Organizational Power and Influence
Lehman Case Analysis
Lewis Glucksman who scrapped his way up through Lehman's unprestigious but increasingly profitable stock-and bond trading department, was able to take control of the firm after a bitter power struggle against its former CEO, Peter Peterson. Glucksman was victorious in the end as he proved himself to be an indispensible part of Lehman’s operations.
During the times leading up to the power struggle, the power dynamic within Lehman was steadily shifting as trading profits became increasingly more important to Lehman versus traditional investment banking profits. Thus, Glucksman was able to step into the spot light and Peterson became more expendable. Peter Peterson’s core strength at the time came from his relationships with investors, however, this appeared to be less and less important as Lehman’s core profit driver shifted from investment banking to trading. As a trader, Glucksman amassed a great deal of power through his rise at Lehman and was eventually he able to take over the company’s day-to-day operations. Every department reported directly to Glucksman, as Peterson became more or less of a figurehead in the company.
Since Glucksman had significantly more power at Lehman Brother’s than Peterson, he was able to push Peterson into retirement. Glucksman knew that Peterson did not really want to get into a major fight for control over Lehman’s since it would hurt Lehman’s and potentially his public image. Additionally, Peterson could not run the company without Glucksman since it would require him to start running the company’s day to day operations again. Due to the leverage that Glucksman had over Peterson, he was able to force him into taking an early retirement package without consulting the board of directors.
Various structural features of the company and the industry contributed to the outcome of the Lehman power struggle. Unique to Lehman at the time was its power duality....
Please join StudyMode to read the full document