Merrill Lynch Case Study

692 Words3 Pages
Case Analysis – Innovation and Collaboration at Merrill Lynch November 5, 2011 The changed environment of Wall Street threatened the independent, silo culture that dominated the investment research trade. Brokerage houses needed to identify opportunities to create value-added products. Despite industry reforms, lower trading volume, and declining commission rates, “research continued to provide brokerage firms’ key competitive advantage, according to Institutional Investor.” (Harvard Business School, 2007, p3) Research management at Merrill Lynch determined that collaboration amongst its analyst would lead to the innovative products and services considered necessary to prosper in this climate. This paper discusses why, despite a limited source of power, Candace Browning’s use of persuasion as an influence tool was effective in moving her department from its star culture to one that better fits the changing market for investment research. Power – Her position as head of Global Securities Research provided Candace Browning with legitimate power over Merrill Lynch analysts around the world. This potential to change the attitudes and behaviors of her staff was weakened by the low centrality she had in her position. “Centrality refers to the degree and nature of the interdependence between the power holder and others.” (McShane & Von Glinow, 2010, p306) Research analysts were used to working autonomously in their areas of expertise and were more dependent on Institutional Investor (II) rankings than a department head. The II rankings also increased the visibility of Merrill Lynch’s star analysts and dealt another blow to the magnitude of Ms. Browning’s legitimate power. Persuasion – “The effectiveness of persuasion as an influence tactic depends on characteristics of the persuader, message content, communication medium, and the audience being persuaded.”
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