Strategies of Organization Development in the Securities Brokerage Industry

This thesis has as its general goal the integration of the fields of organization development with the management of financial intermediaries, especially the securities brokerage firms. It is my belief that the trends in O.D. are toward more use of multidisciplinary approaches, especially in professional settings. This industry has changed rapidly in the past decade, from a traditional one to a Professional one. It is my prediction that if they have not yet changed their methods of management to adapt to these changes, they will be forced to in the near future. The rate of change in the securities business will not slow through the 70's. To accomplish this general goal a case study approach is used. A full-service brokerage firm with an internal O.D. unit is presented for study. As for specific objectives, there were five: 1. To identify some general business characteristics of the securities industry, particulary Wall Street, that may impact the O.D. practitioner. 2. To identify specific managerial issues, concerns, and constraints, via a case study, that will affect O.D. strategies. 3. Using a case study approach identify how an internal O.D. unit has planned and implemented programs. 4. To analyze the case in reference to strategies for O.D. and for the internal practitioner -both successful and unsuccessful. 5. To look at a modified approach to O.D. consulting in these institutions. The approach utilized separates into four stages. One, the practitioners were interviewed extensively about their practice and their strategies as -3both O.D. practitioners in the industry and as internal consultants. Their viewpoint forms the base of the case presentation. Second, a group of managers from the firm were interviewed about their perceptions and involvement with the O.D. programs. Their data form the basis for the evaluation of the case. Third, the managers of personnel, where the O.D. group is located, were interviewed for their viewpoint of O.D. as a process and of O.D. as a function. Their data also was included in the evaluation. Finally, the data about the business, the practitioners, and the programs are contrasted against a normative framework developed for evaluation of the strategies for O.D. within the firm. Results are categorized into two areas -the application of O.D. to the securities firms, and the strategies for internal consulting in these firms. First, it is found that O.D. can be made relevent to these firms, if a taskoriented approach is taken. Specific strategies must be designed to deal with the special characteristics of the environment -extreme time pressure, short time perspective, and the tight hierarchical and political structure of the firm. Second, an internal O.D. unit must devise specific, and perhaps extreme, strategies to gain access and support from as high a level as possible. Without it, programs have little chance of long term change success. Several characteristics are found to be important to internal consulting, such as image, informal contact, information accessability, and limited use of power. Thesis Advisor: David A. Kolb Associate Professor of Management Alfred P. Sloan School of Management Thesis Reader: Richard Beckhard Senior Lecturer in Management Alfred P. Sloan School of Management