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Campbell and Bailyns Boston Office: Managing the Reorganization

Case Study Analysis Principles of Management- July 2012

Synopsis
Fixed Income Division: International Investment Banks Securities Brokerage division facing rapid change New Products flooding the markets, structural cyclical industry change challenges the limits of firms expertise and its traditional form of organization. Kevin Winston, RSM Manages Boston Office and maintain high level of sales. Created Key Account Team (KAT) to increase sales of specialized, higher margin products. Challenges the core values of the organization- such as salespersons control of his/her customer base and the appropriateness of product specialization.

Synopsis
RSM struggles in top down management edict which consists of a new performance management system.

Objectives
To provide a context to study how changes in the competitive environment of an organization-industry, customers, other firms- can necessitate changes in the design of an organization. To provide an exercise in which readers can learn to think through and balance the consequences advantages and disadvantages of introducing organizational change into a well established group. To provide an illustration and grounds for discussion about how changes in one work group require the participation of and have consequences for other segments within the hierarchical structure.

Objectives
To provide a framework the one presented through the eyes of the protagonist- in which the reader/ student has to consider the tradeoffs between a number of important management priorities: in this instance, performance management, compensation, regional sales, firm profit, staff morale, and customer satisfaction. To introduce the tradeoffs for managers in how to increase sales both by pushing through productfocused marketing, and pulling by creating customer demand.

Use of the Case


Organizational Development
Design, especially of sub groups in larger organizations Design, in cross functional context

Change Management
Preparing for resistance to change\Selling the change Evaluating progress

Managing Teams
Especially managing stars in teams Balancing individual rewards with groups rewards

Performance Management
Performance Appraisal
Single evaluator to multi-rater system Peer appraisals

Use of the Case


Sales and Marketing Management
Aligning sales and management Product profitability Product specialization

Managing in the Securities industry


Brokerages Investment companies (the customers)

Managing for Value


Understanding the tradeoffs between growth and profit.

Analysis
Analyzing the industry context

What are the trends in the investment banking industry affecting Campbell and Bailyn in 2007? Product specialization Move toward commoditization in some segments of industry. Increasing sophistication of customers

Analysis
Assessing the pre-existing organization
Describe the strengths and weakness of the C&B Brokerage division prior to the two changes explained in the case.
The interactions of the New York Office with the regional sales teams Whether there are misalignments in incentives between these functions.
Salespeople aim to maximize dollar value of sales (hence commission) while product managers aim to maximize profit of sales (overall firm objective as well).

How important is the regional sales manager to the success of the regional office? What function does he or she serve? What is the most pressing problem that Winston needs to address in his organization? Why?

Analysis
The Key Account Team
What are the major design features of the KAT? Did the changes taking place in the bond industry and within client companies justify the decision to create the KAT? Does the specialization represented by the KAT to the sales people in the Boston Office represent an incentive to try harder, work harder? Or the reverse? Or is it neutral? Which quote seems to best describe the effect the KAT is likely to have on the organization? The Xenophon quote on the advantage of division of labor, or the Ruskin quote on the human cost of specialization? Were there other approaches besides the KAT that Winston could have pursued to address the challenges the organization faced? Should Winston recommend the KAT concept to the other RSM as an effective solution to the problem of customer specialization?

Analysis
Performance Management
1. How are people evaluated prior to the introduction of the new evaluation system? How are they compensated? 2. What incentives are created under the new performance management system that were not present earlier? 3. Is the new performance management system fair to the Boston office salespeople? Does it provide the New York staff with the proper amount of leverage? Too much? Not enough? 4. Do you believe the new compensation will work in the Boston office? Why or why not? 5. Do the new performance evaluation system and the KAT reinforce each other, or did they work at cross purposes?

Analysis
Winstons Management Approach
How is Winston's job different after the changes explained in the case are implemented? How much involvement did Winston's staff have in the creation of the KAT? Based on what we know about Winston, how effective has he been in selling the changes to his staff? Do the changes Winston and top management are introducing mean that the job description of the C&B sales person should be significantly rewritten?

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