The Case Study of Morgan Stanley’s Return on System Non-investment
John Mack is still the CEO at Morgan Stanley. In 2005 he focused on management and organisation changes to restore revenue and profit growth within the company. Describe the strategy he outlined to the organisation and discuss its effects to date (including cultural effects, if any).
John Mack needed to address the issue of a “one-firm culture”, stem the tide of departing productive brokers, improve technology and information integration, and improve profits (Laudon and Laudon, 2006).
The “one-firm culture” needed to unify Institutional Securities, Asset management, Retail Brokerage and Discover Card services. The synthesis of Morgan Stanley (SM) and Dean Witter needed to overcome the perception that former Dean Witter employees were second class compared to former Morgan Stanley employees. To do this Mack first tackled the technological divide to remove the disparity and integrate the different systems. To boost the one-firm culture “Mack altered the firm's compensation scheme in favor of an equity ownership structure” (Cullen, 2003). Mack himself receives over half of his $1.6+ million salary in equity (Forbes , 2007). To reduce the me-only culture Mach also holds people accountable, removes intransigent unproductive employees, empowers young people and encourages risk (Cullen, 2003). In 2007 Mack spun off Discover Card services in accordance with Purcell’s 2005 plan (Morgan Stanley, 2005). Mack’s risk taking rewarded the company with huge profits from sub-prime investments in 2006, with Mack pocketing $40 million in bonuses. Mack did not return those bonuses in 2007 when subprime losses of $11 billion hit SM (Colarusso, 2008). Zoe Cruz took the fall (Barn...
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The purpose of this paper is to provide a summary of the article called “Can We Keep Our Promises?” by Robert D. Arnott, and to help better understand the three key risks facing each investor.
Prior to Fuller’s transfer, management at the Carson’s location was poorly run using the classical approach. While this approach can be successful, management has to find a good middle ground between caring for the company and caring about their employees. A traditional classical approach recognizes that there are five important factors to running a successful business (Miller, 19). According to text, these factors are planning, organizing, command, coordination and control (Miller, 19-20). These factors can be seen when you look at Third Bank as a whole. In the study, the CEO saw the issues in his company and put a plan together to improve. He had meetings with management, like fuller, to organize a solution. He then commanded all locations
Mackey also wants employees that have a high degree of ingenuity and creativity. The next great idea will not come from a board meeting but often come from those that work directly in the field. Essentially he wants to make use of everything the employee has to offer.
Furthermore, he engaged the customer with an optimistic attitude and stated how the stock could affect him or her in the best way possible. Jordan could immediately hook any client into believing what he had to offer by providing the customer with the success stories others have had under his instruction.... ... middle of paper ... ... Works Cited Belfort, Jordan. The Wolf of Wall Street.
Rousmaniere, Peter. “Facing a tough situation.” Risk & Insurance 17.7 (June 2006): 24-25. Expanded Academic ASAP. Web. 23 March 2011.
Miss Ford is a portfolio manager for Northpoint Group, a mutual-fund management firm. Kimi is considering buying shares of Nike Inc. for the NorthPoint Large-Cap Fund she is managing. A week before starting the research, Nike had presented the fiscal year 2001 results in an analysts meeting. Main purpose of this meeting was to communicate the new strategy to revitalize the company. Nike had seen her revenue stream stagnating since 1997 to a level of $9.0 billion. Within this time period, net income had been decreasing with $220 million to $580 million in 2001.
Corning shifted their focus from a domestic and exporting company to a multinational manufacturing company. The lack of specialization and ambiguous leadership imposed by the Houghton family faced the problem of a required organizational structure change. However, changing the corporate structure while imposed by these demands led to an inefficient structure hybrid structure that refuses to give specialized responsibilities to MacAvoy as a Chief Operating Officer, as he has to not only watching over operations globally, but is solely in charge of the North American market, creating an inefficiency with the Chief International Officer.
Not all strategies “fit” within the companies activities, some are hit and misses such as when Stewart placed Charles Koppelman to the board, where “he became chairman of the board in 2005, where he negotiated a paid consulting arrangement for himself. He was viewed as enabling Stewart’s self-regard as much as tending to th...
General Electric Corporation is a multi-billion dollar conglomerate founded in 1892. The company was founded in Schenectady, New York to capitalize on the patents of Thomas Edison and the use of electric power through generation and distribution. Now a blue chip publicly traded company that has branched out beyond its core into arenas such as aircraft engineering, television, and home appliances to name a few. Over the years the corporation has been through different management models that have brought innovation in many forms that have allowed them to be envied by companies around the world. Despite great success since its conception, like many companies who can withstand the test of times, it’s natural for them to become self-absorbed, which can have a negative impact on the company structure as a whole. Coming across someone like Jack Welch who can think out of the box and in a manner that doesn’t strain the resources of the company but expands the thinking of the company as a collective unit is needed to continue the legacy of innovation in all aspects of business.
Jim Collins and his research team have done a wonderful job identifying what it takes for a company to go from good to great. I found this book to be extremely interesting and would like to share several of my thoughts.
William Sharpe, Gordon J. Alexander, Jeffrey W Bailey. Investments. Prentice Hall; 6 edition, October 20, 1998
Artemis. "Alternative Capital the Biggest Challenge for Traditional Reinsurers: Moody’s."Www.artemis.bm. Artemis, 5 Sept. 2013. Web. 09 Nov. 2013. .
During the year 2005, Ford Motor Company brought in Alan Mulally, once a leader at the company Boeing. Mulally decided to implement a strategy called ‘One Ford’; this plan would ultimately lead to the employees becoming one team, using one plan, and looking towards one goal. Because this plan was going to execute a complete overhaul on the company, an aggressive training program needed to be put into place for the company to implement the plan correctly. By following this plan, the company would eventually meet their “One Goal”, which was profitable growth for all. By creating a strong product and producing customer loyalty, Alan Mulally knew the company would begin to see positive results and profitable growth. According to Alex Ta...
Palvia P., Palvia S. & E. Roche (1996) Global Information Technology and Systems Management. Ivy League Publishing