Rob Parson Case Study
1 Case Overview
The internal environment at Morgan Stanley was one of teamwork, employee development, dignity and respect. Morgan Stanley had developed a way of building consensus rather that individualism. Rob Parson was thrust into this environment – not sure of what was expected of him and with only one objective in mind – improving the performance of the Capital Markets division. He went about doing this ruthlessly without much care about the organization and its existing practices. While his performance was stellar, he developed a hostile environment around him. On joining there was a tacit agreement with him and his boss that he would be given the position of Managing Director, something that didn’t happen because of his poor inter – personal skills. After two years, he demands the position of Managing Director in return for his stellar performance. It is now up to Gary Stuart, his boss to decide whether to promote him or not. In the pages that follow we take up the role of Gary Stuart and suggest possible solutions to help put an end to this dilemma. 2 Strategy Or Culture?
The decision, whether to promote Rob Parson to the position of Managing Director or not, ultimately boils down to a single question: What is more important to Morgan Stanley: the firm’s culture or the performance of its divisions? Morgan Stanley’s mission statement clearly states that they “aim to be the world’s best investment bank” and that “they have a commitment to add maximum value which will be characterized by extraordinary effort and innovation”. They aim to “distinguish themselves by creating an environment that fosters teamwork and innovation”. Our interpretation of this statement is that, the focus/strategy is on growth by innovation and providing exceptional customer satisfaction while developing an atmosphere of teamwork and collaboration. We believe that it is the firm’s strategy that dictates its culture and not the other way round. To quote Charles O’Reilly , “once established, a firms strategy dictates a set of critical tasks …achieved through a congruence among the elements of people, structure and culture”. 3 Hire or Fire?
Rob Parson, from what we gather was a person who excelled at providing exceptional customer satisfaction, put in extraordinary effort and often came up with the most innovative financial products to match the needs of his client. True, he wasn’t much of a team player, but then most people in that division of Morgan Stanley wasn’t the most innovative or hard working people either. If that were the case then they wouldn’t need the services of Rob Parson. Not giving him the promotion would not be fair to him. If we were to evaluate this case on the basis of fairness alone, we strongly believe that Rob Parson should be promoted to the position of Managing Director. If not, there is every reason to believe that he will leave Morgan Stanley for a lack of job satisfaction. To quote Dennis W. Organ, “When people answer questions about job satisfaction, they think about fairness. They compare what they might have reasonably expected and what they actually did experience.” It was reasonable for Parson to expect a promotion for his stellar results. We do understand however that promoting him could lead to problems - it could lead others in the organization to believe that performance is the sole criterion for promotion and result in a loss of faith in the 360 degree feedback system. However, we also believe that promoting him is of strategic value to the company. Having him as the Managing Director can lead to the diffusion of capabilities within the team i.e. his expertise will filter down to the rest of his team improving their productivity. In order to do this however, it is imperative therefore that he also earn the respect and willingness of his team. But where does one start? We chose to use the expectancy theory , explained in the diagram below, to...