Governance Problems at Morgan Stanley

Governance Problems at Morgan Stanley
Case Code: CGOV004
Case Length: 20 Pages
Period: 1998 - 2005
Pub Date: 2005
Teaching Note: Not Available
Price: Rs.400
Organization: Morgan Stanley
Industry: Investment Banking
Countries: US
Themes: -
Governance Problems at Morgan Stanley
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

The case discusses the rise and fall of Phil Purcell in Morgan Stanley, one of the largest investment banking companies in the US. It examines how Purcell assumed the role of CEO of the company after the merger of Morgan Stanley with Dean Witter and went on to fill the company's governing board with his loyalists. Purcell was severely criticized for the way he handled people in Morgan Stanley which led to the exodus of talented employees.

During his tenure as the CEO, Morgan Stanley got involved into several legal problems. The poor governance under Purcell's regime had an adverse affect on Morgan Stanley's stock, which slipped by 39% between 2000 and 2005.

A group of former Morgan Stanley executives started campaigning against Purcell and succeeded in ousting him from the company. After Purcell left, ex-president John Mack came back to Morgan Stanley. It remains to be seen how Mack would improve the culture and the morale of the company's employees and improve its financial performance.

Issues

The case is structured to achieve the following teaching objectives:

  • Examine the corporate governance practices at Morgan Stanley under Purcell
  • Problems faced by Morgan Stanley under Purcell
  • Reasons that led to the ouster of Purcell

Contents

Keywords

Morgan Stanley, Corporate governance, Leadership, Governing Board, 'Group of Eight', Organization Culture, Legal Problems, Perelman, Whistle Blowing

Buy this case study (Please select any one of the payment options)

Price: Rs.400
 Price: Rs.400 PayPal (9 USD)

Custom Search