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Case Analysis on

Rob Parson at Morgan Stanley (A)

Submitted by
Group 10
Shikhar Bhardwaj (P16009)
C Manjunath (P16011)
Ketan Nalamwar (P16036)
Mainak Pradhan (P16042)
Dhruvkumar Sonagara (P16052)

Letter of transmittal

To,
Paul Nasr
Senior Managing Director
Morgan Stanley
July 29, 1998

Subject: Report on decision regarding Rob Parsons promotion


Dear Mr. Nasr,
Attached herewith is the report that evaluates the options of recommending
and not recommending Rob Parsons promotion to Managing Director in Capital
Market Services (CMS) division of Morgan Stanley. It also evaluates the possible
outcomes of the decision taken by the firm.
Thank you.
Yours sincerely,
Dhruv Sonagara,
Executive Assistant.

Executive Summary
The question of whether to recommend Rob Parson for promotion has been analysed in this
report based on the repercussions of the decision on the revenues and the culture of Morgan
Stanley. While on the one hand, Rob Parson has been instrumental in bringing in revenues for
Morgan Stanley and increasing their market share, on the other, the financial success that he
has been responsible for has been at a perceived cost to the collaborative culture and ethos
that Morgan Stanley prides itself for.
Recommendation: After evaluating the options available, it is recommended to decline the
promotion.

Table of Contents
Letter of transmittal

Executive Summary

Situation Analysis

Problem Statement

Options

Criteria for evaluation

Evaluation of options

Recommendation

Action Plan

SITUATION ANALYSIS
The Capital Markets Services (CMS) division of Morgan Stanley (MS) was created with an
eye on facilitating cross-divisional collaboration. Thus, their work entailed not just working
with the clients and as a result, a good at understanding of the markets and market judgement,
but also working with product specialists to design and deliver financial products to meet the
clients needs. Historically, Morgan Stanley has not had a prominent presence in CMS, but it
could not have avoided it for long since it made up 30% of the market.
Owing to the competitive nature of the financial services industry, the ability to generate
business opportunities largely depends on the skills of the professionals employed. It was in
this context that Rob Parson was recruited as a market convergence professional in the CMS
division which focussed on primarily on serving financial institutions. In a market which is
characterised by business clients wanting immediate and profitable solutions, MS attempted
to put in place a consensus based mechanism which projects and promotes the firm as the
business facilitator rather than the individual professional. Such a workplace philosophy
requires that the professional not only possess the requisite knowledge about the business but
also have the willingness to imbibe the MS culture of collaborative working.
The job requirements for Rob Parson were challenging and involved helping resurrect the
capital markets business for MS. Within the CMS division, the job required the ability to
create business possibilities for MS along with servicing clients with sensitivity. Parson,
despite his unconventional career progression, has performed exceedingly well and this is
reflected in MS rising from the 12th to 3rd rank in offering services to financial institutions
within the span of a year. He was acknowledged for the equation he developed with the
clients and selling financial products, but this praise has come at the cost of companys
culture and its way of working, which has led to terms like volatile and abrasive being
used by his colleagues to describe him. Parson is a key component of the CMS division and
has been instrumental in increasing Morgan Stanleys market share because he possesses the
personality for the job, i.e., he is aggressive and competitive. His ability to cross sell has also
resulted in 10 new clients for Morgan Stanley. All this holds him in good stead in case he is
put up for promotion, which he was implicitly promised at the time of his joining.
However, this financial success for MS appears to have come at the cost of the ethos of the
place. As a result, Parson despite performing exceedingly well and bringing in the revenues is
not meeting the requirements which the 360-degree performance evaluation process has put
in place. Although, he is good in interfacing with the clients, he is not so while dealing with
the sub-ordinates. Thus, he does meet the requirements of Teamwork/One firm contribution
and Management and Leadership effectiveness. This situation seems to be a case of a
professional performing well for the firm but being unable to fully imbibe the culture and
vision of the workplace.
Parsons skills for the job and his ability to make a contribution to the revenues is not under
any doubt, however, his promotion may appear as a subversion of policy for just an
individual and may give a signal to others in the firm that the culture of MS is fluid and
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varies as per individual. This may ultimately lead to decline in morale among the employees.
On the other hand, in case Parson is not recommended for promotion, which he was
implicitly promised at the time of his joining the firm, he may look to leave the firm and take
the clients away with him as he has been single-handedly responsible in cultivating an
equation with them. This may have financial repercussions and lead to loss of brand image
for MS down the line.

Problem Statement
To solve the dilemma about the Parsons promotion, i.e., whether he should be recommended
for promotion to the position of Managing Director or not under the performance criteria of
MS.

Options
1. To recommend Rob Parson for promotion
2. Not to recommend Parson for promotion

Criteria for evaluation


1. Work Culture: Work culture is important at MS. MS does not like to maximize business at
the cost of MSs culture, teamwork and the integrity of the process. So this option is given the
first preference.
2. Revenues: Revenue is secondary for MS when compared to work culture. So this option is
given second preference.
3. Customer relationship: When compared with above two options, the impact on MS's clients
and their interaction with the CMS division is less. So this option is given third preference.

Evaluation of options
To recommend Rob Parson for promotion
1) Work Culture: Recommending Parson for promotion might set a precedent that increasing
revenue at the cost of cultural is acceptable and therefore may damage the efforts of
management at creating an environment that promotes teamwork and innovation.
2) Revenues: Parson is the main reason for the increase in MSs market share from 2% to
12.2%. So if Rob Parsons promotion is accepted, it can be assumed that the revenues may
increase or at the very least may remain constant.

3) Customer relationship: In Capital Market Services (CMS), the ability to attract and retain
business is highly dependent on individuals professional skills and expertise knowledge.
Parson can attract new business and create value addition to clients business. Parson stays
with the company if promoted and thus MS can maintain the same relationship with
customers.

Not recommending for the promotion


1) Work Culture: Not recommending for the promotion makes Parson leave the company. In
such case, MS loses a valuable resource but apparently shows its employees how much MS
values work culture.
2) Revenues: Parson may not continue to work with MS if he is not recommended for the
promotion. In such case market share of MS in CMS could drop.
3) Customer relationship: Parson maintains a good relationship with his clients. So MS loses
not only Parson but also customers in CMS if not recommended for promotion.

Recommendation
After evaluating the options available, it is recommended to decline the promotion

Action Plan
Though he performed exceedingly well for the firm and having been implicitly promised a
promotion, the fact that he is not being promoted this time should be conveyed personally.
The main reason for not promoting him is that he does not meet the requirements set by the
360-degree evaluation process being followed at Morgan Stanley which not only includes
performance but also the interpersonal skills, collaboration and teamwork. An effort should
be made to convey this decision in an informal environment. It is my view that Parson be
explicitly made aware MS foresees a future for him in the firm provided he is able to take the
necessary steps to imbibe the culture and ethos of MS.

WORD COUNT: 1154

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