Nomura Lehman Acquisition

Topics: Risk, Lehman Brothers, Richard S. Fuld, Jr. Pages: 3 (904 words) Published: January 16, 2013
By acquiring Lehman Brothers, Nomura would be bringing onboard some of the brightest bankers in the industry, along with the administrative and technological setup supporting them. But the acquisition also meant that Nomura would be potentially increasing its headcount by almost 8000 employees over Europe and Asia. And these employees would be coming from an organization with a culture very different from Nomura’s existing culture. There was a formidable set of challenges, and Nomura ran into trouble from the onset. Nomura set up transition teams across the overseas offices to integrate the new employees into Nomura’s culture. However, episodes of culture shock were quickly reported by the media: Teams of Nomura traders singing company songs each morning to kick off the day; the unilateral decision by the Nomura HR department to change former Lehman female employees’ e-mail addresses to their married names without asking which they used professionally; the new employees training session where the women were taught how to wear their hair and serve tea, just to name a few. While, most of these clashes could be attributed to the East-West culture divide, the more fundamental issues stemmed from differences in corporate culture. To a large extent, the culture at Lehman was an embodiment of the personality of its former CEO, Richard Fuld. The employees at Lehman were trained to be bold and aggressive. They were used to a culture of high risk tolerance, frequent use of leverage, and swift decision making. Nomura’s corporate personality, on the other hand, was more hierarchical, conservative, and favored more stable revenues based on moderate levels or risk taking. Differences were also common when it came to client prioritization. While the Lehman bankers based their priorities on fee generation capability of the client, Nomura tended to place more weight on factors such as loyalty and length of relationship. Considering these issues, the challenge before Nomura was...
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