation modes, namely 45 percent represent operation mode decreases, while 35 percent were identified as operation mode increases, and 29 percent remained consistent during the focal period.

4.2. CROSS-CASE ANALYSIS This section serves to determine any patterns regarding similarities and differences of the PSFs’ entry modes, as well as regarding the motivation and development of the operation modes. Four dimensions will be analyzed consecutively, which are first, the entry modes during the PSFs’ initial inter-regional expansion, second, the entry modes during the succeeding intra-regional expansion, third, the development of the operation modes in the host-region-host-countries, and lastly, the PSFs’ motivation for engaging in the identified FDI during the focal period.

Beginning with the entry modes of the PSFs’ initial inter-regional expansion, against expectations, none of the identified entries into neither North America nor East Asia and Pacific were executed via an equity JV, which provides the advantage to share costs and risks among partners and moreover, to leverage the local partner’s knowledge (Hill, 2011). On the contrary, Deloitte and PwC first entered the US in North America via greenfield investments, which involve the highest level of risk and require the most commitment and ownership (Hill, 2011), while EY chose a non-equity alliance, and KPMG entered via a merger. Also in East Asia and Pacific, none of the PSFs’ first inter-regional entry mode was a JV, but instead Deloitte and PwC opted for alliances. Furthermore, KPMG entered China with a greenfield investment, while for EY, the initial entry into the region was not determined. However, inferences have to be made with caution regarding the fact that the PSFs first expanded inter-regionally as early as 1880.

Looking at the second dimension, the PSFs’ entry modes expanding intra-regionally, in North America only Deloitte opted for a merger, which aligns with the expectations, while PwC and EY chose greenfield investments. In East Asia and Pacific, only EY and KPMG’s entry mode choices comply with the expectation that PSFs would opt for an acquisition or merger, while most intra-regional entry modes were alliances and greenfield investments, as table 11

shows. In this regard, the most interesting case is Deloitte, which entered two countries through an alliance and four countries through greenfield investments, which are the most distinct entry modes applied by any of the four PSFs, with regard to the level of risk, commitment, and ownership. In general, the findings indicate that the PSFs expanded intra-regionally with more confidence regarding the level of risk-taking, commitment, and ownership in North America than in East Asia and Pacific, where they executed a substantial count of alliances. However, it is important to emphasize on the fact that also the first intra-regional entry modes date back as much as 110 years, which is why implications have to be made with caution as the institutional environments in the host-region-host-countries have evolved since the time of entry.

North America East Asia and Pacific PSF Acqui- Green- Acqui- Green- Alliance JV Merger Alliance JV Merger sition field sition field

- - 1 - - 2 - - - 4

- - - - 1 1 - - - -

- - - - 1 1 - 1 - -

------1 1

Table 11: The PSFs’ Intra-Regional Entry Modes (Source: Author)

Following the analysis of the PSFs’ initial inter- and intra-regional entry modes, the third dimension regarding the operation mode developments is analyzed on the basis of the identified FDI during the focal period. Against expectations, overall the operation modes predominantly increased during the focal period only in two cases, namely for KPMG in North America and Deloitte in East Asia and Pacific. For EY the count of operation mode increases is only slightly higher than the count of operation mode decreases and consistent modes, as shown in table 12. This is surprising as the economic performance of all four PSFs increased throughout the entire focal period, except for KPMG in 2015. This suggests that the operation mode development is highly contextual as it is interrelated with and moreover influenced by the relationships with local actors within the foreign local markets (Swodoba, 2011), thereby contradicting Benito et al.’s (2009) expectations of prevalent underlying coherences acting as crucial determinants of operation mode developments. Another interesting finding is that in North America, all PSFs executed operation mode decreases, which in the case of Deloitte and PwC are significantly more than other operation mode developments, while for EY and KPMG the count for operation mode increases prevails. In East Asia and Pacific, on the on other hand, all PSFs executed

operation mode increases, meanwhile they only prevail over the other operation mode developments in the case of Deloitte.

North America East Asia and Pacific PSF Decrease Consistent Increase Decrease Consistent Increase 29 10 8 23 - - 74% 26% 22% 62% 32 2 8 7 - - 94% 6% 40% 35% 10 8 12 2 - - 32% 26% 39% 25% 12 22 5 17 1 - 35% 65% 18% 61% 4% Table 12: The PSFs’ Operation Mode Development per Region (Source: Author)

North America East Asia and Pacific PSF SAS SAS SAS SAS SAS MS ES SAS MS ES & MS & ES & MS & ES

33 - - 6 - 35 2 - - -

30 1 1 2 - 14 3 2 1 -

27 1 1 1 1 8 - - - -

34 - - - - 23 2 - 1 -

Table 13: Operation Mode Motivation (Source: Author) Notes: SAS = Strategic asset seeking, MS = Market seeking, ES = Efficiency seeking

Next, the fourth dimension regarding the PSFs’ motivations for engaging in the identified FDI during the focal period is analyzed. The potential to acquire supplementary capabilities, which either reinforce and strengthen the PSFs’ services or expand the breadth of the PSFs’ service offerings, has been identified as the main incentive. As table 13 shows, conform the expectations, between 70 and 100 percent of each of the PSFs’ operation modes in both regions were executed seeking strategic assets. This demonstrates the important pursuit of the PSFs to develop strong competitive advantages, distinguishing them from each other and thereby improving their reputation (Kolk & Margineantu, 2009), which is demonstrated by the

reoccurring theme in the data of becoming “the leading provider” (Orbis, 2012) or “market leader” (GlobeNewswire, 2014). Regarding the operation modes in North America, in total, eight operation modes were executed seeking strategic assets and new markets simultaneously, which represent seven percent of all FDI executed by the PSFs in that region. In contrast, in East Asia and Pacific only two FDI were executed pursuing those two incentives at the same time. Interestingly, eight percent of the FDI made in East Asia and Pacific were seeking a new market, while in North America only one percent of the operation modes were made with that incentive.

North America East Asia and Pacific PSF Consulting Audit Tax Legal Consulting Audit Tax Legal

35 2 1 1 23 10 - - 90% 5% 2% 2% 62% 27% 27 6 4 1 13 4 4 2 79% 18% 12% 3% 65% 20% 20% 10% 26 1 2 8 - - - - 84% 3% 6% 100% 26 6 7 25 5 4 - 76% 18% 21% 89% 18% 14% Table 14: Operation Modes by Service Sector (Source: Author)

Lastly, even though the regionalization literature argues that asset specificity is an important factor, there were no theoretical indicators for asset specificity to be a decisive factor when focusing on the professional services industry in the regionalization debate. Surprisingly however, the data revealed that most FDI were made in the consulting sector with the amount ranging from 62 to 100 percent of the total FDI in the respective regions, as table 14 shows. Looking at all four business sectors, consulting, audit, tax and legal, the second highest count of FDI in another service sector only accounts for one to 27 percent, namely in the audit service sector. This indicates that the consulting sector provides the greatest opportunity of value creation for the PSFs in both regions. Thus, focusing on the consulting sector, the analysis showed that the PSFs executed between 62 and 76 percent of the respective FDI with higher- commitment equity operation modes. This demonstrates asset specificity as it can be assumed that the PSFs primarily engaged in ‘consulting FDI’ through higher-commitment equity operation modes, which, in turn, demonstrates the importance of the great potential to implement and exploit FSAs and of the ability to control the FDI (Hill, 2011) for PSFs in the

consulting sector. Furthermore, between 40 and 71 percent of the ‘consulting FDI’ were executed with acquisitions, which indicates that the PSFs to some extent prioritize acquisitions, which provide the advantage to take over the targets’ local market knowledge and to gain immediate local recognition (Hill, 2011).

In the next section, the findings will be discussed in the light of the conceptual foundation through contrasting them with the deductively defined working propositions.

5. DISCUSSION This section presents the discussion of the findings in light of the theory-based working propositions. In total, eight working propositions were developed, of which three are supported and five are not supported by the collected data, as table 15 shows.

The first working proposition, which addresses the fourth dimension regarding the PSFs’ motivation to engage in the studied FDI, is clearly supported as 98 percent of all studied FDI were strategic asset or market seeking, while five percent of all FDI were even both, market and strategic asset seeking. The data revealed that the PSFs were not acting proactively but mostly reactively, seeking complementary capabilities to fulfil local market demands, in order to provide improved, top-of-the-art service offerings to their clients. This confirms Kolk and Margineantu’s (2009) claim, that the competitive advantage in service industries is strongly influenced by the PSFs’ reputation regarding their service quality, with the ultimate goal to establish a monopolistic market position (Pinkse & Kolk, 2012).

The following two working propositions, 2a and 2b, which are associated with the first dimension of the PSFs’ first entry mode during their initial inter-regional expansion, were both not supported by the data. In none of the investigated cases did the PSFs enter a foreign host region with the equity entry mode JV. While JVs were expected to be the most prevalent entry mode, in both studied regions greenfield investments and non-equity alliances were chosen most frequently, which require very distinct levels of risk-taking, ownership, and commitment. Even though no pattern regarding concrete entry modes can be determined, the findings of the strong context-dependence of entry modes in the professional services industry and the importance of the thorough assessment of the host region prior to an inter-regional expansion indicate industry specificity (Sethi & Judge, 2009). Furthermore, the findings suggest that the combined advantage of JVs of exploiting the partner’s FSAs and local market knowledge while sharing costs and risks (Hill, 2011; Kolk & Margineantu, 2009) are not a priority for the PSFs when expanding inter-regionally. Instead, depending on the regional and situational context, low commitment and the potential to exploit specific FSAs of the alliance partner or, on the other hand, full control and the immediate effective implementation of own FSAs such as the PSF’s brand, practices, and corporate culture are sought for.

Next, working proposition 3a, which refers to the second dimension of the PSFs’ entry modes during their intra-regional expansion, is supported by the data. This is based on the findings that ten out of the 14 identified intra-regional expansions were executed via higher- commitment equity entry modes, which include two mergers, one alliance, and seven greenfield

investments. Moreover, the count of higher-commitment equity entry modes prevails over lower-commitment equity and non-equity entry modes in both regions for all PSFs. However, working proposition 3b, which also refers to the second dimension and assumes that mergers or acquisitions are most likely to be chosen as such higher commitment equity entry modes when expanding intra-regionally, is not supported. Instead, in both regions most intra-regional expansions were executed via greenfield investments, which indicates that complete control and the immediate establishment of the PSF’s brand, as well as the implementation of the PSF’s corporate culture are of great value to the PSFs when expanding intra-regionally (Hill, 2011). The fact that the remaining intra-regional entry modes range from non-equity alliances to equity acquisitions indicates that there is no industry specificity, as no pattern for such entry modes can be identified for the professional services industry. However, as noted in the analysis, the data collected to answer the working propositions 2a and 2b with regard to the PSFs’ initial regional entries date back as much as 137 years ago and many intra-regional expansions, which are addressed by the working propositions 3a and 3b took place in the early 20th century. Therefore, the degree of credibility for contemporary situations might need to be explored in a future study to become more confident.

Regarding working proposition 4 and 5, which refer to the third dimension of the development of the PSFs’ operation modes, no evidence has been found to support the assumption that PSFs increase their local commitment and transfer to higher commitment equity operation modes neither over time, nor the better their financial performance is. Instead, the absence of supporting data emphasizes again that operation modes are very contextual and dependent on the development of the PSFs’ relationships with local actors such as, for example, local institutions, the government, or potential partners or targets (Cantwell et al., 2010). Thereby, this study’s findings contradict Benito et al.’s (2009) expectation of prevalent underlying coherences acting as decisive determinants of operation mode developments.

Focusing on working proposition 6, which also refers to the fourth dimension of the development of the PSFs’ operation modes, is supported. The collected data revealed that all PSFs applied at least two different operation modes in each region and also within 15 out of 26 investigated host-region-host-countries during the focal period, as shown in tables 7 to 10 in the within-case analyses. The fact that segmented mode packages are applied in each host region indicates that the advantage of targeting different geographical areas with different operation modes, according to the local circumstances as, for example, peculiar political and institutional characteristics or specific local market demands (Petersen & Welch, 2002) is of great value to the PSFs. Meanwhile, the application of segmented mode packages within host-

region-host-countries emphasizes on the value of the advantage of choosing the most appropriate operation mode in order to meet the demands of different local customer portfolios and to react to changing contextual developments exogeneous to the firm (Benito et al., 2009; Petersen & Welch, 2002). This, in turn, facilitates the PSFs’ reactive nature in responding to local market demands. Moreover, on the national level, the simultaneous application of different operation modes has the advantage that PSFs can exploit operation modes with primary and secondary roles at the same time (Petersen & Welch, 2002). As the data showed, an important primary role was the acquisition of complementary capabilities, whereas supportive roles were, for instance, the internal transfer of capabilities or the improvement of relationships with local institutions.

Working Propositions Result PSFs’ regionalization is most likely to be driven by market and 1 Supported strategic asset seeking. The simultaneous intra- and inter-regional LOF experienced by 2a PSFs during the first entry in a host region is likely to be Not supported associated with a less independent equity entry mode. PSFs’ first entry in a host region is likely to take place through a 2b JV with a local partner to leverage local market knowledge and Not supported thereby to facilitate the development of LB-FSAs. Entering new host countries within the host region, the intra- 3a host-regional expansion is likely to be associated with higher- Supported commitment equity entry modes. PSFs intra-host-regional expansion is likely to take place via the 3b equity entry modes mergers and acquisitions to acquire Not supported complementary LB-FSAs. The longer a PSF operates in a host country within a host region, 4 the more likely the PSF is to transition to a higher commitment Not supported equity operation mode. The better a PSF’s economic performance in a host-region-host- 5 country is, the more likely it is to increase the operation mode to Not supported a higher commitment equity operation mode. PSFs are likely to apply segmented mode packages, which 6 comprise primary and supportive operation modes during their Supported intra-regional expansion. Table 15: Results of the Working Propositions (Source: Author)

Regarding the modern regionalization classification of the complete triad by Ghemawat and Altman (2016), it was chosen as it advances the traditional extended triad classification by Rugman & Verbeke (2004). Through the inclusion of a more comprehensive list of countries the complete triad classification facilitates the alignment of the theoretically driven classification with the common units of accounting in the professional services industries. The objective of the choice was to enable the investigation of corporate activities in regions, which

are not included in the extended triad, thereby departing from the traditional conceptualization. However, the results show that the PSFs’ main activities are localized in extended triad regions, as the choice of regions with most established offices was taken on North America and East Asia and Pacific. Moreover, as a link was previously established between PSFs’ internationalization and their clients’ international expansions (Baaij, 2014; Kolk & Margineantu, 2009), the results suggest that MNEs’ business activities are in general also located in these regions. Hence, the findings of this study support Rugman and Verbeke’s (2004) claim that MNEs are most active within the extended triad regions.

In general, the mixed results regarding the working propositions 2a, 2b, and 3b provide evidence for the existence of semi-globalization at the time of the PSFs’ inter- and intra-regional expansion. Furthermore, the fact that all PSFs continue to execute a variety of different operation modes, ranging from low commitment, non-equity alliances to high commitment, equity greenfield investments, which is addressed by working proposition 4, 5, and 6, supports the assumption of the endurance of semi-globalization up until today (Arregle, Miller, Hitt, & Beamish, 2013; Garrett, 2000; Ghemawat, 2003, Kim & Aguilera, 2015; Rugman & Verbeke, 2004). This is supported by the fact that no clear regional patterns can be identified to pursue the achievement of a monopolistic market position in the professional services industry (Pinkse & Kolk, 2012).

Lastly, even though there were no theoretical indicators for asset specificity to be a decisive factor in the study of PSFs’ regionalization, most of the identified FDI stood in relation to the PSFs’ consulting business area. This indicates that the PSFs were predominantly seeking intangible and tangible assets specifically related to consulting services. Moreover, the results showed that the clear majority of at least 62 percent of the PSFs’ ‘consulting FDI’ in both focal regions were executed through higher-commitment equity operation modes. Therefore, subsequently an industry-specific working propositions is suggested as follows:

PSFs’ FDI involving consulting-related assets are likely to be associated with higher- commitment equity operation modes during their intra-regional expansion.

In the next section, concluding remarks about this study are made, including the mentioning of the limitations, managerial implications, and suggestions for future research.

6. CONCLUSION After briefly recapitulating the executed research, this chapter finalizes the study by first, drawing concluding remarks regarding the research findings, second, emphasizing on the scientific relevance and managerial implications of this research, third, elaborating on the limitations, and lastly, by suggesting future research to advance the field of study.

This study was developed to research the evolvement of MNEs’ entry and operation modes in different geographical regions through a longitudinal study, thereby attempting to determine possible underlying coherences and to develop a profound explanation for the choices of operation modes. The conceptual foundation of the study is composed of a modern conceptualization of regions put forward by Ghemawat and Altman (2016) and the influence of inter- and intra-regional LOF on MNEs’ regionalization, which were approached from an MNE and a location perspective. Asset specificity was researched during the analysis of the data, while through the purposive sampling of the Big Four, which are all active in the professional services industry, industry specificity was assumed. This assumption was in line with the objective of this study to determine patterns within the professional services industry. Thus, the specific research question, which guided this research is:

How do MNEs’ entry and operation modes vary across regions over time?

While the conceptualization of the complete triad is applied in this study in an attempt to advance from the theory-driven extended triad classification of regions, the results show that most of the PSFs’ activities are located within the extended triad. This is highlighted by the fact that North America and East Asia and Pacific were chosen as the focal regions due to the most offices being located there. Attempting to answer the research question with the focus on those two regions, the identified pattern regarding the intra-regional entry modes is that PSFs are very likely to enter new host countries within a familiar host region with higher-commitment equity entry modes. Regarding the identified variation across regions, the data showed that PSFs expand intra-regionally with more confidence in North America, using only higher- commitment equity entry modes, while in East Asia and Pacific, the PSFs also execute alliance entry modes, which indicates a higher level of caution.

Regarding the investigation of the PSFs’ operation modes within the host-region-host- countries, the results show that, against expectations, PSFs do not increase their overall level of risk-taking, commitment, and ownership neither the longer they operate within the host region nor the better their financial performance is, thereby contradicting the claims of several IB scholars (Pedersen et al., 2002; Ellis, 2005; Petersen et al., 2006; Swodoba et al., 2011).

Interestingly, this finding, in turn, highlights the contextuality of operation mode choices (Cantwell et al., 2010). Regarding the variation across regions, the data showed that in North America, all PSFs executed a considerable count of operation mode decreases, ranging from 32 to 94 percent of the total FDI executed within the host region. In East Asia and Pacific, in contrast, the results show that overall, the PSFs execute considerably more operation mode increases than decreases, which indicates a higher growth potential in East Asia and Pacific and, in line with the previous findings, a higher potential to increase local commitment. The findings also revealed that all PSFs apply operation mode packages and thereby exploit the advantages which are first, increased responsiveness to local market demands and second, the ability to engage in primary and secondary activities simultaneously. Prevalent primary activities were found to be the acquisition of complementary capabilities, fostering the breadth and depth of service offerings, while the improvement of local relationships is regarded as a secondary activity. Lastly, even though no theoretical indicators suggested the relevance of asset specificity for the context of this study, the data revealed that the majority of intra-regional FDI were executed in the consulting services sector. Moreover, higher-commitment equity operation modes were found to be associated with such ‘consulting FDI’ in the majority of 62 to 76 percent of the cases, which is why a working proposition regarding the specificity of consulting-related assets was developed subsequently.

Regarding the scientific relevance of this study, by applying a modern and, at the same time, more complete classification of regions, this study incites to shift the focus in the regionalization literature towards a more practical and more global approach. While the extended triad conceptualization of regions is widely accepted among IB scholars, the advancement of the semi-globalization phenomenon calls for a more detailed approach with the potential to investigate the development of semi-globalization more in-depth. Furthermore, through the longitudinal investigation of operation modes, this study advances the research in IB literature, determining underlying coherences for choosing operation modes.

As the findings show, PSFs’ activities remain mainly within the extended triad, which can also be assumed for MNEs, due to the established connection that PSFs largely follow their clients’ in their internationalization journeys (Baaij, 2014; Kolk & Margineantu, 2009). Moreover, the findings suggest that the PSFs strongly focus only on a sub-sample of the host- region-host-countries, as the findings especially for the region East Asia and Pacific demonstrate. This can be of interest to managers of MNEs who are involved in corporate strategy development, as it raises the question whether managers should adapt the MNE’s

global strategies and concentrate their focus on a sub-sample of countries within host regions where the potential to create value for the firm is greatest.

Concerning the limitations of this study, while the limited sample can be regarded as a clear limitation, at large the findings provide an insight into the professional services industry which yet remains understudied as predominant attention is on manufacturing industries in the regionalization debate (Kolk & Margineantu, 2009). Furthermore, even though the qualitative research design facilitates the analysis of content-rich data, the results do not allow for quantification and thereby limit the generalization of the research findings. Also, with regard to the generalizability, as highlighted in the discussion, the PSFs’ initial regional entries date back as much as 137 years and therefore, the degree of credibility for contemporary situations might need to be explored in a future study to become more confident.

Lastly, suggestions for future research are highlighted to facilitate the advancement of the field of study. As this study was designed focusing on a specific industry, an interesting opportunity is to investigate the evolvement of MNEs’ entry and operation modes in different geographical regions through a cross-industry study. This would facilitate to research whether or not further industry specific patterns can be determined that distinguish, for instance, services from manufacturing industries. Furthermore, this study researched the static current as the regional selection was based on the regions where most offices were located. This outlines the opportunity for future studies to investigate the regions which show the relative highest growth in order to capture a distinct selection of regions in an attempt to depart from the extended triad categorization.

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APPENDICES Appendix 1: Deloitte’s FDI 2012-2017

FDI Asset Year EM/OM Country FDI Type Supporting Quote Motivation Specificity 1880 EM US Greenfield MS - Deloitte (n.d.) “[Welch] opened an office in Basinghall Street, London, and then one in New York in 1880.” 1950s EM Canada Merger n.f. - Postwar Growth (Deloitte, n.d.) “Haskins & Sells experienced its own major development by merging with 26 domestic organizations and establishing offices in Canada, Central and South America, Europe, and Japan.” 2012 OM US Acquisition SAS Consulting Übermind (Orbis, 2012) “Mobile technologies are rapidly reshaping the nature of business. This represents a significant opportunity for companies to develop new interaction models with customers, employees and stakeholders, says Ms Janet Foutty, national managing director, technology, Deloitte Consulting LLP.” “Übermind complements Deloitte with extraordinary talent, tools and assets that are customized to the mobile development lifecycle, including proprietary frameworks and methodologies.” 2012 OM US Acquisition SAS Consulting CRG Partners (Orbis, 2012) “With this acquisition, Deloitte broadens its HR transformation capabilities. As a result, we have strengthened our position to be the leading provider of Workday solutions, helping our clients keep pace with innovation to lead their organizations into the future, says Ms Barbara Adachi, national managing director of Deloitte Consulting LLP’s human capital consulting practice.” 2012 OM US Acquisition SAS Consulting iFed (Orbis, 2012) On 22/04/12 it was reported that Deloitte Consulting LLP has acquired iFed LLC, a Lanham, Maryland-based health management and technology software developer. 2012 OM US Alliance SAS Consulting Salesforce.com (PR Newswire, 2012) "Companies in general, but specifically our clients are looking to work more effectively and more efficiently. The inherent benefits and possibilities via cloud computing and salesforce.com can represent a solution catalyst.” 2012 OM US Acquisition SAS Consulting IE Discovery (PR Newswire, 2012) "We are committed to providing our clients innovative e-discovery solutions and services.” 2012 OM US Acquisition SAS Consulting Recombinant Data (Orbis, 2012) "This addition puts Deloitte in a stronger position to help health organizations solve their most complex problems as they adjust to new approaches to care delivery." 2013 OM Canada Acquisition SAS & MS Consulting Monitor Company Group (Orbis, 2013)

“[Mr. Lynch] pointed out that Monitor has a heritage of developing strategies to make companies more competitive, while Deloitte has a proven track record of implementing and executing plans. This will essentially give us a new platform for growth.” 2013 OM US Acquisition SAS Consulting Bersin & Associates (Orbis, 2013) “The acquisition provides our clients with an enhanced portfolio of HR and talent management research, benchmarking and advisory services to help them address these challenges – all from a single source. Together we can help companies navigate the future direction of HR while adding strategic value to their bottom line.” 2013 OM US Acquisition SAS & MS Consulting McColl Partners (The Deal Pipeline, 2013) “Deloitte Financial Advisory Services CEO David Williams said the acquisition of McColl would bolster advisory services the firm could offer to large- and middle-market clients. Middle-market M&A represents a significant growth opportunity for Deloitte and our clients, he said.” 2013 OM US Acquisition SAS Consulting Vigilant (Orbis, 2013) Audit “Cyber risk is a top technology priority for businesses here and around the world. […] The acquisition of Vigilant and its suite of cyber threat management services absolutely complements Deloitte’s security consulting practice enhancing our cyber threat offerings.” 2013 OM Canada Acquisition SAS Consulting Quattro (Business Review Canada, 2013) “The acquisition will combine the capabilities and talent of both firms to strengthen Deloitte's SAP transformation capability in the critical Energy & Resources sector of the Canadian economy.” 2013 OM US Alliance SAS Tax VERTEX (Tenders Info, 2013) “Leading these critical business process changes further enhances Deloitte’s position as a trusted advisor among tax, finance, IT and operations executives. The approach to integrate tax and technology also differentiates Deloitte from competitors.” 2013 OM US Acquisition SAS Consulting Banyan Branch (M&A Navigator, 2013) “The addition of Banyan Branch, a provider of social analytics and insights, community management and digital creative services, is in line with Deloitte Digital's strategy to offer clients a full range of digital marketing services, bolstered by Deloitte's vast business, technology services and capabilities, the buyer said.” 2013 OM Canada Acquisition SAS Consulting TMA Construction Consultants (Accounting Today, 2013) “The new addition will bolster Deloitte's infrastructure and capital projects expertise throughout Canada.” 2014 OM Canada Acquisition SAS Consulting ATD Legal (Marketwired, 2014) “ATD Legal occupies a unique position in the market for electronic document review and records management services in Canada. This transaction enhances our capabilities, enabling Deloitte to deliver end-to-end discovery services to companies' in-house counsel and law firms." 2014 OM Canada Alliance SAS Consulting Konrad Group (Marketwired, 2014) “This alliance builds on Deloitte's already eminent business and technology advisory practice, and in combination with Konrad Group's world class digital capabilities, will make Deloitte Digital in

Canada a one-stop shop for digital strategy, user experience design, creative, mobile/web development and systems implementation.” 2014 OM US Alliance SAS Consulting NetSuite Inc. (PR Newswire, 2014) “NetSuite Inc. (NYSE: N), a leading provider of cloud-based financials /ERP and omnichannel commerce software suites, and Deloitte have formed an alliance to provide implementation, finance transformation, change management and a full breadth of consulting services to the market.” 2014 OM Canada Acquisition SAS Consulting Urgentis Digital Crisis Solutions Inc. (Accounting Today, 2014) “Deloitte's Canadian firm plans to combine the crisis management firm with its nationwide cybersecurity practice to improve its ability to help companies protect their information assets from sophisticated cybersecurity risks.” 2014 OM Canada Acquisition SAS & MS Consulting Visser Consulting Ltd. (Canada Newswire, 2014) “Acquisitions are an important part of our overall growth strategy, and this one is no exception. […] So far this year, we’ve acquired an R&D tax firm, a crisis management boutique and a legal document review company.” 2014 OM US Acquisition SAS Consulting Aggressor (Orbis, 2014) “With this acquisition, Deloitte broadens its HR transformation capabilities. As a result, we have strengthened our position to be the leading provider of Workday solutions, helping our clients keep pace with innovation to lead their organizations into the future, says Ms Barbara Adachi, national managing director of Deloitte Consulting LLP’s human capital consulting practice.” 2015 OM Canada Alliance SAS Consulting Women of Influence (Marketwired, 2015) “By working together, we'll be better positioned to help clients and Deloitte implement inclusion and diversity strategies, develop female leaders, and reap the rewards of a more gender diverse workforce." 2015 OM US Acquisition SAS Consulting LRA Worldwide (Orbis, 2015) “Brand and reputation risk are among the most important risks with which CEOs are grappling. Together with LRA, we can help clients address such challenges with confidence and provide them the tools and insights to protect the unique value of their organizations and promote a consistent brand and customer experience. We will grow our strategic risk services market offering as one of the most significant focuses for Deloitte Advisory and our clients’ businesses". 2015 OM US Acquisition SAS Consulting Compliance Implementation Services (CIS) (PR Newswire, 2015) “To expand compliance and risk services for life sciences and health care industry.“ 2015 OM US Alliance SAS Consulting Sprinklr (Business Wire, 2015) “The alliance will leverage Sprinklr's industry-leading technology and Deloitte Digital's deep sector knowledge, global footprint, and market-leading practices to jointly deliver customer experience management and social business strategy to clients around the world.” 2015 OM Canada Acquisition SAS & MS Consulting Kaisen Consulting (Financial Times, 2015) US

“Combining Deloitte's current leadership consulting research and experience with Kaisen's market leading assessment methodology, IP, and tools, the new practice will target the global leadership services market, estimated to be worth over $40bn a year.” 2015 OM Canada Acquisition SAS Consulting Asset Performance Group (ENP Newswire, 2015) “This transaction brings new reliability engineering and maintenance capabilities to Deloitte's Consulting practice, enabling the firm to deliver a full suite of asset reliability engineering, asset management and performance improvement services to capital-intensive industries across Canada, the U.S. and South America” 2015 OM US Alliance SAS Consulting Medallia (Marketwire, 2015) “Through the alliance, Deloitte Digital will expand their practice to implement Medallia's CEM platform for Fortune 2000 companies, and will offer Medallia as part of its existing transformation, marketing and cloud application capabilities.” 2015 OM Canada Acquisition SAS Audit Bonaccorso & Associates (ENP Newswire, 2015) 'This acquisition and our combined capabilities will allow Deloitte Private to better serve the needs of small and mid-size businesses in this market.” 2016 OM Canada Alliance SAS Consulting Vlocity (Marketwired, 2016) “The alliance allows Deloitte Digital in Canada to offer even more industry-relevant solutions around omni-channel customer engagement, and industry-specific sales and service enablement” 2016 OM US Acquisition SAS Consulting Heat (PR Newswire, 2016) "Adding Heat's extraordinary and award-winning creative capabilities is the perfect complement to our market-leading and long-established digital business.” 2016 OM Canada JV SAS Legal Conduit Law (Marketwired, 2016) “Heather Evans, Managing Partner, Tax for Deloitte said that as the legal market continues to undergo unprecedented change, Deloitte is investing in new models through affiliated law firms to address the evolving legal requirements of clients.” “Conduit Law President and Founder Peter Carayiannis said the deal is about their clients. "Affiliating with Deloitte to form Deloitte Conduit Law LLP means quite simply that we can offer our clients more." 2016 OM US Alliance SAS Consulting Kinaxis (Canada News Wire, 2016) “By teaming with Deloitte, our customers benefit from Deloitte's worldwide presence as well as cross-industry and country-specific supply chain expertise. The alliance between our two organizations will enable supply chain transformations at some of the largest companies in the world." 2016 OM US Alliance SAS Consulting DocuSign, Inc. and Cisco (Marketwired, 2016) "One of the more sought-after capabilities is the ability to rethink how work gets done, with faster digitized business processes, workflow and electronic signatures. We see this happening across the entire business, and we're working side-by-side with DocuSign to bring our clients the business processes they need in the future to give them a major competitive edge."

2016 OM US Alliance SAS Consulting Apple (NewsBites, 2016) “Apple and Deloitte on Thursday joined hands to help companies accelerate their work via solutions available on iPhones and iPads across platforms.” 2016 OM US Acquisition SAS Consulting Casey Quirk (SeeNews North America, 2016) Australia "This is the latest in a string of strategic acquisitions Deloitte Consulting has made in recent years to continue helping our clients solve their most complex business challenges," commented chairman and CEO Janet Foutty. 2016 OM Canada Acquisition SAS & MS Consulting Paahi Soluions (Marketwired, 2016) “The Vancouver IPS location will serve as Deloitte's fourth managed security operations [center], called a Cyber Intelligence Centre by Deloitte, and expands the reach of Deloitte's Cyber Intelligence Centre's in Calgary, Toronto and Montreal to offer support locally in Western Canada making Deloitte a one-stop-shop for clients seeking both the software and insights required to protect their most critical digital assets.” 2017 OM US Acquisition SAS Consulting Day1 Solutions (Orbis, 2017) “The company said the acquisition is expected to enhance Deloitte's cloud capabilities and accelerate its collaboration with leading cloud platforms in the market.” 2017 OM US Alliance SAS Consulting BlackLine, Inc. (IT News Online, 2017) “The alliance enhances Deloitte’s Digital Controllership offering, which helps organizations govern and automate financial accounting processes.” After EM Australia Assumed n.f. - Yarwood Vane and Co. (Deloitte, n.d.) 1979 Alliance “Up until 1979, partners used to sign reports on Yarwood Vane letterhead, Deloitte letterhead or Haskins and Sells letterhead depending on the nationality of the work. Dulhunty Grant and Co, Irish Young and Outhwaite and other well known firms merged into Yarwood Vane and by 1980 the name of Deloitte Haskins and Sells was being used.” 1917 EM China Greenfield n.f. - Deloitte (n.d.) “We opened an office in Shanghai as early as 1917, becoming the first foreign accounting organi[z]ation to establish a presence in this dynamic and prosperous city.” 1979 EM Singapore Alliance n.f. - Deloitte (n.d.) “Deloitte Haskins & Sells registered as a practicing firm in Singapore and operated through Goh Tan & Co [which was founded in 1967].” n.f. EM New n.f. n.f. - n.f. Zealand n.f. EM South n.f. n.f. - n.f. Korea 2012 EM Mongolia Alliance MS - Onch LLC (PR Newswire, 2012) “Mongolia is a fast-growing market in the Asia Pacific region, with its significant natural resources and growing number of domestic enterprises requiring top-quality professional services. Deloitte

Onch LLC is poised to leverage the increased opportunities in the region, particularly in the energy and resources sector.” 2012 OM Australia Acquisition SAS Audit Logro Consulting Ty Ltd (Orbis, 2012) On 30/01/12 it was reported that Deloitte&Touche Australia acquired Logro Consulting Pty Ltd, a Melbourne, Australia-based information technology consulting firm. 2013 OM New Acquisition SAS Consulting Curtis McLean (The Dominion Post, 2013) Zealand “Successful privately owned businesses need access to both specialist and traditional Trusted Business Advisor services. Bringing both teams together better enables us to serve that market and augments our existing Deloitte Private team." 2013 OM New Acquisition SAS Audit Hulton Patchell Support Services (Orbis, 2013) Zealand "We are already seeing an increasing demand for assistance from Maori organi[z]ation whose needs for professional services advice can be varied and complex so it made sense to bolster our resources in that area." 2013 OM Australia Alliance SAS Consulting WorleyParsons (Business News, 2014) Audit “This alliance brings together a pragmatic and structured project management and engineering culture with the problem solving and innovative project financing and risk management capability of an advisory firm.” 2013 OM New Acquisition SAS Consulting Asparona (Orbis, 2013) Zealand The acquisitions not only enhance our market leading position in technology implementation but also ensure that we are broadly equally weighted across both Oracle and SAP platforms." 2013 OM New Acquisition SAS Consulting Tango Group (Orbis, 2013) Zealand "The acquisitions not only enhance our market leading position in technology implementation but also ensure that we are broadly equally weighted across both Oracle and SAP platforms." 2014 OM Australia Acquisition MS Audit Moore Stephens Sydney West (The Australian, 2014) “Home to some 75,000 private businesses, Western Sydney is a vitally important and exciting market for Deloitte Private.” 2014 OM Australia Acquisition SAS Audit KD Johns & Co (The Australian, 2014) “KD Johns&Co has excellent local market credentials and its focus on providing high quality service to its impressive client base makes it a perfect fit for our growing Deloitte Private practice.” 2014 OM Australia Acquisition SAS Consulting Analytics Group (Ausstralian Financial Review, 2014) "This [purchase] strengthens our public sector capability.” 2014 OM Australia Acquisition SAS Consulting Lonsdale Group (The Australian, 2014) “The cloud provides affordable access to the same rich technologies without the need to make huge capital investments on premises. This democrati[z]ation of scale is resulting in different application delivery models emerging in the way businesses operate, such as paying for cloud procurement services as required.” 2014 OM South Alliance SAS Consulting IFS (Cision, 2014) Korea

“IFS, the global enterprise applications company, has signed an agreement with Deloitte Consulting, making the professional services firm its strategic partner for the deployment of IFS Applications(TM) in the oil & gas, construction, EPC and project-based manufacturing industries in South Korea.” 2015 OM Australia Acquisition SAS Audit GMK Partners (The Australian, 2015) “We were particularly attracted to GMK’s strong business advisory skills as well as their tax, superannuation and audit capabilities." 2015 OM Australia Acquisition SAS Audit Davern Dixon (Orbis, 2015) "Davern Dixon is a well regarded and longstanding firm within the Launceston community. Expanding our team will position Deloitte as one of the leading professional services advisers to address the key issues of 2010 and beyond. Liquidity and cash flow continue to be key issues for local businesses, which means a strong demand for expert business planning, budgeting, cash flow and tax advice. In addition, ongoing succession and retirement planning advice continues to be a key focus of our business; in particular we expect local Tasmanians to be interested in the implications of the Henry Tax review on individual and business tax returns, as well as the Cooper Review on superannuation in the next six months." 2015 OM Australia Alliance SAS Consulting Receipt Bank (ICT Monitor Worldwide, 2015) “[T]he agreement will harness the capability and flexibility of Receipt Bank to enhance the Deloitte Private Connect platform as part of the firm's standard service.” 2015 OM Australia Acquisition SAS Consulting Dataweave (Australian Financial Review, 2015) “This transaction is the next step in executing Deloitte’s strategy of investment to bolster its Oracle capabilities in the region. Bringing the team from Dataweave into Deloitte will extend the firm’s capability to shape and support the C- Suite agenda.” 2015 EM Laos Greenfield MS - Deloitte (n.d.) "Cambodia, together with Myanmar and Lao PDR, represents new ground for Deloitte Southeast Asia. […] There are new business opportunities for our clients in emerging markets like Cambodia, and many of our clients are demanding for more world-class professional services on the ground as they increase their investment in this country." 2015 EM Cambodia Greenfield MS - Deloitte (n.d.) "Cambodia, together with Myanmar and Lao PDR, represents new ground for Deloitte Southeast Asia. […] There are new business opportunities for our clients in emerging markets like Cambodia, and many of our clients are demanding for more world-class professional services on the ground as they increase their investment in this country." 2015 EM Myanmar Greenfield MS - Deloitte, (n.d.) "Cambodia, together with Myanmar and Lao PDR, represents new ground for Deloitte Southeast Asia. […] There are new business opportunities for our clients in emerging markets like Cambodia, and many of our clients are demanding for more world-class professional services on the ground as they increase their investment in this country." 2015 OM Australia Acquisition SAS Consulting Qubit Consulting (AFR Online, 2015)

“Qubit’s team of 22 practitioners will significantly boost our Australian Identity Access Management (IAM) practice to 60 professionals and further enhance our digital capability as a firm.” 2015 OM Australia Acquisition SAS Consulting MashUp (ICT Monitor Worldwide, 2015) “Mr Farrall said the acquisition of MashUp, a strategic consultancy speciali[z]ing in integration of brand values, digital content and design thinking, retail spaces, branches, pop up and workplaces, would bring an added perspective of how the physical environment will need to continue adapt.” 2015 OM Australia Acquisition SAS Consulting Cloud Solutions Group (ICT Monitor Worldwide, 2015) "Acquisitions are an important part of our overall growth strategy and we welcome the expertise Fabio will bring to the firm." 2015 OM Singapore JV SAS Consulting GovLab (Enterprise Innovation, 2015) “Developed in partnership with the Singapore Economic Development Board, GovLab works closely with senior government executives and thought leaders in Southeast Asia and globally to develop a unique understanding of the increasingly complex and dynamic world.” 2016 OM Australia Acquisition SAS Audit Sixtree (Orbis, 2016) New “We’ve been through back office and customer technology change waves. We’re now seeing a new Zealand wave, where the next generation of cloud-enabled digital technologies are changing the way people work. And this is where Sixtree and its platform integration capabilities and client solutions, in addition to our existing customer and digital teams, comes in.” 2016 OM Singapore Acquisition SAS Consulting I-Analysis (The Business Times Singapore, 2016) "Combined with Deloitte's existing digital forensic and financial crime analytics capability, I- Analysis substantially extends our ability to help clients prevent and meet heightened regulatory requirements related to fighting financial crime and Money Laundering." 2016 OM Australia Acquisition SAS Consulting Explainers Productions (ICT Monitor Worldwide, 2016) “We are experiencing significant demand for our advisory services and will continue to invest in adjacent capabilities that enable our clients to effectively manage complex change. The Explainers are leaders in creating compelling stories that explain complex ideas. They very much complement our design thinking approach to problem solving and as part of our Customer practice will help our clients connect with their customers in ever more engaging ways.” 2016 OM Australia Acquisition SAS Audit Morse Consulting (Orbis, 2016) “This is such an exciting time for investment and wealth management in Australia as the potentially AUD 4 trillion sector becomes more complex, more global, and organi[z]ation are more in need of speciali[z]ed expertise to navigate and succeed in the market.” 2016 OM Australia Acquisition SAS Audit Kid Neon (Orbis, 2016) “Since MashUp joined Deloitte in August last year, we have experienced strong demand for the team’s expertise in designing physical environments in a way that is sympathetic to today’s digital world and creates seamless customer experiences. Kid Neon provides a logical extension of our brand and spatial design capabilities, but they will also enable us to use augmented reality and virtual reality across our whole consulting practice.”

2016 OM Singapore Alliance SAS - X2 Creative (ICT Monitor Worldwide, 2016) “Working with Deloitte for its first university in Asia Pacific, the agency helped with the creative direction and branding initiatives as well as the launch. The event is also seen as part of Deloittes new global branding movement, refreshing the branch since 2003.” 2016 OM Australia Acquisition SAS Consulting Cinder Group (Orbis, 2016) “The marketing optimi[z]ation capability offered by Cinder expands the offerings of our Customer Behaviour practice and further strengthens our strategic alliance with Salesforce.” 2016 OM Australia Acquisition SAS Consulting Plenary Networks (Australian Financial Review, 2016) “The arrival of the Plenary Networks team adds further to the suite of technology advisory services Deloitte is able to offer private and public sector clients, across industries such as financial services, health care and energy, and geographies, as they grapple with rapidly evolving changes in the technology space.” 2016 OM US Acquisition SAS Consulting Casey Quirk (Financial Wire, 2016) Australia "With Australia being one of the largest asset management markets in the world, the acquisition of Casey Quirk will be extremely valuable to our clients in this market." 2016 OM Singapore Alliance SAS Consulting OutSystems (Marketwire, 2016) “OutSystems Platform can help reduce the cost and time to build mobile native apps and web applications. The Platform responds to the market demand of bi-modal delivery speed, which is required for the coexistence of a core legacy ecosystem with a growing demand for agile and digital transformation.” 2016 OM China Greenfield MS - Deloitte (n.d.) “Deloitte opens more offices around China to seek greater share of lucrative market.” 2016 OM Australia Acquisition SAS Consulting Plenary Networks (Orbis, 2016) “According to Deloitte’s consulting lead partner for technology, strategy and architecture Kevin Russo, through the acquisition, Deloitte will be able to provide all of a client's technology needs.” 2016 OM Australia Alliance SAS Consulting IPsoft (ICT Monitor Worldwide, 2016) “Deloitte and IPsoft have signed an agreement to further develop IPsoft`s cognitive platform Amelia in Australia. In July, Deloitte announced a partnership with IPsoft to roll out two of IPsoft`s products to its US clients: Amelia, an AI platform similar to Amazon`s Alexa, and IPcenter, an autonomic IT management platform. The companies will now be customising the Amelia platform for the Australian market.” 2017 OM Australia Alliance SAS Consulting LiveTiles (Plus Company Updates, 2017) "The alliance with LiveTiles complements our Content and Workflow strategy, and is driven by strong demand by our customers for a flexible, enterprise grade, digital workplace tool that allows business users to control their own user experience. LiveTiles is perfectly positioned to help Deloitte deliver on this need." 2017 OM Australia Alliance SAS - Cre8 (Australian Company News Bites, 2017)

“Under the agreement Deloitte will collaborate with Flamingo to identify opportunities, initially in the Australian market. Deloitte and Flamingo will work together to develop C onversational C ommerce opportunities, helping their clients to respond innovatively to changing consumer [behaviors] in the way goods and services are accessed and purchased” 2017 OM Australia Acquisition SAS Consulting Strut Digital (ARF Online, 2017) “The business advisory giant has bought managed services provider Strut Digital, which speciali[z]es in the increasingly popular area of DevOps, for an undisclosed sum, strengthening its tech transformation services and helping it build an end-to-end offering.”

Appendix 2: PwC’s FDI 2012-2017

FDI Asset Year EM/OM Country FDI Type Supporting Quote Motivation Specificity 1890 EM US Greenfield n.f. - PwC (n.d.) “As a result of growing trade between the UK and the USA, Price Waterhouse opened an office in New York in 1890.” 1907 EM Canada Greenfield n.f. - PwC (n.d.) “First Canadian office of Price Waterhouse opens in Montréal; Roderick Edward Moore managed all Canadian operations from the New York office.” 2012 OM Canada Acquisition SAS Consulting MTS Allstrem’s Professional Services Consulting Group (Orbis, 2012) “PwC Consulting will now be able to leverage the expertise of this group and their network of vendor and subcontractor relationships to greatly expand our technology service offerings, said Mr Bill McFarland, National Managing Partner at PwC Canada.” 2012 OM US Alliance SAS Consulting BPM (Business Wire, 2012) “Under the nature of the alliance, PwC will have the ability to add strategic BPM advisory services to its existing portfolio of services.” 2012 OM US JV SAS Consulting Hong-Kong China PwC Joint Venture (Australian Financial Review, 2012) Australia "We have about 1000 people in China now but the investment is to grow it rapidly, using talent China from other parts of the globe, hiring and training local talent, and through acquisition," Mr Kumar said. […] Different people have different skills, resources and capital at their disposal," Mr Kumar said. "In this case we already have a strong consulting presence in a market that is rapidly growing and evolving. The question is how can the [PwC global] network work with the China firm to develop that market for domestic Chinese and global clients." 2012 OM US Acquisition SAS Consulting Ray Group International (PR Newswire, 2012) “The core skill set of the RGI team strongly complements PwC's existing services in healthcare IT, program management and communications consulting. Their client-centric approach mirrors our own, and we know they will bring tremendous additional value to our clients.” 2013 OM US JV SAS Consulting Jive (GlobeNewswire, 2013) “The Jive joint business relationship enables PwC to help our clients achieve increased collaboration and communication, which can result in more agile and speedy responses to address their business challenges, said Mark McCaffrey, PwC partner and global software leader.” 2013 OM US Alliance ES Consulting (WMI Company News, 2013) China “PwC China, PwC United States and PwC Australia have formed a new alliance which will Australia expand the range of professional consulting services in China. This is aimed at serving the growing needs of multinational companies and state-owned enterprises operating in the country. […] The alliance will bring together professionals and expertise from the three PwC companies. […] Commenting on the move, Andrew Watkins, PwC China and Hong Kong consulting leader

said: Companies in China are looking for consultants who can combine deep specialist capability with insightful industry knowledge, both domestically and internationally." 2013 OM US Alliance SAS Consulting Galvanize (PR Newswire, 2013) "This initiative further strengthens our commitment to developing home grown businesses in our state and encouraging local entrepreneurs to seize the resources they need to become tomorrow's most successful companies." 2013 OM Canada Acquisition SAS Consulting PGPM Comptabilité, Fiscalité, Notariat (Orbis, 2013) “Bringing PGPM and Macalis on board is consistent with PwC's strategy to expand our footprint into the Gatineau market and in particular in the private company space.” 2013 OM US Acquisition SAS Consulting BGT (PR Newswire, 2013) "The addition of the BGT business brings our clients new and creative game changing capabilities in customer experience and design. These sophisticated digital creative strategists, when coupled with PwC's broad range of global business and industry consultants, strengthen our ability to deliver holistic, end-to-end business transformation around the world. We believe the addition of this team will be a notable differentiator in the market, bringing significant value to our clients." 2013 OM US Alliance SAS Consulting E2open (Business Wire, 2013) "E2open and PwC bring together a wealth of supply chain expertise and industry leading technology, said Mark Woodward, President and CEO, E2open.” 2013 OM US Acquisition SAS Consulting HumanR, Inc. (PR Newswire, 2013) “Through the acquisition, PwC has not only gained intellectual and analytical capabilities and technology platforms, it also has combined two of the leading names in workforce analytics and employee surveys.” 2014 OM Canada Acquisition SAS Consulting Westmark Consulting (Canada NewsWire, 2014) “Merging Westmark's expertise with PwC's existing service offerings allows us to build on the reputation and capabilities of two leading consulting firms.” 2014 OM Canada Acquisition SAS Legal Bomza Law Group (Orbis, 2014) “We're delighted to have Janet and her team affiliate with us. The affiliation with PricewaterhouseCoopers Immigration Law LLP connects well with PwC's employee mobility service offerings including expatriate tax, payroll and mobility consulting.” 2014 OM US Acquisition SAS Audit Executive Risk Strategies’ assets (Orbis, 2014) “At a time when well-publicized cyber security threats and data privacy breaches have underscored the critical nature of these issues to both businesses and consumers, the addition of MPC will further strengthen and expand PwC’s Data Protection and Privacy resources," 2014 OM Canada Acquisition SAS Audit Biond Consulting (Orbis, 2014) Tax “The Canadian unit of UK-based professional services firm PricewaterhouseCoopers International Ltd (PwC) said it had taken over Biond Consulting to beef up its management and technology consulting services.” 2014 OM Canada Alliance SAS Consulting Systemgroup (Canada NewsWire, 2014)

“This new relationship will allow PwC's Health Industries Consulting practice to expand our service offerings to meet our client's growing complex issues." 2014 OM US Acquisition SAS Consulting Ant’s Eye View (Orbis, 2014) “The combination will result in enhanced ability for PwC's Advisory business to help clients employ social media for customer engagement and brand management, Joe Duffy, PwC partner and leader of the firm's US Consulting practice, said.” 2014 OM Canada Acquisition SAS Consulting Westmark Consulting (Canada NewsWire, 2014) “The acquisition will allow PwC to meet client demand for Lean Transformation and Operational Excellence services, bringing together Westmark Consulting's Lean Six Sigma Master Black Belt certified professionals with PwC's 30 Lean practitioners across the country. Specifically, PwC will deepen its expertise in accelerated transformations, strategy and development, change management and Operational Excellence program delivery.” 2014 OM Canada Acquisition SAS Consulting Balkon (Canada NewsWire, 2014) "We're delighted to welcome Balkon to PwC. Our business transformation skills coupled with Balkon's technology expertise are a perfect match. We can now bring these capabilities and experience to our existing and new clients to help drive their HR and finance transformations, says Diane Horton, national leader, People and Change, PwC.“ 2014 OM US Acquisition SAS Consulting Advanced Pharmacy Concepts (Orbis, 2014) “On 15/12/14 it was announced that the acquisition will bring analytical and consultative services benefits.” 2015 OM Canada Acquisition SAS Consulting West Monroe Partners’ Canadian Supply Chain Practice (ENP Newswire, 2015) “We are pleased to welcome new talent and capabilities to our Consulting practice, which will increase our ability to meet growing client demand in supply chain services all over North America.” 2015 OM Canada Acquisition SAS Consulting Platinum Legal Group (Canada NewsWire, 2015) “[Platinum Legal Group] expertise compliments our experience in data acquisition and analysis allowing us to expand our evidence management and e-discovery offering." 2015 OM Canada Alliance SAS Consulting DynaSys (PR Newswire, 2015) “Current and future users of our software in North America can now count on the know-how of recognized professionals from a leading firm like PwC, as well as easy access to best practices.” 2015 OM US Alliance SAS Consulting Tanium (ICT Monitor Worldwide, 2015) "Having spent years on the front lines of cyber crime investigations for Fortune 500 companies, it's clear that the combination of PwC's Cyber Security Practice capabilities and Tanium's platform enabling 15-second endpoint visibility and control will bring immense value to organizations." 2015 OM US Greenfield MS Audit Expansion Private Company Services Practice in Florida (PR Newswire, 2015) Tax "We've expanded our national practice exponentially and expect Florida to be our fastest growing Consulting market for private company services to date. Through our global network and local professionals

we will help companies in Florida to meet business demands and remain a key driver of the overall U.S. economy." 2015 OM US Greenfield SAS & ES Consulting Launch Experience Center (Business Wire, 2015) "Since launching our Digital Services business last year, we've grown our team by approximately 50 percent and have increased the number of digital projects by 100 percent, said Tom Puthiyamadam, Principal, PwC Advisory, and Digital Services Leader. Building on that success, our new Experience Center approach allows PwC to leverage its unique set of skills to help clients move faster, create more compelling experiences, and position themselves to win in today's digital- first world." 2015 OM US Alliance SAS Consulting Skyhigh Networks (ICT Monitor Worldwide, 2015) “The move […] boosts PwCs cybersecurity offerings, giving them a more end-to-end edge, says Bram van Tiel, advisor at PwC in the Netherlands, and builds on a previous alliance with Tanium, another US-based IT security firm.” 2015 OM US Alliance SAS Consulting Vertex (Business Wire, 2015) Tax "The key to meeting these new transparency requirements will be the ability to harness data. Vertex® Enterprise is a differentiated tax performance management platform, and directly aligns with our vision for the tax function of the future. Vertex Enterprise, along with PwC's strong track record as leading assurance, tax and advisory firm, will be a powerful combination in the marketplace." 2015 OM Canada Acquisition SAS Consulting Cinovate (accountingtoday.com, 2015) “The acquisition will enhance PwC Canada's delivery of a suite of cross-industry, cloud-based solutions powered by the Salesforce Customer Success Platform.” 2016 OM US Alliance SAS Audit Terafina (Marketwired, 2016) “Terafina's integrated omni-channel platform helps address a critical need among today's major financial services institutions. Together we can build, test and scale the platform, and integrate it into a broader suite of services to deliver even more value to our clients." 2016 OM US Alliance SAS & MS - NAB (TendersInfo, 2016) Australia “This initiative recogni[z]es the rapid growth in new business models based around access to assets, rather than ownership of assets and includes things like ride-sharing or accommodation sharing. NAB research shows that this segment of the economy is currently growing at around 140% annually.” 2016 OM US Alliance SAS Audit Libra (PR Newswire, 2016) Australia Tax "The combination of Libra and PwC has already sparked great interest from some of our global clients. PwC Australia are thrilled to be in this Joint Business Relationship with Libra and look forward to many successful blockchain projects together, said John Shipman, PwC Fintech Leader, Asia.” 2016 OM US Alliance SAS Consulting InvestCloud (Marketwired, 2016) “PwC will be a preferred implementation and strategy partner of InvestCloud focused on enterprise delivery and innovative development of new financial applet capabilities.”

2016 OM US Alliance SAS Audit CSC (Business Wire, 2016) “Our alliance will be a force multiplier for accelerating our clients' business and IT transformations and positioning them to win with solutions they can choose with confidence." 1906 EM China Alliance n.f. - PwC (n.d.) “Lowe, Bingham & Thomsons is formed in Shanghai, works closely with Price Waterhouse & Co. Hong Kong firm becomes correspondent for PW.” 1933 EM Australia Alliance n.f. - PwC (n.d.) “First agreement with Cooper Bros for Allard, Way & Hardie to act as agents in Australia, is negotiated by 77 year old Horace Allard during a trip to London.” n.f. EM New n.f. n.f. - n.f. Zealand n.f. EM Singapore n.f. n.f. - n.f. 2012 OM Australia JV SAS Consulting Hong-Kong China PwC Joint Venture (WMI Company News, 2012) China "We have about 1000 people in China now but the investment is to grow it rapidly, using talent US from other parts of the globe, hiring and training local talent, and through acquisition," Mr Kumar said. "Different people have different skills, resources and capital at their disposal," Mr Kumar said. "In this case we already have a strong consulting presence in a market that is rapidly growing and evolving. The question is how can the [PwC global] network work with the China firm to develop that market for domestic Chinese and global clients." 2012 OM New Acquisition SAS Consulting Asia-Pacific Risk Management (Orbis, 2012) Zealand “PwC New Zealand’s chief executive officer Mr Bruce Hassall said: This is a positive and significant step in further developing our financial product valuation service, and cementing PwC’s commitment to be the number one provider of Treasury Risk Management advice in New Zealand.” 2012 OM Australia Alliance SAS Consulting ThoughtWorks (ENP Newswire, 2012) “The alliance enables PwC and ThoughtWorks Australia to come together, as needed to the benefit of its clients by sharing its information and digital expertise. It reinforces both companies' commitment to helping businesses not just evolve within the digital economy, but to successfully harness the power of technology and deal with industry disruption head on.” 2013 OM China Alliance ES Consulting Hong-Kong China PwC Joint Venture (WMI Company News, 2013) US “PwC China, PwC United States and PwC Australia have formed a new alliance which will Australia expand the range of professional consulting services in China. This is aimed at serving the growing needs of multinational companies and state-owned enterprises operating in the country. […] The alliance will bring together professionals and expertise from the three PwC companies. […] Commenting on the move, Andrew Watkins, PwC China and Hong Kong consulting leader said: "Companies in China are looking for consultants who can combine deep specialist capability with insightful industry knowledge, both domestically and internationally." 2014 OM Australia Acquisition SAS Consulting MGI Melbourne (Australian Financial Review, 2014) “The MGI Melbourne team bring wealth advisory and succession experience that will complement our existing capabilities and further strengthen the breadth and depth of our service offering."

2014 OM China Alliance SAS Tax ABP (Property Week, 2014) “More and more Chinese firms are seeking a foothold in the UK and Europe. Our dedicated China team provides hands on, practical assistance to make it as pain-free as possible for Chinese companies to set up here and make inroads in the UK market. As the service develops, together with ABP we will seek to provide the reverse; assistance to companies looking to open offices in China." 2014 OM Australia Alliance SAS Consulting Scale’s Angels (The Australian, 2014) “We see a great opportunity to partner with Scale, as a business which explicitly supports female entrepreneurs and investment, Mr Gregory said. […] Scale can make a real difference in diversity, can grow its national footprint with the support of all its partners, and is highly professional. We're really pleased to be able to work with them." 2015 OM Australia Acquisition SAS Consulting Cary Consulting (Orbis, 2015) “With the Appian acquisition we will be able to meet demand in the market for ensuring these large scale projects meet their business case through project management and smarter processes from plenary to construction.” 2015 OM Singapore Greenfield MS Consulting Fund [center] for crossborder distributors (Asian Investor, 2015) “Consulting firm PricewaterhouseCoopers (PwC) has opened an investment fund [center] in Singapore to provide distribution services to asset managers expanding internationally and within Asia. “ 2016 OM US Alliance SAS & MS - NAB (TendersInfo, 2016) Australia “This initiative recogni[z]es the rapid growth in new business models based around access to assets, rather than ownership of assets and includes things like ride-sharing or accommodation sharing. NAB research shows that this segment of the economy is currently growing at around 140% annually.” 2016 OM US Alliance SAS Audit Libra (PR Newswire, 2016) Australia Tax "The combination of Libra and PwC has already sparked great interest from some of our global clients. PwC Australia are thrilled to be in this Joint Business Relationship with Libra and look forward to many successful blockchain projects together, said John Shipman, PwC Fintech Leader, Asia.” 2016 OM Australia Alliance SAS Consulting Western Sydney University (Premium Official News, 2016) Audit “PwC Sydney Managing Partner Joseph Carrozzi said the Greater Western Sydney region was a Tax key growth area and PwC was responding to changing market demands and staff needs.” 2016 OM Singapore Greenfield SAS Legal (The Straits Times, 2016) "Asia's continued growth and advancements in technology present both opportunities as well as challenges for the sector. There are also inherent synergies between legal and accounting services which can be better harnessed," Senior Minister of State for Finance and Law Indranee Rajah had said earlier.” 2016 OM Australia Acquisition SAS Consulting Bluefan (Orbis, 2016)

“PwC Infrastructure and Urban Renewal Leader Ms Clara Cutajar said: Alongside SIG’s strong data analytics capability, this will present a compelling additional service offering for PwC to advise on infrastructure projects much earlier in their life cycle and we’re delighted to welcome John Marinopoulos and the SIG team to PwC.” 2016 OM Singapore Greenfield MS Legal PwC Legal International (The Lawyer, 2016) “The organic evolution of our business is in response to the growing market demand we are seeing in Asia for integrated business solutions across multiple territories. This is the driver behind this move to enhance our capabilities in the region.” 2017 OM Singapore JV SAS Consulting High-Tech Bridge (Wireless News, 2017) “PwC Singapore and High-Tech Bridge reported a strategic business partnership in the APAC region to provide PwC's clients with the most comprehensive cybersecurity, compliance and risk management digital services.” 2017 OM Australia Greenfield SAS Consulting New Agri Team in Australia (Agri Investor, 2017) Audit “With this new specialist advisory service we offer our food and agribusiness clients and capital Tax providers an end-to-end service which can integrate financial and commercial advisory, accounting and audit and tax and legal advice led by partners with deep sector expertise, a passion for agriculture and strong connections to rural Australia, PwC deals leader Troy Porter said.” 2017 OM China Greenfield MS Consulting Excellence Center (China Daily, 2017) Audit “Elton Yeung, strategy and innovation service leader of PwC Greater China, said the office in Shenzhen is PwC's first innovation center in the world. This reflects China's supportive policies for entrepreneurship and innovation, and the market potential that approach brings, he said.”

Appendix 3: EY’s FDI 2012-2017

FDI Asset Year EM/OM Country FDI Type Supporting Quote Motivation Specificity 1924 EM US Alliance n.f. - EY (n.d.) In 1924 the British firm Whinney Smith & Whitney (founded in 1894) engaged in an alliance with Ernst (founded in 1903) which was followed by a merger of the two firms in 1978. Betw EM Canada Greenfield n.f. - EY (n.d.) een “Ernst expanded his company to more than 50 locations across the United States and Canada.” 1903 - 1924 n.f. EM Mexico n.f. n.f. - n.f. 2012 OM Canada Acquisition SAS &MS Consulting Hergott Duval Stack (Canada NewsWire, 2012) “Given the breadth and depth of Hergott Duval Stack relationships across Saskatchewan's private mid-market space, […] this deal boosts Ernst & Young's Western Canada operations and Entrepreneurial Services practice. Like us, Hergott Duval Stack is committed to working with, supporting and celebrating entrepreneurs. Those common values empower us to up our game in Entrepreneurial Services, and offer private companies the innovative services they need to propel their businesses - and the Canadian economy - forward." 2012 OM US Acquisition SAS Consulting Jeffrey A. Parker & Associates (The Bond Buyer, 2012) “We are acquiring Jeffrey A. Parker & Associates Inc. to meet market demand for infrastructure advisory as the financing and development of U.S. infrastructure becomes critical to the U.S. economy and national competitiveness.” 2013 OM US Greenfield MS Consulting Global IT Center (States News Service, 2013) “According to the Technology Association of Georgia, software and IT is the largest sector of the state's workforce and economy, with telecommunications and high-tech equipment close behind.” 2013 OM US Acquisition SAS Consulting Semphonic (Orbis, 2013) “Semphonic adds deep experience into the complex website and mobile app customer interaction challenges our clients may face in developing and executing their digital channel strategy.” 2013 OM Canada Acquisition SAS Consulting SR&ED Automation (Canada NewsWire, 2013) “EY officially welcomed boutique firm SRED Automation into its family today, broadening the firm's entrepreneurial and western Canada footprints while simultaneously creating one of Canada's largest dedicated Scientific Research & Experimental Development (SR&ED) practices. […] This move grows the many ways in which we'll work with business owners on the SR&ED claim preparation and advisory services that allow them to do what they do best: drive growth, jobs and the economic future of this country.”

2013 OM Canada Acquisition SAS Tax Thomson Reuters Corporation's Tax Preparation and Court Accounting Outsourcing businesses in the US (Orbis, 2013) "This is just the latest example of EY's commitment to offering the most advanced technology and services available to our clients.” 2014 OM US Acquisition SAS Consulting BPM Specialists (Orbis, 2014) “With our combined skills and experience, Ernst&Young LLP will now become one of the top Pega services providers, and EY one of the only organizations to offer a complete end-to-end lifecycle service capability. Together, we are better equipped to deliver business transformation - strategy to solution deployment - to help accelerate our clients’ growth." 2014 OM US, Acquisition SAS Consulting LogiStar Solutions (PR Newswire, 2014) Canada, “LogiStar's renowned supply chain execution capabilities can help EY expand its own services and Mexico offer clients additional warehouse management and distribution network optimization offerings.” 2014 OM Canada Acquisition SAS Consulting Up Consulting (Canada NewsWire, 2014) “We're dedicated to helping companies move their businesses forward in this evolving market. With Up Consulting, we're strengthening our teams and enhancing our advisory capabilities to better serve our clients.” 2014 OM Canada Acquisition SAS Consulting Ambir Solutions (Canada NewsWire, 2014) “By welcoming Ambir Solutions to the EY family, we're strengthening our teams and enhancing our IT advisory capabilities to better serve our clients.” 2014 OM Canada Greenfield ES & MS Consulting Canadian Centre for Advanced Analytics (Canada NewsWire, 2014) “EY's [Center] will leverage the rich talent pool right here in Atlantic Canada to build its dedicated team, which will serve clients across Canada and around the world. […] EY's investment to grow this capability in Atlantic Canada, along with our recent acquisition of Ambir Solutions, the leading independent IT and business consulting firm in Atlantic Canada, will support our efforts to respond to the significant demand for analytics. We are currently serving clients from around the world from our new state of the art Centre at RBC Waterside place. We will continue to expand both in numbers and capabilities in the coming months.” 2014 OM US, Acquisition SAS Consulting Five Point Partners (Orbis, 2014) Canada, the "Five Point’s renowned customer information systems (CIS) capabilities can help EY expand its Philippines own CIS services and together work with clients to replace their legacy customer relationship management and billing systems and transform their customer’s experience," 2014 OM US Acquisition SAS Consulting Parthenon Group (PR Newswire, 2014) “Parthenon’s substantial capabilities will help our clients make better capital allocation decisions and grow sustainably. This in turn will help us fulfill our purpose of building a better working world.” 2014 OM US Alliance SAS Consulting Pegasystem (Express Computer, 2014) “EY and Pegasystems will now offer full end-to-end, global technology solutions, from upfront consulting through deployment and ongoing services. These solutions provide clients with the ability to meet today's challenges for digital enterprises.”

2015 OM Canada Alliance SAS Consulting Los Alamos National Laboratory (ENP Newswire, 2015) “We are very excited to be working with Los Alamos as part of our overall mission to transition their heritage of national cybersecurity and innovation to the private sector, and arming our clients with the most advanced tools and resources to combat cyber-threats.” 2015 OM US Alliance SAS Consulting Hortonworks (PR Newswire, 2015) “The alliance will enable EY and Hortonworks to assist organizations in driving value from their existing technology.” 2015 OM US Alliance SAS Consulting YourEncore (ENP Newswire, 2015) “'This alliance is pioneering because it combines YourEncore's deep, hands-on industry knowledge with EY's consulting experience to specifically address client needs with on-demand services, helping them be strategically nimble in an evolving pharmaceutical industry.” 2015 OM US Acquisition SAS Consulting Mycrosoft (PR Newswire, 2015) “The Internet of Things has created a new cyber frontier and our new team members from Mycroft provide the perfect fit to offering our clients solutions to their cybersecurity concerns.” 2015 OM US, Acquisition SAS Consulting Entegreat (PR Newswire, 2015) Canada “The addition of Entegreat will enhance EY's manufacturing advisory capabilities and will help EY meet the evolving needs of clients for real-time actionable analytics that improve efficiency and productivity in manufacturing, production and supply chain.” 2015 OM US Acquisition SAS Consulting NorthPoint Digital (PR Newswire, 2015) “NorthPoint Digital offers unique IP and credentials that we can immediately leverage to help further our growth across a full range of digital capabilities that are critical for our clients.” 2016 OM US Acquisition SAS Consulting Society Consulting (PR Newswire, 2016) With the Society Consulting team as part of EY, we can enhance clients’ digital experiences by harnessing world class technology delivery, data science and data architecture capabilities.” 2016 OM Canada Alliance SAS Consulting OpenText (Canada NewsWire, 2016) “The alliance with OpenText will enable EY to address key customer issues around managing content, while simultaneously understanding patterns of behavior and expected outcomes.” 2016 OM US Alliance SAS Consulting Adobe (PR Newswire, 2016) “As the market continues to shift toward the concepts of digital enterprise and experience-led transformation, EY sees this as a key opportunity to team with Adobe to develop a new suite of capabilities and offerings to support our clients in this digital ecosystem.” 2016 OM US Alliance SAS Consulting Development Dimensions International (PR Newswire, 2016) “DDI is known for delivering innovative, business-focused solutions to companies focused on their leaders. Together, we will build a powerful global platform for developing leaders today and in the future.” 2016 OM US Alliance SAS Consulting Society Consulting Team (PR Newswire, 2016)

“[The] [a]greement strengthens EY position as a leader in digital analytics and big data services for compelling customer experiences. […] The Society Consulting team brings new depth to EY's market-leading offerings in digital analytics, analytics managed services and big data services.” 2017 OM US Greenfield ES Consulting National Executive Support Center (States News Service, 2017) Tax “We were very impressed with the level of talent in Louisville and commend efforts by the city, Audit state and local learning institutions to grow the talent base even more aggressively and in new areas. […] That, along with Louisville's affordability and quality of life, were important factors in our location decision.” 2017 OM US Alliance SAS Consulting PTC (ENP Newswire, 2017) “PTC's IoT solutions enable end-to-end lifecycle management in an easy and user-friendly way. EY will contribute its knowledge and skills to help companies create smart manufacturing systems that enable them to adopt new business models and optimize current systems and processes.” n.f. EM Australia n.f. n.f. - n.f. 2004 EM Japan Merger n.f. - EY (n.d.) “Shin Nihon & Co. [which was founded through the merger between Tetsuzo Ota & Co. (founded in 1967) and Showa Audit Corporation (founded in 1969)] became a member of Ernst & Young. The English name changed to Ernst & Young ShinNihon.” n.f. EM The Alliance n.f. - EY (n.d.) “[SGV & Co., the Philippine accounting firm] began correspondent relations with some Philippines of the leading firms in the West, among them Arthur Andersen & Co., Ernst & Ernst, Haskins & Sells and Arthur Young.” 2012 OM Japan Acquisition SAS Consulting Arrows Consulting (Orbis, 2012) “The acquisition will enable Ernst & Young to enrich its financial transformation-related services, including system integration support.” 2014 OM Australia Acquisition SAS Consulting Sweeney Research (PR Newswire, 2014) “This acquisition will strengthen EY’s ability to help our clients move beyond the design of customer strategies and advise them on the execution of these strategies, particularly in the rapidly growing digital space.” 2014 OM US, Acquisition SAS Consulting Five Point Partners (Orbis, 2014) Canada, the "Five Point’s renowned customer information systems (CIS) capabilities can help EY expand its Philippines own CIS services and together work with clients to replace their legacy customer relationship management and billing systems and transform their customer’s experience," 2014 OM Australia Acquisition SAS Consulting Net Balance (Orbis, 2014) “This acquisition will further strengthen EY’s ability to service our clients across all areas of sustainability and climate change, particularly social, supply chain, energy and sustainability advisory services.” 2014 OM Australia Acquisition SAS Consulting Oyster Consulting (Orbis, 2014) “James and Dean have in-depth knowledge of the resources sector both here and internationally. They bring extensive experience particularly relating to strategy, acquisitions, operational performance improvement, productivity acceleration and end-to-end value chain optimi[z]ation.”

2015 OM Australia Acquisition SAS Consulting C3 (PR Newswire Europe, 2015) “This will allow us to offer further value to our clients including a significant, immediate off- shoring capability, additional highly qualified people with deep industry expertise and the chance to continue our innovation in the area of advanced analytics and machine learning.” 2015 OM Australia Acquisition SAS Consulting Intelligent Developments (Orbis, 2015) “SD Analytics’ unique cognitive simulation approach goes beyond predicting human [behavior] of populations. It enables our clients to explore scenarios and identify competitive strategies to influence consumer behavior.” 2016 OM Australia Acquisition SAS Consulting Roam Consulting (Orbis, 2016) “The specialist energy market modelling and data analytics that Ian, Ben and their team bring to EY will enable us to grow our national valuation and business modelling team and further build our economic and regulatory capabilities in the power and utilities sector.”

Appendix 4: KPMG’s FDI 2012-2017

FDI Asset Year EM/OM Country FDI Type Supporting Quote Motivation Specificity 1911 EM US Merger n.f. - KPMG (n.d.) “James Marwick founded the accounting firm Marwick, Mitchell & Co. with Roger Mitchell in New York City in 1897. […] In 1911, William Barclay Peat & Co. and Marwick, Mitchell & Co. joined forces to form what would later be known as Peat Marwick International (PMI), a worldwide network of accounting and consulting firms.” n.f. EM Canada Assumed n.f. - KPMG (n.d.) Merger “In Canada, the firm's roots go back to 1869. Since that date, more than 115 predecessor firms in communities across the country have joined forces to create what is now KPMG LLP (Canada).” 2012 OM US Partial SAS Tax Thomson Reuters’ indirect tax managed business (Orbis, 2012) Acquisition “This acquisition brings the market-leading technology, content and skilled professionals of the ONESOURCE Indirect Tax Managed Services business of Thomson Reuters together with KPMG’s demonstrated ability to manage the complex, evolving landscape for indirect tax in the US and globally.” 2012 OM Canada Acquisition SAS Tax Burns Hubley (Orbis, 2012) Consulting "The addition of Burns Hubley brings dynamic relationships along with solid tax and advisory services experience to the KPMG Enterprise family." 2012 OM US Alliance SAS Consulting Apptio (Telecomworldwide, 2012) “US audit, tax and advisory firm KPMG LLP and Apptio, a provider of Technology Business Management (TBM) solutions, announced on Thursday a business alliance that will provide KPMG's clients with Apptio's solutions that will help to manage the cost, quality and value of IT Services as well as new technology.” 2012 OM Canada Acquisition SAS Audit Chan Foucher LeFebvre (Canada NewsWire, 2012) Consulting "The addition of Chan Foucher LeFebvre brings dynamic relationships and solid community leadership to the KPMG family," said Dennis Fortnum, Canadian Managing Partner, KPMG Enterprise. Their entrepreneurial spirit and highly skilled professionals are a perfect fit for our firm. We are committed to serving this growing region, and private companies and entrepreneurs will benefit from the collective experiences and talents of our teams." 2012 OM US Alliance SAS Consulting AxiomSL (PR Newswire, 2012) “By partnering with a leader in regulatory reporting technology we have been able to rapidly incorporate our actual field experience with Form PF into a tested software solution. This should help our clients reduce costly manual work and accelerate their efforts to submit controlled, high- quality Form PF data to regulators, added Jonathan Cohn, a KPMG principal for IT strategy and performance.”

2012 OM Canada Acquisition SAS Consulting Secor Inc. (Canada NewsWire, 2012) "Combining our deep client relationships, SECOR's understanding of both the Québec and Canadian marketplace, and KPMG's multi-service offering and national and global experience, we will be able to better assist our clients to grow and adapt to changing business environments, improve efficiency and cost management, manage regulatory change, and build human capital capacity." 2012 OM US Acquisition SAS Consulting Workday Consulting Practive from AXIA (Globe Newswire, 2012) "Adding the deep and focused IT experience of these professionals to our Enterprise Solutions practice significantly advances our ability to address clients' technology enablement and enterprise transformation needs.” 2012 OM Canada Acquisition SAS Consulting Cochrane & Associates (Canada NewsWire, 2012) "This acquisition further solidifies our commitment to the changing needs of the agricultural industry in Western Canada.” 2012 OM Canada Acquisition SAS Audit Cox Merritt & Co. (Canada NewsWire, 2012) Tax “The acquisition of Kanata-based accounting firm grows KPMG Enterprise presence in Eastern Ontario. [...] The welcome addition of Cox Merritt to our KPMG Enterprise team demonstrates our dedication to provide responsive and effective advice to our Enterprise clients." 2013 OM Canada Acquisition SAS Consulting Plato Consulting Inc. (Canada NewsWire, 2013) “The healthcare and public sectors are undergoing significant transformation, and Plato's capabilities ensure we will deliver leading edge solutions for our clients in Atlantic Canada. […] An excellent fit for the firm, the Plato team brings IT capabilities instrumental to delivering these unique services and meeting evolving market needs." 2013 OM US Acquisition SAS Consulting Hackett Group’s ERP practice (TendersInfo, 2013) “Mr Stephen Chase, KPMG’s service line leader for Technology, stated: This transaction complements KPMG’s investments in our fast-growing business transformation capabilities, further building on our October 2011 acquisition of Optimum Solutions, an Oracle Platinum Partner. We remain focused on helping clients use technology to transform key operations, such as human capital management (HCM), finance and accounting, tax, business intelligence and supply chain management.” 2014 OM US Acquisition SAS Consulting Link Analytics (PR Newswire, 2014) “Adding Link Analytics' experienced analytic professionals and proprietary methodologies provides a platform to accelerate the design and delivery of analytic solutions to help our clients turn Big Data into actionable insights. This acquisition is the latest component of KPMG's strategy to provide highly customized, actionable and repeatable solutions to our clients' most complex data problems." 2014 OM US Acquisition SAS Consulting Cynergy Systems (Globe Newswire, 2014) “By adding Cynergy’s leading-edge mobile and digital capabilities to KPMG’s depth in helping clients solve their biggest operational and technology challenges, we are fully prepared to help clients re-imagine how they deliver services to customers, employees and other stakeholders.”

2014 OM US Alliance SAS Consulting E2Open (Business Wire, 2014) "Teaming with E2open as part of our demand-driven supply chain service offerings will provide our clients a platform for both supply and demand-driven challenges," said John Cummings, Advisory partner and head of Strategy and Operations at KPMG.” 2014 OM US Acquisition SAS Audit BBK (Orbis, 2014) Tax “This deal enhances KPMG’s capacity to help clients navigate financial and operational challenges that continue to grow in scope, urgency and complexity.” 2014 OM US Acquisition SAS Audit St Charles Capital (M&A Navigator, 2014) Consulting “The addition of St. Charles Capital’s experienced investment banking team complements the already highly-regarded global KPMG Corporate Finance platform while also expanding our industry presence and capabilities in key dynamic sectors.” 2014 OM US Acquisition SAS Consulting Zanett Commercial Solutions (Targeted News Service, 2014) “The acquisition of Zanett furthers our mission to be the market leader in serving as a strategic advisor for clients looking to drive sustainable value across their enterprise.” 2014 OM US Partial SAS Audit Rothstein Kass (Orbis, 2014) Acquisition Tax "The enhanced team not only offers clients and prospects an unparalleled client experience, but it also extends to them an ability to leverage the expertise of the largest auditor of hedge funds. […] It demonstrates that KPMG intends to continue to invest in enhancing capabilities to service this fast-growing market and our clients.” 2014 OM US Alliance SAS Consulting Nuix (PR Newswire, 2014) “By formalizing and deepening our alliance relationship, we will create the structure necessary to drive our market efforts, better serve our clients, and launch a new chapter of growth." 2014 OM US Acquisition SAS Consulting Qubera Solutions (India Investment News, 2014) “The ability to provide leading information protection solutions such as identity and access governance, directory services, Cloud governance, authentication and authorization, and application security services supports KPMG’s mission to help clients align their risk appetite with business goals." 2014 OM US Acquisition SAS Consulting EntryPoint (WMI Company News, 2014) “The addition of EntryPoint's SAP GTS consulting and systems implementation services will strengthen KPMG's proficiency in assisting multinationals enhance their investment in global trade management systems.” 2015 OM US Alliance SAS Consulting Microsoft (ENP Newswire, 2015) “The collaboration signals an important phase in the Microsoft and KPMG relationship, driven by a shared certainty that clients are looking for business partners with solutions and services that combine the best in leading-edge technology, industry insight and innovative thinking with proven excellence in managing complex global projects. KPMG has already guided over 100 clients using Microsoft's Business Intelligence (BI), Analytics and Microsoft Dynamics products to transform their business operations.”

2015 OM US Acquisition SAS Consulting Triad Technology Partners (M&A Navigator, 2015) "The acquisition of our ServiceNow Services practice by the recognized Global Leader and #1 ServiceNow Partner, KPMG, represents an incredible opportunity for our current customers and the ServiceNow Public Sector market at large.” 2015 OM US Alliance SAS Consulting SailPoint (ENP Newswire, 2015) “By combining the power of SailPoint's innovative solutions with KPMG's strong industry experience, we believe this alliance will help accelerate the growing adoption of next-generation IAM solutions as companies face new challenges presented by expanding user populations, M&A activity and new technologies like cloud and mobile.” 2015 OM US Acquisition SAS Consulting Beacon Partners (PR Newswire, 2015) “With the purchase, KPMG will add capabilities in core provider business applications and electronic health records (EHR) systems. The deal will also bolster the company's position in the healthcare industry, which is among KPMG's strongest opportunities in the market.” 2015 OM US Acquisition SAS Consulting Ewing Bemiss&Co (M&A Navigator, 2015) “The deal is not structured as an acquisition although it is effectively one. It is expected to ensure KPMG CF's presence within the energy mergers and acquisitions sector.” 2015 OM US Partial SAS Consulting Norse (Business Wire, 2015) Acquisition “The investment will enable KPMG's member firms to offer Norse threat intelligence products and services to clients through the KPMG network's global cyber security practice.” 2015 OM US Acquisition SAS Tax G2 FinTech (WMI Company News, 2015) "This acquisition of G2's technology assets and intellectual property continues to build on our successful leadership position in the Alternative Investment space following the Rothstein Kass transaction last year. The market is demanding a web-based, integrated technology platform; by adding G2's technology, KPMG will now be able to offer hedge funds a seamless end-to-end analysis and compliance solution." 2015 OM US Alliance SAS Consulting Taulia (PR Newswire, 2015) “The alliance combines KPMG's globally recognized supply chain and procurement transformation experience with Taulia's leading suite of technology products to streamline the flow of financial information between buyers and suppliers.” 2016 OM Canada Alliance SAS Audit Vertex (ICT Monitor Worldwide, 2016) Tax “The approach to clients` global indirect tax compliance is aimed at helping reduce clients` costs and the risk of an audit, the two companies said. KPMG and Vertex said they will seek to help clients manage tax risk and exposure to audit adjustments, potential indirect tax fraud and revenue loss, and increase the effectiveness and quality of business systems that underpin the transactions that give rise to tax obligations.” 2016 OM US Alliance SAS Consulting Ivalua Project-based (PR Newswire, 2016) “Samir Khushalani, practice leader for KPMG's Procurement and Operations in the Americas, said: This alliance will help clients deliver greater value from procurement by providing a wider view into organizational spend, reducing cost and supplier risk and increasing compliance for existing

policies and procedures. With Ivalua, we're helping procurement become a nimble, informed business partner well-positioned to support strategic initiatives." 2017 OM Canada Acquisition SAS Consulting ToMont Solutions (Canada NewsWire, 2017) “This strategic transaction combines ToMont's capability in Oracle EPM implementation with KPMG's Financial Management (FM) experience in Finance transformation and Enterprise Resource Planning (ERP) implementation to better serve its clients.” 1945 EM China Greenfield MS - KPMG (n.d.) “The presence of KPMG China can be traced back to 1945. When Hong Kong was occupied in December 1941, the head office of the Hongkong and Shanghai Bank was transferred to London. Peat Marwick Mitchell & Co of London, one of the banks' auditors was asked to assist in preparing the bank's accounts. After the war, by which time Peat Marwick Mitchell & Co was co-auditor, the bank's head office returned to Hong Kong. In order to maintain staff continuity on the audit and at the request of the bank's Chief Manager (Sir Arthur Morse), Peat Marwick Mitchell & Co established a presence in Hong Kong.” 1949 EM Australia Acquisition n.f. - KPMG (n.d.) “In Australia, KPMG traces its origins to 1895 when Frederick J. Smith opened an accounting practice in Sydney. F.J. Smith’s firm became part of Peat, Marwick, Mitchell & Co in 1949, which in turn became KPMG Peat Marwick in 1990. In 1998, KPMG in Australia united its various state and regional affiliates to form a national network.” n.f. EM New n.f. n.f. - n.f. Zealand n.f. EM Singapore n.f. n.f. - n.f. n.f. EM Philippines n.f. n.f. - n.f. n.f. EM Mongolia n.f. n.f. - n.f. 2012 OM Mongolia Alliance SAS Audit NIMM Audit (Canada NewsWire, 2012) “The move demonstrates the strategic importance of Mongolia to the KPMG network, strengthening the ability to assist clients in the country’s critical growth sectors including energy and natural resources, infrastructure and financial services. NIMM brings an extraordinary depth of local knowledge, combined with KPMG’s strength across audit, tax and advisory, that’s a critical advantage in this rapidly changing market.” 2012 EM Myanmar Greenfield MS - New Myanmar Office (Canada NewsWire, 2012) "With the easing of trade sanctions, Myanmar has the potential for tremendous growth, and many multinationals and other investors are already entering the market or exploring opportunities," said Michael Andrew, Chairman, KPMG International. In addition to the in-depth local knowledge and capabilities of the new office, KPMG can support clients investing in Myanmar with extensive global resources, including specialized practices in areas such as Financial Services, Healthcare, Hospitality and Infrastructure. We look forward to contributing to Myanmar's economic resurgence and to helping clients succeed in what should be a rapidly expanding economy. […] Myanmar is

the second largest country in Southeast Asia, and literally at the center of opportunity in the region. Investors are flocking to the country and are excited about the possibilities they are finding. KPMG in Thailand is proud of the leadership role we are taking to support them." 2012 OM New Acquisition SAS Consulting Frasers (Daily Business Alerts, 2012) Zealand “KPMG office managing partner Mr Glenn Keaney says we are very complementary in many areas, people, culture, clients, and our strategy for the future.” 2012 OM China Greenfield MS Tax KPMG sets up tax advisory firm in Shanghai (China Daily European Ediciton, 2012) “The move is a sign of the potential for further investments by KPMG China in a more specialized, dedicated, focused professional tax service, according to the company's. […] Twenty years ago, KPMG became the first international accounting firm to be granted a joint venture license in China.” 2013 OM Australia Alliance SAS Consulting Coupa (Wireless New, 2013) “Coupa and KPMG Form Alliance to Expand Sourcing and Procurement Efficiency […] Our alliance with Coupa will help clients transform their procurement processes - reducing costs and adding strategic value," said Ian Hancock, KPMG Australia's head of management consulting. We can now take our procurement advice that one step further and support clients with Coupa's suite of cloud applications. Our strategic expertise together with Coupa's solutions will ultimately deliver significant value to our clients' procurement practices and pipeline.” 2013 OM New Greenfield MS Audit In Timaru (The Timaru Herald, 2013) Zealand Consulting “KPMG New Zealand chief executive Paul Herrod said the firm has entered into a strategic relationship with local accountant Ross Wells and Co. […] Senior KPMG accounting and advisory staff will be located in Timaru with KPMG seeking to further expand its footprint in the area with further partners and staff. A shift into new offices is also being planned. […] A move into regional Canterbury reflects KPMG's recognition of the contribution the area and agriculture plays in fuelling New Zealand's prosperity and complements our existing regional footprints, Mr Herrod said.” 2014 OM Australia Acquisition SAS Consulting SR7 (Orbis, 2014) “There’s been a real rise in demand from clients asking for advice and services to understand, mitigate and manage social media risk. SR7 is a pioneer in its field in Australia. Its suite of social media research, auditing, monitoring and advisory services is a seamless extension of KPMG’s offerings.” 2014 OM Australia Acquisition SAS Consulting Classig Slee (Orbis, 2014) "These acquisitions continue KPMG's investment-led growth agenda. We are aiming to significantly grow our advisory presence in the mining sector over the next 3 years, supporting growing demand as the industry adjusts to the changes in its operating environment." 2014 OM Australia Acquisition SAS Consulting Momentum Partners (Orbis, 2014) “These acquisitions continue KPMG's investment-led growth agenda. We are aiming to significantly grow our advisory presence in the mining sector over the next 3 years, supporting growing demand as the industry adjusts to the changes in its operating environment.” 2014 OM China Greenfield MS Tax KPMG Huazhen, the China unit of KPMG (China Daily European Edition, 2014)

Consulting "The firm has opened three offices within two years, which demonstrates the positive effect of the Audit localization transformation program on our business development in China. The approval for the opening of three offices by KPMG Huazhen has enabled us to take the lead in reaping the benefits of the program, said Stephen Yiu, Chairman of KPMG China. […] According to John B Veihmeyer, Global Chairman of KPMG International, China is one of the company's most vital markets in emerging economies.” 2014 OM Australia Acquisition SAS Consulting SGA Property Consultancy (Wireless News, 2014) “Professional services giant KPMG has acquired SGA Property Consultancy in an effort to provide end-to-end services in property transactions as demand grows from Asian and other offshore investors.” 2014 OM Australia Alliance SAS Consulting Artesian Venture Partners (Australian Financial Review, 2014) “Martin Sheppard, head of innovation at KPMG, said proactively engaging with Australia’s start- up ecosystem is critical to our innovation strategy. It will expose us and our clients to new growth opportunities; provide early insights into emerging and disruptive technologies, and help us and our clients stay ahead of the curve.” 2015 OM Australia Acquisition SAS Consulting First Point Global (PR Newswire Europe, 2015) "This acquisition deepens our cyber capability in Australia, and is a very smart fit for growing client needs and our firm, said KPMG Australia CEO, Gary Wingrove. KPMG is already well positioned with a strong team focused on cyber risk, protection and cyber crime investigations. Now we can offer a much deeper capability by creating one of the leading cyber security consulting groups in Australia. Dutch professional services network KPMG's KPMG Australia member firm will acquire Asia Pacific cyber security technology solutions business First Point Global as part of a global strategy to expand the firm's cyber capabilities, the firm said on Thursday.” 2015 OM Australia Alliance SAS Consulting SailPoint (ENP Newswire, 2015) “KPMG Launches Alliance With SailPoint To Help Clients Safeguard Valuable Information. […] ‘The stakes are high for organizations facing rogue threats, rising customer expectations, profitability pressures and demanding regulatory requirements,’ says Prasad Jayaraman, KPMG Advisory principal and executive sponsor of the SailPoint alliance. 'Increasingly, they are calling on firms like KPMG and SailPoint to help securely and effectively manage access across large populations of users and applications to improve identity controls and mitigate risk.'” 2015 OM Australia Acquisition SAS Consulting Advisory business of Hayes Knight (ENP Newswire, 2015) “Mr Rob Bazzani, head of Private Enterprise at KPMG Australia, said: Privately owned business is a significant and growing part of our national economy. He added: Our business is focused on supporting the growth of private, family and entrepreneurial business. And to do this, we’re building scale to support a full service offering in key geographies, including deepening our advisory capabilities. We bring the resources and insights of a top-tier firm, tailored and affordable for privately owned businesses and the mid-market sector.” 2015 OM Australia Acquisition SAS Consulting CCIWA’s migration services arm (Daily Business Alerts, 2015)

“Professional services organi[z]ation KPMG hopes to better assist companies affected by changes to foreign worker laws after acquiring the Chamber of Commerce and Industry of WA's migration services division for an undisclosed sum.” 2015 OM Australia Acquisition SAS Consulting Banarra (ENP Newswire, 2015) “KPMG Australia chief executive Mr Gary Wingrove said: “This acquisition not only broadens and enhances our portfolio of risk advisory services, but it also closely aligns our client offering with our internal corporate citizenship work, which was recently recogni[z]ed with Australia’s prestigious Human Rights Business Award.” 2015 OM New Acquisition SAS Audit Pivot (The Timaru Herald, 2015) Zealand Consulting “Tierney said KPMG and Pivot Accounting had "great synergies" and the merger represented a "big Tax commitment" to South Canterbury.” 2015 OM Australia Acquisition SAS Consulting Hands-On Management (Orbis, 2015) “Mr Gary Wingrove, said: “Today marks a further strategic step in KPMG’s growth agenda, with the added benefit of deepening our strategic alliance with Microsoft.” 2015 OM Australia Acquisition SAS Consulting Performance Clinic (Australian Financial Review, 2015) “Our real-life experience with The Performance Clinic has shown that this acquisition is about investing in people and helping them perform at their personal best.” 2016 OM Australia Acquisition SAS Consulting Markets IT (Australian Financial Review, 2016) "There has never been a greater need in the market for integrated, business-centric technology services for these clients. And effective implementation will require deep subject matter expertise in both business and technology, said Gary Wingrove, CEO of KPMG Australia.” “KPMG buys fintech firm to help lenders cope with change.” 2016 OM Australia Alliance SAS Consulting IBM (ICT Monitor Worldwide, 2016) “According to McLennan, KPMGs use of IBM Watson technology will accelerate the ability to analyse and act on core financial and operational data central to the health of organisations and the capital markets, enabling greater collaboration between humans and systems and providing the ability to communicate in natural language and analyse massive amounts of data to deliver insights more quickly.” 2016 OM Australia Greenfield MS Consulting Innovation Lab Australia (FinancialWire, 2016) “We've identified the most successful features of different innovation labs and centres across the KPMG global network to develop a unique capability [in Sydney], Craig said.” 2016 OM Australia Acquisition SAS Consulting Valclare (Orbis, 2016) “We believe Indigenous economic empowerment must be built through entrepreneurial activity and employment – and that’s exactly what you’re seeing from KPMG today. This expansion is driven by a social purpose, and very deliberately conceived to bring together Indigenous expertise with KPMG specialists to provide tangible outcomes focused on economic development.”

2016 OM Australia Partial SAS Consulting Arilla (Orbis, 2016) acquisition “This expansion is driven by a social purpose, and very deliberately conceived to bring together (49%) Indigenous expertise with KPMG specialists to provide tangible outcomes focused on economic development,' said Peter Nash, Chairman of KPMG Australia. […] KPMG Arrilla Indigenous Services will bring the full breadth of KPMG's expertise to support Indigenous businesses to thrive, grow and employ more people.” 2017 OM Australia Acquisition SAS Consulting First Point Global (ENP Newswire, 2017) “This acquisition deepens our cyber capability in Australia, and is a very smart fit for growing client needs and our firm.” 2017 OM Australia Acquisition SAS & MS Audit TRACE Chartered Accountants (The Daily Telegraph, 2017) Tax “Today’s acquisition of TRACE adds strong relationships and capability in the Nepean region. We’re delighted to welcome a highly motivated and predominantly female team, with a strong cultural fit, and complimentary business service capabilities. […] 'KPMG now has a 'three cities' presence in Sydney - Sydney CBD, Parramatta, and Penrith. Western Sydney is one of the fastest- growing regions in the country, and I'm confident this positive trend will continue, with significant infrastructure and associated investment expected through the development of Western Sydney Airport,' he added.” 2017 OM Singapore Alliance SAS Consulting Microsoft to launch joint Blockchain Nodes (ICT Monitor Worldwide, 2017) "Together with KPMG`s experience in successfully transforming business models, we are pursuing innovative applications of blockchain technology that will help our customers worldwide achieve their strategic goals.” 2017 OM Australia Acquisition SAS Consulting 3 Degrees Consulting (Orbis, 2017) “This acquisition extends our portfolio of leadership development, and performance and reward services – giving us additional depth to address a much broader range of key board issues,”