...Strategic Intent The time John Mack took over the leadership of Morgan Stanley the culture was riddled with tension and starting to affect the firm’s performance. The firm’s divisions operated independently and there was internal conflict between business units, with each focusing on their sole profit maximization & loss limitations. Concurrently, even as Morgan Stanley was expanding its operations globally, the firm’s performance dropped due to delayed decision making and bitter battles over resources. Morgan Stanley was lacking from strong divisional focus, lack of future leaders, and poor career development & haphazard performance evaluation which resulted in employee dissatisfaction with promotion procedures and compensation schemes. John Mack’s vision and goal for the firm was to become a “one-firm firm”. Mack wanted to change the culture and values at Morgan Stanley, in order to attract and retain top talent. He recognized the fact that Morgan Stanley’s competitive advantage is its people, and was willing to implement changes in order to develop and retain their best employees. Along with Tom DeLong, the newly appointed Chief Development Officer, they started implementing a new 360o performance evaluation system which was critical to achieving their goal. The new 360o performance evaluation system The new performance evaluation system was critical to implementing the new culture and values in the firm as it brought in a new set of criteria & objectivity into...
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...Morgan Stanley’s Return on System Noninvestment Case Study Summary Morgan Stanley was established in 1935, and in 1997 merged with retail brokerage firm Dean Witter Discover and Co. to become a global financial services organization that employed more than 53,000 people in over 600 countries including Australia. Institutional Securities, Asset Management, Retail Brokerage and Discover were the four segments of Morgan Stanley. The merger altered the working environment of Morgan Stanley and created a divide in employee acceptance of the Retail Brokerage segment. It did not integrate well with the firm partly due to the information systems being different to the rest of the company. Under CEO Philip Purcell’s management, Morgan Stanley’s infrastructure and systems did not grow with the needs of employees and customers, nor did it apply future technologies to their current systems, its focus was reducing overheads to maximize profits in the short term. Many brokers resigned, taking with them valuable portfolios and profits. In June 2005 Purcell resigned, and John Mack provided new leadership. The firm then began to change its information systems and provide better services for clients, which saw stronger ethos and integrity within the employees. The new leadership at Morgan Stanley instigated change, and the realization that the Company must grow to keep up with the competition in the financial services industry. Not only did technology need overhauling within all the...
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...A Morgan Stanley Case Study Operating Globally Through Technology Course: MGMT420 STRATEGIC MODELING Crn: 29022 Group Members: Nicole Blenman Mark Hamel-Smith Allison Joseph Cynthia Kennedy Kelly Singh Lecturer: Ms. Kinda McGowan April 18, 2015 Introduction Morgan Stanley was founded as an investment bank in New York in 1935, it has evolved into one of the world’s foremost financial institutions, with more than 45,000 employees on six continents. Though headquartered in the U.S., they are a leader in the integration of financial services around the world. As technology links them closer together the firm is in a unique position to address the increasingly global needs of their clients. Morgan Stanley mobilizes capital to help governments, corporations, institutions and individuals around the world achieve their financial goals. ▪ As a global bank it provides: Investment banking advice on mergers and acquisitions, financial restructuring and privatisation. ▪ Major underwriter of stocks and bonds and provides research, sales and trading services in almost every type of financial instrument. ▪ Manages private partnerships that invest in venture capital, property and other private equity opportunities. ▪ Provides other related products and financial services, including credit cards. At its foundation are four core values — putting clients first...
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...Morgan Stanley, founded in 1935, grew over the course of its first 55 years in business to become one of the largest investment banks in the world. With over $3 billion in revenue and 7,000 employees spread across 18 global locations, the firm was a powerhouse in the global financial industry. A job at Morgan Stanley was one of the most recognized resume builders and after spending a few years of one’s career at the firm, the opportunities available were often endless. However, in the early 90’s Morgan Stanley found itself stuck in a corporate culture stemming back to the 40’s and 50’s, with a narrow development program that revolved around an employee’s ability to add to the top and bottom line. Bring in the revenue, and life was good. Consistently fail to show numbers, and start packing your things. In 1992 management began to take a critical look at the current performance appraisal system. As competing firms in addition to the general business environment progressing with development and training programs, it was obvious to high-level executives at Morgan Stanley that the firm was lagging behind in its ability to develop talent sustainably. Numbers were growing, but the firm was missing out on numerous opportunities and even jeopardizing its future by not giving its employees the opportunities and treatment they sought. The current appraisal system was dealt with in an open forum, with groups coming together as a team and orally presenting their opinions on newer employees...
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...Introduction Morgan Staley was founded in 1935, by Henry S. Morgan and Harold Stanley. Today Morgan Stanley is one of the world's top financial services companies and a leader in investment banking, private wealth management, bonds and stock trading. In 1993 a new president was named in Morgan Stanly, John Mack. He had a vision of transforming Morgan Stanly into a “One-FirmFirm”. From this vision came out the firm’s mission statement, Our goal is to be the world’s best investment bank and the Firm of choice for our clients, our people, our shareholders. Another important innovation in Morgan Stanly brought by John Mack was the 360-degree performance evaluation process. He wanted to create a team of people inside the Firm who would “Shake up the culture”. One of his most important recruits was Paul Nasr, very highly regarded baker, with more than 20 years of experience. He was placed to be senior manager to a newly created Capital Market Services department. Nasr has already experience with this kind of services, and Morgan Stanley was lacking behind other similar competitor banks. After acquiring the job, John Mack started creating his team for increasing the market share of Stanley Morgan which obviously was a major goal for the firm. To achieve that goal, he needed energetic, aggressive and employees who are not afraid to pursuit customers and develop a long term relationship with them. With clearly set attributes for the job position, he recruited Rob Parsons, a young...
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...Rob Parson at Morgan Stanley Rob Parson was a market coverage professional in the Capital Markets division. He had been hired by Paul Nasr and had generated substantial revenues since joining the firm. Unfortunately, Parson's reviews from the 360º feedback said that he was having difficulty adapting to the firm's culture. So Nasr faces the difficult decision to promote Parson to Managing Director. Nasr must complete Parson's performance evaluation summary and conduct Parson's performance review. Question 1 What are the advantages and disadvantages of the 360º feedback system at Morgan Stanley? When John Mack became President of Morgan Stanley in 1993, he brought a new vision to the bank named “One-Firm Firm”. That vision focused on performance which can be translated in creating value for the clients, the employees and the shareholders. Mack thought that could only be achieved through a culture that promoted teamwork and innovation and never sacrificed the firm’s integrity. The 360º performance evaluation process was brought by Mack to Morgan Stanley with the intention to “encourage employees to conform to a new way of doing business that emphasized team-work, cooperation, and cross-selling”. It also intended to “provide comprehensive development feedback so that employees could continue to improve their skills in four areas: Market/Professional skills, Management and Leadership effectiveness; commercial Orientation; and Teamwork/One Firm Contribution”. These...
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...the public, are at high risk for being cheated. Finance workers are entitled to reasonable fees for their services, but they are not entitled to engage in investment activity solely to generate more commissions for self, or engage in any other self-dealing while they are doing their jobs on behalf of their clients. Given the many scandals of recent years, many companies have done their best to publicize their codes of ethics, and to acknowledge their responsibility to the public. These firms know that public confidence in their finance people matters a great deal, and unethical behavior on the part of a firm means that people will stay away from that firm, and they may stay away from all the others as well. That is why ethics are not merely relevant. On the contrary, they're vital to the existence of the industry. Good ethical behavior is not an optional. While researching the ethical behavior of the top investment banks worldwide, (Goldman Sachs & Co, J.P. Morgan Chase, Morgan Stanley, Credit Suisse, Bank of America / Merrill Lynch, Deutsche Bank) there seem to be a constant theme. All of the top investment banks have some type of ethical violation that has resulted in some monetary amount been paid by the bank. Does this mean the investment banking industry culture as a whole practice...
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...Morgan Stanley: Becoming a “One-Firm Firm” Time: Summer 1993 Scenario: John Mack has recently been appointed president of Morgan Stanley (MS). His primary goal is to recapture the “value of the franchise.” History of Morgan Stanley • Firm founded in 1935 when, in the wake of the Banking Act of 1933 (Glass-Steagall) requiring banks to separate commercial and investment-banking activities, six partners of J.P. Morgan left to form Morgan Stanley & Co. • In 1971, MS launched a sales and trading operation, a dramatic change from its exclusive focus on corporate finance to that point. The firm was very successful in this effort, dominating the sales and trading rankings for a decade. • In mid-1970s, MS began expanding internationally, before most other firms were acting on the potential of the global market. • By 1977, MS had over 1,000 employees, more than 4 times as many as in 1970. • While the firm had been one of the most prestigious banks on Wall Street and had developed exclusive relationships with many Fortune 500 companies, by the early 1980s the firm had started to rest on its laurels as many of its competitors were on the rise. • In the 1980s, corporations began to move from single long-term banking relationships to long-term transaction-based relationships predicated on receiving a variety of services. MS stumbled during this time, falling to sixth in global underwriting in 1983. • During this time, MS established merchant banking and asset management...
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...INFO3110 Management Meeting 1 Notes Morgan Stanley’s Return on System Noninvestment CASE STUDY 1. Why did Morgan Stanley underinvest in information technology? The CEO at Morgan Stanley clearly miscalculated the market. Purcell felt that the rebound of the economy would be slow following the stock market crash in 2001. In order to survive, he felt that the company needed to concentrate on maximizing profits instead of generating revenue. Given this strategy, he cut costs, jobs, and investments in areas such as information technology. It is also possible at the startup of the company in 1935 or thereafter there was not an importance given to IT development; this culture might have persisted or simply a refelection of management’s perspective as to the need of information technology. 2. Why was the merger with Dean Witter disruptive for the company? Morgan Stanley operates in four segments: Industrial Securities, Asset Management, Retail Brokerage, and Discover (formerly Dean Witter). Despite the merger, the Retail Brokerage group was never accepted as an equal partner by the rest of Morgan Stanley. This was clearly an employee integration problem either because of the employees’ perception or their reality. This division was also not well-integrated with the rest of the company. Former Dean Witter employees claimed that they felt like disrespected outsiders after the merger. The unification of Morgan Stanley and Dean Witter created a digital, cultural, and philosophical...
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...Developing and Managing Others Learning how to attract and retain the best people POST-COURSE ASSIGNMENT 2016 Part A. Morgan Stanley Case 3 My assessment of the new performance evaluation process 3 Did the new system meet expectations and targets? 4 Critical factors that contributed to the successful implementation of the system at Morgan Stanley 5 Part B. My personal development plan 5 Part C. Two people management examples using the SARL form 9 First example 9 Second example 10 Part A. Morgan Stanley Case Morgan Stanley is an American multinational financial services corporation. The corporation, formed by partners Henry S. Morgan, Harold Stanley and others, was founded in 1935. In 1993 the company headed by John Mack turned into a “one-firm firm.” At the beginning of 1990s, amid its rapid growth the company was facing a problem of choosing future leaders capable of effective management. Throughout its history, Morgan Stanley had formal performance evaluation and career growth systems. Each year the company was recruiting fresh blood from top universities who had “raw intellect and some basic social skill” and who shared the company’s values. The atmosphere within the company contributed to career development and growth. At the same time, the company itself didn’t monitor individual results or career growth of its employees on a regular basis. Performance evaluation was based on “up-or-out” principle. Managers didn’t pay enough attention...
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...Morgan Stanley Case Study 1 “Morgan Stanley Case Study” Total Rewards Dr. Judie Bucholz Strayer University Robyn L. Snow April 29, 2012 Morgan Stanley Case Study 2 Abstract Morgan Stanley was established by J.P. Morgan Jr in 1935 in New York. Before 1935, Morgan Stanley was only an investment department in J.P. Morgan group. Since its inception in 1935, Morgan Stanley has been a leader in investment management. The company provides a wide range of financial services for individuals and institutional investors. Morgan Stanley investment advisors educate clients at all stages of life in the benefits and risks of investing in mutual funds, stock, and bonds. Working with clients, they help to determine investment strategies based on goals and objectives, the time...
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...1.Evaluate the effectiveness of the Morgan Stanley performance assessment and mgmt system. The strategic goal at Morgan Stanley is to transform the company’s work environment into one that promotes teamwork, innovation and absolute integrity. In order to achieve this goal, President John Mack and his executive team recognized that a culture change in the way staff were evaluated and compensated would be necessary. They instituted a 360-degree performance evaluation system two years ago allowing professionals in the firm to be evaluated by superiors, subordinates and peers. According to the textbook, the advantages of such a system are numerous when compared to traditional assessment systems. The authors state that “supervisors, peers, subordinates and employees themselves differ in their ability to appraise various dimensions of performance” and that “these raters observe different behaviors and may interpret them with divergent standards.” Therefore, the purpose of 360-degree feedback is to give staff a better understanding of their strengths and weaknesses which, in turn, allows them to better identify aspects of their work needing professional development. The fact that Morgan Stanley introduced a 360-degree performance assessment tool is commendable. However, the effectiveness of this tool in its current state has not yet been optimized. In particular, the company’s vision statement appears to be very solid as it clearly articulates how employee abilities should...
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...DATE OF SUBMISSION 4/9/2012 | [Type the company name] | ROB PARSON AT MORGAN STANLEY | WAC ASSIGNMENT 2 | SUBMITTED TO – PROF DANESH GOJER SUBMITTED BY – DHAIVAT NANDA (65936) YASH PAREKH (60489) LETTER OF TRANSMITTAL To, Paul Nasr, Senior Managing Director, Morgan Stanley. Subject- Report on decision concerning Rob Parson's promotion according to the performance evaluation. Herewith enclosed is a report on the decision to be taken whether to promote Rob Parson. The decision is based on the performance evaluation of Rob Parson and effects it would have on the organisation. I have addressed all the potential problems followed by the recommendation based on the evaluation of the options. The report is submitted for your consideration and necessary action. Regards, Andrew Felton, Management trainee. Executive Summary The internal environment at Morgan Stanley is one of teamwork, employee development, dignity and respect. Rob Parson's external performance has been noticeable. The rate at which he has been getting business for the firm is avid by the fact that his efforts were instrumental in helping this company reach from the 10th position...
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...Situation Analysis: This is a case of a young banker by the name Rob Parson who had just joined Morgan Stanley. Parson who was a managing director of a small firm is having difficulty adjusting to the culture of a large financial firm like Morgan Stanley. Key Issues Analysis: 1) Adopting the Company Culture: Rob Parson who is new to Morgan Stanley was unable to adapt to the firm’s culture which fosters integrity, teamwork, innovation, dignity and respect. Despite being one the firm’s division’s star performers and an outstanding producer, Parson was seen as sharp-tongued, impatient and often difficult to work with. His team player skills’ rating was low. He was perceived as occasionally aggressive, temperamental, lacked respect and possesses traits that did not fit the profile of a Morgan Stanley’s managing director. 2) 360 Degree Performance Evaluation: No doubt the 360 degrees evaluation is a valuable tool to help employees improve their performance however due to its limitations it may not be as effective when it comes to decide on employees’ promotion. Morgan Stanley’s 360 degree performance evaluation did not include clients’ valuation, developmental opportunities such as coaching and training. Furthermore, there were no performance standards that measured the individual in comparison to the performance of the group and it failed to take into consideration job functions, performance standards and departmental goals. Recommendation: Rob Parson may not be ready...
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...All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of Oxford University Press. Library of Congress Cataloging-in-Publication Data is available ISBN-13: 978-0-19-530792-4 ISBN-10: 0-19-530792-5 1 3 5 7 9 8 6 4 2 Printed in the United States of America on acid-free paper For Chaille Bianca and Vivienne Lael and William Grant who says he wants to be an investment banker ACKNOWLEDGEMENTS As a f i r s t - t i m e au t h o r , I have many people to thank. Luckily for the reader, most of them are current and former employees of Goldman Sachs and Morgan Stanley who would prefer not to be cited. Their support and insight were invaluable to this enterprise. For early encouragement and guidance I must also thank Clare Reihill at Harper Collins, Brian Kempner and Peter Kaplan at the New York Observer, L. Gordon Crovitz...
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