The Morgan Stanley - Dean Witter Merger

  
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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Case Details:

Price:
Case Code : BSTR209 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Themes

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Case Length : 19 Pages
Period : 1997-2005
Organization : Morgan Stanley & Company; Dean Witter, Discover & Company
Pub Date : 2006
Teaching Note : Not Available
Countries : India
Industry : Investment Banking and Financial Services

Abstract:

The case discusses the merger of one of the largest investment banks in the US - Morgan Stanley with Dean Witter, Discover & Company, a retail firm specializing in stock brokerage, asset management and credit cards in 1997. Though analysts raised doubts about the success of the merger, initially the merger proved to be successful placing Morgan Stanley Dean Witter among the top investment banking and financial services companies. However, in the early 2000s, with the slowdown in the US economy, the merged entity reported declining revenues and profits and exodus of key top management personnel. The then CEO of Morgan Stanley Dean Witter, Phil Purcell forced out President & COO John Mack in 2001.

By 2005, Morgan Stanley was embroiled in governance and legal problems, which affected its business performance and financial position. A group of eight former executives of Morgan Stanley campaigned against Purcell leading to its ouster in June 2005. This case illustrates the role of top management and good governance in the success/failure of a merger.

Issues:

» Examine the synergies of merger between Morgan Stanley and Dean Witter
» Understand the reasons for the success of Morgan Stanley Dean Witter merger during its initial years
» Study the role of top management in the success of a merger
» Examine the nature of governance issues affecting the business performance of Morgan Stanley Dean Witter merger

Contents:

  Page No.
A Mega Merger 1
Background Note 2
The Merger 4
Post Merger Devolopments 6
The Troubles Begin 7
Cultural Differences Persist 7
The Slow Down 8
Governance Problems 9
The Challenges 11
Exhibits 13

Keywords:

Morgan Stanley. , Dean Witter, Discover & Company., Mergers and Acquisitions, Philip J Purcell, Business Segments, Cultural Problems, Governance, Legal Problems, Group of Eight, Merger Integration

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