The worse the economic news gets, the more pundits there appear to be, emerging out of the woodwork, either to offer an opinion as to how deep the recession is going to get, and how long it is going to last - or offering a solution as to what businesses need to do to survive the downturn.
One such piece of advice came recently from a very august body, the Institute of Certified Public Accountants of Singapore (ICPAS). They released a statement urging small and medium sized accounting firms to merge their practices so that they could 'strengthen their resources' and 'compete better and attain global reach'.
I'm not quite sure who within the ICPAS issued that particular press release - but I can't help thinking that news must have been rather thin that week. Either that, or everyone at the ICPAS was so busy that they didn't have time to consult with anyone in practice who has either contemplated or been through a merger.
It should be very clear to anyone who observes the profession in the way in which one would hope that issuers of press releases on behalf of the ICPAS should do, that mergers are fraught with dangers, seldom go through without significant casualties, and where they are successful, it it almost always as a result of careful planning and preparation over a period of months.
I can see what they ICPAS are trying to suggest - I just think they are being blinkered in their approach and naively optimistic in terms of their expected outcomes. WIll the merger of two small Singapore firms enable the merged entity to 'attain global reach'? I don't think so.
The evidence that we have within MSI Global Alliance (www.msiglobal.org) suggests that many mid-sized entrepreneurial firms are recognising that the current downturn is presenting them with real opportunities as clients of Big 4 firms are looking to cut costs, whilst still maintaining service levels. Such firms are not looking to merge locally. Rather, they are looking to join a global association like ours.
Applications for membership have never been stronger. Relatively few of the applicants meet the entry criteria, or we may already have members in those territories, but there is certainly a recognition of the best way to capitalise on the opportunities presented by the current climate.
James Mendelssohn (jmendelssohn@msiglobal.org)
www.msiglobal.org
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