Merrill Lynch and Organizational Strategy - Essay Example

Merrill Lynch and Organizational Strategy Introduction Companies apply a variety of strategies and models in attempts to succeed. Companies apply these methods to bring about harmony between the employer and employees as well as clients. Some methods are tweaked to fit their business models and the McKinsey’s 7S is such a model. Its seven elements are the basis for many firms’ strategic development and, to an extent, their success. Merrill Lynch was a global leader and was one of the world’s premier providers of “wealth management, securities trading and sales, corporate finance and investment banking services” (ML, 2008). Merrill Lynch work with their clients as “strategic partners” and assist clients in the creation and execution of market strategic solutions, thus addressing their clients most important investment and financial needs practically anywhere in the world. The global network of the company specifies the commitment to meet diverse clients from different world markets. The organization mainly operates on firm relationships and partnerships with clients and has five important principles on which their business was based. The five principles were: Client Focus, Respect for the individual, Teamwork, responsible Citizenship and Integrity (ML, 2008). Organizational Definitions The global commitment to serve clients “anywhere in the world” represents that the organization is geared up to meet any kind of business pressure and challenges with the market it moves in. Merrill Lynch focused their value in five principles mentioned earlier and maintained its business globally by applying the principles throughout the world they operate in. The value around client focus or trust between the client and the company distinguished itself from the competitors and still instill the same value though it’s been taken over by Bank of America. On top of the company’s mission to help clients build wealth, other areas that the company boasts includes a culture of innovation (in designing new securities, system and transactions) and its leadership positions in chosen markets that “enable us to anticipate market trends, see opportunities as they develop and execute freely” (Company Overview, 2010). Merrill Lynch was very fortunate in that it has a brand name that is very familiar; in fact, it is known pretty much the world over. Much of the literature in recent months has concerned Bank of America’s acquisition of Merrill lynch, and Merrill Lynch’s exposure to subprime situations. However, directors of the Merrill Lynch were focused in attempts to encourage a culture in which employees can grow and be comfortable on a professional basis. Share Values As shown in figure 1, share values of the company plays an important role that connects the matrix of the McKinsey’s 7S model. Merrill Lynch values 5 important principles. 1. Client Focus: The Company’s goal is to fulfill clients’ needs by understanding the client by anticipating and responding. As an investment advisor, the company provides the broadest range and highest quality of products and services. The company emphasizes in developing long-term relationships by actively listening to clients’ feedback in order to build trust and loyalty. 2. Respect for the individual: The Company values respects for each individual, whether an employee, shareholder, client, or member of the general public. The directors of the company always sought to create an environment for people of different backgrounds so they could reach their fullest potential and equal access to opportunities. 3. Teamwork: Although this topic may be covered more in Style, it was one of the shared values of the company. By putting importance in synchronization of work within groups and teams, employees took responsibilities for helping others by being dependable, reliable and contributing fully to the team. The clients recognized sophisticated technologies and praised the accomplishment of global teamwork. 4. Responsible Citizenship: The Company sought to improve the quality of life in the communities where the employees live and work. At Merrill Lynch, our goal was to act in ways to help us to recognize, follow and respect all customers, laws where Merrill Lynch conduct business and foster an atmosphere that encourages community involvement. 5. Integrity: Merrill Lynch’s core business act in trust. The company put a highest priority to build trust and honest relationships with clients. Integrity was a key factor of the company’s long lived prosperity. Though the company has gone through a rough patch in recent years, we have to remember that, to the outside world, the bull, the company’s logo, stands for trust and stability. Strategy Merrill Lynch positioned itself to be the preeminent global investment bank, wealth management and advisory company. It was the company’s strategy to maintain the predominant business worldwide. To achieve the goal of maintaining the status, it operated with discipline and focus throughout the firm to ensure that the appropriate resources were delivered to each business opportunity. In case of the trading division, manager of the traders monitored each trader closely to ensure appropriate and legal trading. The strategy that Merrill Lynch focused on was to keep the promise of integrity of work for the customers and to be trusted. Structure Merrill Lynch utilized the structure to support quicker internal communication. To promote quicker communication throughout the firm, Merrill Lynch approached a vertical structure – but the regional managers had the decision-making power, which was passed down to the branch managers. Technically, the branches had to abide by the shared values, but were empowered to make decisions that can help clients. Someone living in Europe, for example, is going to have different investment requirements than someone living in New York or Chicago. While regional managers set the overall tone and objectives, the branch managers carry that down further to their employees. Skills Merrill Lynch’s core competency is wealth management. The company incorporates one of the best wealth management technologies. Working with financial applications such as trading systems and marketing applications, employees were well trained to evaluate the client needs and to give integral advice. The company performed periodical assessments, self-evaluation, and competitor analysis: both external and internal. Style The CEO communicated a clear vision for the company to teams and how to go about getting to the end result. The vision included growing a customer base and increasing the product line for consumers and small businesses. The goal was to add trust and value to the company’s services. And then, the management team believed this was the way to reach the objectives and goals for the organization. One of the techniques that the organization employed was creating urgency for change, which was driven by the customer’s perspective. The concept of creating urgency for change by having its employees communicate with its clients to better understand the client’s point-of-view. The company tried to expose its employees to problems and challenged external to company, to share the consequences if issues are unsolved. The company emphasized that the technique motivated the workforce to understand and embrace organizational change. Managers also encountered a special role in transferring a vision throughout the division without losing the core value of the company. Merrill Lynch often called for training/meeting to rally its employees to brainwash that the “customer is our king and we need change.” However, one must alter the mind-set of the employees before transforming the organization by creating an atmosphere that encourages, supports teamwork, and inspires individuals to develop fresh ideas and innovations. The company’s initiatives should transfer to employees accurately that the organization’s need to provide its customers the level of service they deserve. More often than not, asking employees to change caused them to question if they have perhaps done something wrong, and employees at Merrill Lynch, on top of the financial crisis, started questioning other teams and employees for predilection during the course and it shattered the core value of the company of teamwork and integrity. Systems Merrill Lynch research analysts provided insightful, objective and decisive research that is designed to enable clients to make informed investment decisions. Merrill Lynch Global Research had one of the most respected research organizations in the worldwide with more than 800 analysts. Due to Merrill Lynch’s resistant in offering Internet trading system, called ECN, because commissions were a big part of the organization’s profit, the company lost new customers to other investment bankers. Merrill Lynch should have focused on Technology and letting low-end customers get involved at least into online trading. The cost of implementation for these strategies is not that much since Merrill Lynch already had been on the Internet. Staff Merrill Lynch was able to provide powerful and inclusive core values among the employees. A significant governance of the Merrill Lynch’s strategy was its ability to develop talent and create an environment to promote innovative ideas and skills. The company utilized employee’s abilities in customer satisfaction by strict regulations and rules. Employees at Merrill Lynch strictly followed the rules and regulations in their decision making and planning. Conclusion Before the financial meltdown and creation of sub-prime mortgages, Merrill Lynch prospered in the way they have kept for over 100 years. The five principles that the organization valued integrated the structure, strategy, skills of the managers and employees, systems, and style. Though the company is now part of Bank of America, it will likely continue to carry on its name, and strategy, to create wealth through outstanding customer service, a dedicated approach to understand the client needs by researching and utilizing the global networks. Needless to say, despite the fact it is one of those criticized Wall Street firms, Merrill Lynch has managed to outlast several panics, a couple of world wars, and so on. Merrill Lynch had kept its values for over a decade and that made the company one of the most powerful organizations in the world for such a long period. The conclusion is really good, though I am confused about the last two sentences: “Merrill Lynch has managed to outlast [...] a couple of world wars [...] and had kept its values for over a decade [...].” Instead of decade, do you mean century? A decade is only 10 years, and there have been no world wars in this time period. In regard to finishing strong in the writing of you conclusion, I would suggest that you briefly go over the five principles on more time - giving a quick definition. A conclusion is to sum up your paper, and the majority of your paper deals with those principles, so they should be discussed - not in great detail though - just one more time to show that you under their concepts. Other than that, I think you did a wonderful job on the paper. It was well-read and very informing. Read More