Organisational Behaviour in JP Morgan Chase and Co

JP Morgan Chase & Co. was founded in year 1799 in New York City .It is the oldest, largest and well established financial services firm. It has operations in more than 50 countries. The firm is created over period years through mergers and acquisitions of various financial institutions in the past. And they recently acquitted Bear Sterns and Washington Mutual (WaMu) in the year 2008 at time of recession.

The global financial services firm comprises of two well establish brands JP Morgan and Chase. It is a leader in investment banking, Private Equity, Asset Management, Commercial Banking, Financial transaction processing, financial services for the consumers and small business. It provides its services to millions of consumers and many of them are the world’s leading corporate, government clients and institutions. It has 236,810 employees (2010) and assets worth $2.1 Trillion.

JP Morgan has six lines of business which are Investment Banking, Retail Financial Services, Card Services, Commercial Banking, Treasury & Security Services, and Asset Management. And to support these six lines of business in their functions corporate finance plays a vital role.

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On May 2008, JP Morgan Chase acquired Bear Sterns for $ 1.5 billion which helped them come out of the two areas which they were weak in, Prime brokerage and Commodities. It added $ 1 billion of annual revenue for JP Morgan Chase. In September 2008 they also acquired Washington Mutual for approximately $ 1.9 billion, this added WaMu’s 2200 branches, 5000 ATMs and 12.6 million checking accounts, savings, mortgages and credit card accounts. It added estimated $ 2 billion revenue to JP Morgan chase. These acquisitions enhanced the annual earnings for the firm.

Part 1 (Leadership)

Summary

In the present world leadership is important in every organisation in order to be successful. Leaders are present in organisation in form of Chief Executive Officer, Managing directors, President’s and Managers and Team members. Few are born leaders and some are created by the situation. Leadership as a quality influences a lot of people who follow the leader’s trail of path in achieving the common objectives. Leadership is “the ability to motivate, influence and enable individuals to contribute to the objectives of the organisation of which they are members” (R. House, P. Hanges, M.Javidan, P. Dorfman and V. Gupta (eds.), 2004). Leaders are people who teach, manage, advise, decide, direct and have powers. They are the future of the organisation which is why the firms also take an interest in developing their skills and attributes as they are the long term asset for the organisation.

Leadership in an organisation are being created by leaders who are already present in an organisation as a top executive. These top executive have very big responsibilities on their hands on choosing the right person to be the leader. And they only choose if the person gets results which show his strengths.

A theory which I have chosen to describe the leader is:

Transactional versus Transformational (Charismatic) leadership

Charisma

Vision

Intellectual Stimulation

Consideration and Sensitivity to followers

Theory A

Transactional versus Transformational (Charismatic) leadership

Max Weber’s (1947) model of transaction and transformation leadership authority was being coined by Burns (1978) “who contrasted successful leadership in stable situation with that in changing circumstances” (Rollinson, 2008:377). After that Burns ideas was extended by Bass (1985) who distinguished between transactional and transformational leadership. In Transactional leadership the relationship between leaders and subordinates is of similar character to the higher management role in normal conditions, where the important skills required by the leader are able to resolve the subordinate’s needs and take up the required style of managing the relationship. But in today’s scenario the organisations undergo lots of changes in order to meet the changing demand of the nature. As firms go under hierarchy restructuring the bond between the leaders and subordinates tends to change in both positive and negative manner depending on the situation. In this case the leader has to stabilize the scene and use his skills and attributes to bring in the followers to cope with change and explain his vision of taking things forward and change their current ways of doing things. This is Transformational leadership behaviour pattern which prevails according to Bass. Bass believed that Transformational leadership has four key characteristics: charisma, vision, intellectual stimulation of followers, consideration and sensitivity to followers.

As future is changing rapidly organisation are looking transformational leaders who can see a bigger picture, ambitious about long term goals, and share their vision with the other people.

But many leaders also follow the transactional leadership approach because some are reluctant to change their style of leadership or in some firms it may not be required as it can backfire.

Data and Methods

The source of primary data comes from my memories of observation, recollecting my experience with team and the time spent with them. The Personal computer of my organisation was also configured with the mailbox and also had instant messaging software.

Analysis

To start with, I joined J.P Morgan Chase in March 2008, I was part of Corporate Finance line of business in which it has Corporate finance team which does the financial reporting for the business/groups which take services from other Lines Of Business(LOB). This team came into existence in the year 2006. I started off as a team member and was part of a migration from United States of America (US) for Centralised Transaction Operations (CTO) process, In which various critical reports where being migrated from US. At that time corporate finance team had two managers and Manager 1 had seven members (Team 1) working with him including myself and Manager 2 had nine members (Team 2) working with him. Both the managers had various process/task which were being performed by other members of team .As time passed by few of the members from both teams took an Internal Job Posting (IJP) or left the firm and new members joined the team. In February 2009 my manager decided to take an IJP and move to Treasury Security & Services (TSS) which is one of the LOB to explore a new domain. The higher management decided that manager 2 should take over the functions which manager 1 performed as he was aware about the clients and the process. When team 1 got the news that our manager is going in for IJP few of the team members were quite shocked and distressed by hearing the news. Many team members reacted to his decision that he should not go and if he leaves then many of them will quit the firm, because of the bond which was developed in the team by manager 1 was very strong. So to tranquil down the situation Vice President/Chief Operating Officer of the corporate finance held a meeting with team 1 explaining the team about the future changes which are going to take place in Corporate Finance Team which was part of his vision like hierarchy re-structuring and creating a one single manager for both team, because both the managers cannot be promoted to next level until one of them moves out and other takes the responsibility of both teams. The VP/COO was trying to create a proper chain of command as he had many managers and vice presidents reporting to him. He also told us about the changes which are going to take place in the organisation and would bring in more work on the table. He spoke about his experiences and shared his views and thoughts amongst us, and explaining it to us that it’s part of life and we have to learn and adapt to the changes in positive way.

Next day, Team 1 and Team 2 combined together and formed as one Team and Manager 2 working with the team as a Manager. Both managers earlier were in the transactional leadership role as they only took care of the needs of the followers, but now as these rapid changes are taking place the new manager had to shift to transformational leadership role. Both the managers had a distinct style of leadership qualities in them. Manager 1 was authoritative, non-transparent, shared knowledge, lacked visibility on the floor. Whereas Manager 2 was quite the opposite he was democratic, transparent, high visibility on the floor, and dynamic nature, only negative thing was that he did not share his knowledge. Lots of thing changed in very less time manager changed, style of leadership which members followed changed, in order to mix both team together and create synergies the sitting positions were changed. Both managers had one on one meeting with each of the team members, Manager 1 gave complete details of his team members to Manager 2 in order for him to understand the nature, future plans, skills which members had and kind of work/task which he performed in order to get familiar with us. Transition phase was completed and one manager was working with more than 20 members in the team where everyone had a different task to perform.

I noticed lots of changes in manager’s style of working, first of all he changed his sitting position and to the centre seat so that he can be accessible to everyone in the team, as days passed by the and the team started to interact with him on a regular basis regarding the work and having weekly meetings as his charisma played a vital role, many views about him changed and the team started accepting his vision of bringing more quality work. He even offered his views on changing the pattern of work as the work was dependent on onshore clients he identified the problems and convinced us to follow his methods and by which it helped us save time and man hours which used to take up lot of time before. He also gave us freedom in order to complete the process but within the deadline. If I pointed out the changes which were being required in the process, and he would give us the lead to propose changes in front of the client which would boost our confidence, create a good bonding relation between me and the client. This I presume, that he is a Democratic leader, according to Style theory. He also kept close attention of the team and spotted the skills for that group of team members which performed similar task/process. Hard skills like Microsoft Excel, Microsoft Access and various databases, he also emphasised on soft skills and creating visibility on floor by making us take part in various non-business activities which were being organised by JP Morgan India people committee, wherein I would get to interact with different people from various other LOB’s. As my manager was the head of people committee and he organised various events which involved more than 1000 people on the floor. He is well known on the floor everyone knew him very well as he had ‘it will be done’ attitude. He is my mentor and he always used to take out time for one-one meeting with me at the end of the month and give a feedback on the work done, he also pointed out the areas where I need to improve my skills and appreciate the work done. It helps in obtaining satisfaction of my psychological needs, such as achievement and recognition(Kotter 1990).

The VP/COO decided to have skip-level meeting with team 1 after a week when manger 2 took over the responsibilities of the team. In skip-level meeting the manger of the team is not present and the team members give feedback, suggestions for the new manager and in the first meeting the team members complained about the changes and expressing their discomfort with the new managers. Few members were reluctant to the changes which were happening around and plus the added pressure of work had taken its toll. But as the new manager got involved in the work and meeting the clients and sitting with each member learning and understanding the process.

During the same time in February 2009 recession period was on and at that time J.P Morgan Chase had bought these two big financial firms Bear Sterns and Washington Mutual (WaMu). And they had started the process of integrating the books of accounts which created a great load of work and stress in the team. So under the supervision of the new manager the work begun various other clients gained by the acquisition of firms and work almost doubled which had huge impact on the accuracy of the reports which being generated. The manager had to add headcounts in the team to handle the pressure of work.

Conclusion

According to the analysis senior management made the decision of organisational hierarchy restructuring in order to create proper chain of command.

Part 2 (Culture)

Summary