Pressure on the Price Waterhouse Partnership: Decisions of the 1960s and Implications for Today

Accountants are often in the news in the 1990s, as mergers between giant partnerships and million-dollar judgments against big finns fill the headlines of the business press. Despite widespread media attention, relatively little is known about the historical development of these large professional service organizations. A study of one such partnership, one hundred year old Price Waterhouse (PW), shows that some challenges facing the finn in the 1990s can be traced to business decisions made almost three decades ago. Perhaps the biggest imperative of the 1960s was growth--for American business as a whole, for the accounting profession, and for PW. Despite these pressures, the partnership made a deliberate decision not to grow for growth's sake but to focus on what it had always done best and to concentrate on providing service of the highest quality. This choice was grounded as much in the unusual nature of its partnership and the strength of its self-image, as in economic or competitive considerations. In fact, PW's unquestioned professional leadership and superb client list insulated it from any real need to develop a competitive strategy and encouraged an inward-directed focus that would cost the finn dearly in terms of future personnel resources.