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Governance Problems at Morgan Stanley

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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:


Case Code : CGOV004 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Shipping & Handling Charges extra



Case Length : 20 Pages
Period : 1998 - 2005
Pub Date : 2005
Teaching Note : Not Available
Organization : Morgan Stanley
Industry : Investment Banking
Countries : US


The case discusses the rise and fall of Phil Purcell in Morgan Stanley, one of the largest investment banking companies in the US. It examines how Purcell assumed the role of CEO of the company after the merger of Morgan Stanley with Dean Witter and went on to fill the company's governing board with his loyalists. Purcell was severely criticized for the way he handled people in Morgan Stanley which led to the exodus of talented employees.

During his tenure as the CEO, Morgan Stanley got involved into several legal problems. The poor governance under Purcell's regime had an adverse affect on Morgan Stanley's stock, which slipped by 39% between 2000 and 2005.

Corporate Governance | Case Study in Management, Operations, Strategies, Corporate Governance, Case Studies

A group of former Morgan Stanley executives started campaigning against Purcell and succeeded in ousting him from the company. After Purcell left, ex-president John Mack came back to Morgan Stanley. It remains to be seen how Mack would improve the culture and the morale of the company's employees and improve its financial performance.


Examine the corporate governance practices at Morgan Stanley under Purcell

Problems faced by Morgan Stanley under Purcell

Reasons that led to the ouster of Purcell


  Page No.
Return of John Mack 1
Background Note 2
Morgan Stanley under Purcell's Leadership 4
Purcell's Traits and Workplace Culture 6
Legal Problems under Purcell 8
Declining Shareholders' Value 10
Purcell and Morgan Stanley's Board 11
The Challenges Ahead 12
Exhibits 14


Morgan Stanley, Corporate governance, Leadership, Governing Board, 'Group of Eight', Organization Culture, Legal Problems, Perelman, Whistle Blowing

Return of John Mack - Next Page>>


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