Crossroads (a)
10 Pages Posted: 21 Oct 2008
Abstract
This series presents the challenges facing the board of directors of a small merchant-banking company in London that is trying to get into the New York market. After hiring an American to develop the business, the board has become concerned about his operating style and his requests for additional authority. The A case ends after the American has made substantial improvements to the business and reports to the board, leaving the board to decide what to do with him. See also the B case (OB-0666). The two cases can be used as a team role-playing exercise.
Excerpt
UVA-OB-0665
CROSSROADS (A)
Roy Pemberton was not a happy man. He had just returned to his company's headquarters in London after a six-week period of absence (the result of a riding accident) and was still not quite fully recovered. However, as the most senior partner of Pemberton, Merton-Briggs, Limited, he found himself faced with a decision that would affect the future of the company. The situation concerned Michael Grant, the vice-chairman of the firm's U.S. subsidiary. The management committee had recently concluded a meeting at which Grant had presented a strategic plan for the U.S. subsidiary that would also affect the London office. The partners had discussed the plan that morning at the partners' meeting, but the vote had been split almost evenly for and against accepting it. Pemberton had asked for a 30-minute adjournment to consider his position before voting. As the largest shareholder, his vote would be conclusive. If the proposal was turned down, Grant was bound to resign from the firm. Pemberton liked the plan personally, but other aspects had to be considered.
The Industry
The securities industry in 1991 served an important role in the flow of capital within an industrialized economy. First of all, it provided a means of channeling funds from the savings sectors of the economy to the investing sectors. Second, the industry facilitated the trading of securities between buyers and sellers, and thus influenced the abilities of industries and firms to expand and diversify. Finally, the industry provided investors with a wide range of investment vehicles with various degrees of liquidity and risk/return characteristics. These functions were carried out through two types of activity: the issuing and placement of new issues of stock and the transfer of previously issued securities. These functions were carried out by various securities companies or investment banks. The companies provided brokerage services, underwrote corporate and government securities, and dealt in the securities markets. Some investment banks also provided a wide range of financial advisory services to both corporations and investors.
The Company
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Keywords: leadership, organizational culture, strategy
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