Applying the Four Frames to a Situation

Only available on StudyMode
  • Topic: Harvard University, Investment, Financial endowment
  • Pages : 5 (1593 words )
  • Download(s) : 539
  • Published : August 4, 2012
Open Document
Text Preview
A1: Applying the Four Frames to a Situation

As a consultant of the Harvard Board of Directors, the lack of not having any defined rules and regulations for what may or may not be acceptable compensation for the money managers employed by Harvard Management Company, which shall be referred to as HMC going forward, when it comes to investing Harvard’s $19 billion endowment has been identified as an issue of strong concern. In order for there to be pure objectivity in this task, an application of the four-frame model (i.e. structural, human resources, political and symbolic) according to Bolman and Deal (Bolman, 2008) has been used to provide positive feedback to the Harvard Board of Directors as a management tool in order to best assist with finding the most effective solutions to resolving the stated issue in regards to the compensation of individual managers employed by HMC in an effort to most effectively satisfy the needs and emotions of all parties of involved (i.e. Harvard, HMC and fellow alumni). Structural Frame

Harvard acquired the services of HMC to invest its $19 billion endowment. Harvard did not provide HMC with any expectations or procedures on how this endowment should be invested in order to best benefit the university and students. Harvard did not specify to HMC who would be making money off of the results achieved when the endowment was invested. Harvard did not establish any guidelines with HMC as to how much the university was willing to compensate the money managers for their investment services without jeopardizing the values of the university. HMC adhered to the instructions of Harvard in investing the $19 billion endowment. HMC did not provide Harvard with any information on how it would go about investing the endowment. HMC did not provide any rationale on how the salary and bonus would be calculated for each money manager assigned to the project of investing the $19 billion endowment. Human Resources Frame

In an effort to encourage commitment and satisfaction amongst the organization, Harvard made the executive decision to acquire the services of HMC, a subsidiary of the university, to invest its $19 billion endowment rather than hiring external money managers “who would have, according to Mr. Jack R. Meyer, president of HMC, cost Harvard roughly twice as much in fees” (Nevala, in class handout). In making this decision, Harvard demonstrated as an organization how it was important to take into consideration the skills of its employees whether internal or external. This demonstration in the value of its employees empowered the employees of HMC to produce the most effective product possible. Despite Harvard’s efforts to build and strengthen its relationship with HMC, the issue of compensation placed a great strain on its relationship with fellow alumnus William Strauss. Although Harvard did provide details when making an attempt to effectively communicate with Mr. Strauss about how HMC’s board planned some changes in its compensation policies that would impact the maximum annual pay of individual managers by releasing its financial information earlier than May, it still failed to engaged Mr. Strauss to make him feel that his voice that represented alumni, current students as well as future students (Nevala, in class handout). Harvard’s decision to ignore the request of Mr. Strauss and fellow critics for a public forum to discuss the issue of compensation by following up with a response in the form of a written letter demonstrated the lack of satisfying Mr. Strauss’ need to feel belongingness and hindered the self-actualization to develop for current students as well as future students. This issue was continuously displayed throughout Harvard’s interaction with Mr. Strauss by Mr. Lawrence H. Summers, the president of Harvard, not making any attempts to respond to the letter that was written by Mr. Strauss and his classmates that provided a suggested solution that would return the...
tracking img