Essay IP5: Final Project

Essay IP5: Final Project

Today, Morgan Stanley faces a number of problems in regard to its organizational structure and culture. In such a situation, the need to organizational change of the company and elaboration of a long-run strategy of the effective organizational development is obvious. In actuality, the company needs to improve its organizational structure and culture to improve its performance and gain a better marketing position but to reach this goal, it is necessary to take into consideration the impact of both internal and external forces, which affect the organizational performance and introduce changes, which can make these forces work for the benefit of the company.

Organizational change

The organizational change should focus on the change of the leadership style and relationships between the leader and subordinates and later the change should lead to consistent changes in the organizational structure to eliminate the departmental mentality and development of effective team work and coordination of works of all units and departments of the company. First, the leader of the company, John Mack, should start with changing his leadership style. In fact, the authoritarian leadership style does not work in the multicultural environment and in the situation, when the organization keeps growing fast. The latter means that employees and managers should have a substantial degree of autonomy, whereas the leader should perform the role of a guide rather than the highest authority that controls and orders employees to manage their actions totally. To introduce the change, it is necessary to change the leadership style. As the leader changes his leadership style, the relationships between the leader and his subordinates as well as relationships within the organization will change and improve (Partnoy, 1997). To put it more precisely, employees will feel confident in their significance for the company and they will do their best to improve their performance and to prove that the leader’s trust to the employees and support of employees is just. In other words, in response to the leader’s support and guidance, employees will provide positive feedback to the leader. In such a situation, the organizational performance will improve due to the development of positive interpersonal relationships, mutual trust and support.

In such a context, the departments existing in the company raise serious barriers to the introduction of the change because to implement the aforementioned change, it is necessary to eliminate barriers between departments. The latter means the elimination of the departmental mentality because, at the moment, employees are department-oriented that means that they view their department as the primary part of the organization, whereas needs and wants of Morgan Stanley turns out to be secondary compared to needs of the department (Chernow, 1990). As a result, on eliminating the departmental mentality the company can succeed in the introduction of the organizational change and improve the organizational culture and performance.

At the same time, the elimination of the departmental mentality should be accompanied by the development of team work, which should replace the work of departments. What is meant here is the fact that team members will work within their teams but they will feel being a part of the entire organization. As a result, they will work for the benefit of Morgan Stanley above all and not for the benefit of their department.

Organizational development

In such a situation, the development of the organizational culture should focus on the change of the relationships within the company and mentality of employees. Basically, the change of the leadership style and elimination of the departmental mentality will lead to the formation of a positive organizational culture, which includes positive interpersonal relationships between employees and managers and effective team work. The team work is crucial for the new organizational culture and organizational development (Hibbard, 2005). The team work should be based on the division of functions between team members. Each team member should understand clearly his or her functions and duties and focusing on these functions and duties employees will do their job avoiding conflicts and struggle for power within teams. In such a context, the role of the leader is particularly significant because the leader should provide his subordinates with positive models of behavior and support his subordinates in their efforts to improve their performance.


Thus, taking into account all above mentioned, it is important to lay emphasis on the fact that the development of the organizational culture and introduction of the organizational change should start with the leader and descend to the rest of employees. In such a way, Morgan Stanley can improve its organizational performance consistently.

Chernow, R. (1990) The House of Morgan. New York: Random House.
Hibbard, J. (17 January 2005). “Morgan Stanley: No stars—and lots of top tech IPOs.” In BusinessWeek, 56 – 58.
Partnoy, F. (1997). F.I.A.S.C.O. - NY: Penguin Books.

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