Transcript Major obstacles to change

Strategic Management Project
Iryna Trygub
Amit Shroff
Alex Downs
Prasanna Gopalan
Hanqian Liu
Background
• Global leader and international
provider of financial services and
investment resources
• Worldwide assets under management
was $999.8 billion
• Customer accounts was 67.6 million
• Worldwide number of employees was
35.2 thousands
Multidivisional Structure
Fidelity
Employee
Services
Company
Fidelity
Brokerage
Company
Fidelity
E Business
CEO
&
Board of
Directors
Fidelity
Management
& Research
Company
Fidelity
Institutiona
l
Service
Company
Fidelity
Corporate
Systems &
Processing
Fidelity
Corporate
Services
Fidelity
Capital
Companies
Characteristics of the Organizational
Structure
• Complex structure
• vertical differentiation
• Relatively flat structure
• Wide span of control
Characteristics of the Organizational
Structure
• Decentralized approach High level of
differentiation
• Highly complex forms of integration
mechanism
Fidelity Brokerage Company
Executive Manager
Fidelity Personal
Investments
Institutional Brokerage
Groups
National Financial
Services
Private
Wealth Management Group
Capital Markets
Mutual Funds
Retirement Group
Client Services
Margin Group
Customer Service
Sales and Relationship
Mgmt
Brokerage Processing
Fidelity Customer
Market & Development
Market & Product
Development
Risk Management
Finance, Acting &
Regulatory Control
Treasury & Tax Services
Geographic Structure
• 8 regional centers in 7 states:
Smithfield, RI; Boston, MA; Western
Region; New York city; Southwest
Region; Marlborough, MA;
Merrimack, NH; Midwest Region.
• International affiliates in 24 countries
on 5 continents
Corporate Culture
• Stimulates friendly communication
• Supports a flexible, highperformance working environment,
in which creativity and innovation
are rewarded
Norms and Values
• Building partnerships among internal
customers and employees to provide
effective services and solutions
• Re-engineering business and technology
processes to improve customer
responsiveness and profitability of the
company
• Selecting and developing employees who
are committed to excellence
• Providing an environment where excellence
is fostered, recognized and rewarded
Rewards
• Individual reward
• Group reward
Individual Rewards
•
•
•
•
•
Bonuses
Profit Sharing
Promotions
Educational Benefits
Non-Monetary rewards
Strategic Controls
• Financial Control
• Output Controls
• Behavioral Control
Financial Control
• Stock price
• Return on Investment
Output Controls
• Benchmarking
• Analysis of customer survey
Behavioral Control
• Operating Budget
• Standardization
Improvements
• Fidelity needs to look at how the
changing market conditions
Improvements
• Adjust Structure of Fidelity
• Globalization
• Deregulations
• Changes in information
technologies
Improvements
• Adjust Reward System of Fidelity
• Subjective standards
• Long term reward system
Obstacles to Change
• Repositioning strategy
• Private ownership
Repositioning Strategy
“In personal Investments, we developed a
number a new brokerage services, and
strengthened our commitment to the high
net worth customer. This is essential at a
time when our competitors are providing
more and more specialized services to
reinforce their ties with this important
group of investors. At the same time, we
must reaffirm our long-term commitment to
all categories of investors, no matter what
their net worth.”
Chairman's letter 2000 annual report
•
.
Repositioning Strategy
“I want us to be seen as what we are
becoming – a firm that can provide
solutions for customers across their
whole range of financial needs.”
•
Chief Operating Officer Robert L. Reynolds
Repositioning strategy
• Fidelity has not clearly defined their
vision.
• Why Good Companies Go Bad
•
• Active inertia
– Need to act appropriately
By Donald N. Sull
Private Ownership
•
•
•
•
Expand globally
Fidelity – 24 countries
Merrill Lynch – 44 countries
JP Morgan – 50 countries
Example
• Fidelity developed the “Private Wealth
Management group” in March of 2000.
• Merrill Lynch “Private Client Group”
20,200 Financial Consultants in nearly 1000
private client offices in 34 Countries.
• This Merrill Lynch group has grown at a
compounded annual growth rate of 15%
over the last 5 years and has over $1.5
trillion dollars under management.
Conclusions
• Repositioning strategy
• Vision
• Write a mission statement
• Don’t try to be the best at every
thing. Build on core competencies.
Conclusions
• Private ownership
• Expand globally
• Borrow at AAA credit rating, or go
public to raise capital