Problem Statement

To address the issue of Rob Parson’s recommendation for promoting to role of Managing
Director at Morgan Stanley based on his significant gains in building Morgan Stanley’s
reputation and revenues but affecting the culture and vision of being a “ONE-FIRM FIRM”.
Despite his poor performance evaluation would he stay back in the organization if not
promoted.

Detailed analysis of the problem

Morgan Stanley is a leading US investment bank which in 1993, tried to transform itself into
a ‘One-Firm Firm’ by having concrete management practices chosen to maximise trust &
loyalty inside the organisation and among the members under the leadership of John Mack,
it’s then President. Their mission statement explicitly captured this essence. MS has a vertical
organizational structure, starting from Associate at the beginner’s level to the Managing
Director at the most experienced level.
The Capital Markets Services (CMS) division at Morgan Stanley, required professionals who
had good understanding about the industry and making market judgements on the same. They
needed to understand clearly their client needs. These requirements lead Paul Nasr to
appointment of Rob Parson, a managing director at a smaller firm, as market coverage
professional with whom he had already worked in his previous organization. He was
promised a promotion at the time of joining. He possessed expert power.

Rob Parson played an instrumental role in building the position and market share of Morgan
Stanley to the current position of 3rd in terms of market share with respect to 10th when he
had joined. But, this came with a compromise to the much celebrated “one-firm firm” as Rob
Parson was not a very good team player even though he was very good with his clients and
they loved him. He had low agreeableness, concensiousness and emotional stability. Nasr
never questioned parson’s behaviour despite these issues and played a nurturing parent.
Due to this even though he had the power to fire he did not exercise authority for the same.

After receiving the 360-degree feedback which was not at all satisfactory where he lacked
interpersonal skills. Nasr did not use the tool it is meant to be, he tried to link it with reward
which was not the right way it should have been done. As he is a volatile person by nature the
question of promoting him remains unanswered.

Factors impacting
 Promotion Decision: There should be clear picture of the pros and cons on the
decision and Nasr should take a neutral stand and analyse the factors and then come to
a decision.
 Revenue: Firing parson would affect the revenue of Morgan Stanley as he is the star
producer and had played an integral role in building the current market position of the
company
  Customer Relationship: As parson was very good with his clients and they liked him
and he was as good as convincing people who did not even have a need the decision
largely depended on this.
 Cultural: The firm laid great emphasise on their culture and retaining parson with his
current attitude would be a trade off on the same.

Alternative Solutions

 Recommend Rob Parson’s promotion

1. Nasr does not hold the final word of promotion. The performance evaluation
would be valued by the promotions committee. There are high possibilities of
the application to be rejected due to the continuous negative feedbacks.
2. If Parson’s recommendation is rejected, there is a high chance of him quitting.
This will affect both revenue and customer relationship.
3. Parson’s recommendation for promotion would set a wrong example for other
employees and this will affect the cultural values of the firm.
4. We also do not enough examples of parson possessing good leadership skills,
if promoted parson would not be the right person for this job.

 Defer the recommendation for promotion and give insights on the 360-degree
feedback and ask for these traits to be improved

1. Rob Parson can be informed on traits which needs to be taken care off and he
may be recommended for promotion in the following year if the same is done.
2. This would give an example to the employees that revenues are not the only
factor, values are also equally important. This would help them maintain the
culture of the firm.

Recommendations
The firm should go for the second alternative of deferring the promotion for a year as they
cannot take the risk of losing him as he is the star performer. This needs to be done by

 Nasr should take the role of a third party between parson and the employees and he
should show balancing inquiry and advocacy.
 The firm should make a platform for parson to communicate with other employees
and they should be able to confront to each other and clear out every misconception
they had of each other. This would give parson an ingroup feeling and this may help
him in binding with group and with the culture.
 Nasr should show effective persuasion by validating with facts how the change in
behaviour would benefit parson and motivate him.
 There is also evidence that parson has heavy workload which makes him very busy,
freeing him up a bit would give him free time where he might start mingling with his
colleagues and also would give him a long-term orientation with the firm.