CASE STUDY

Putnam Investments: Rebuilding the Culture

QUESTION/ANSWERS

Submitted By:
Mujahid Maqsood
Munir
Saad Akhter
Wasif
Saad Ahmed
Afnan
MBA (1.5) 2nd Semester
Morning (Section B)
Submitted To:
Dr. M Atiq

INSTITUTE OF MANAGEMENT SCIENCES

QUESTIONS
Q1: Identify symbols, rituals, stories, power structures, control systems, Organizational
structures under Lassers leadership. Based on these identify the inherent paradigm and
draw a cultural web?
Ans: RITUALS:
Lasser used to hold the quarterly meeting for only 800 employees and didnt include the rest of
employees in these meetings. Senior executives were allowed to eat lunch in the dining room of
office, while the junior executives were avail the privilege for a number of days per week. He
focuses on one way communication i.e. from top to bottom and lower level employees have to
work on the directions received from the top. The main emphasis in his era is on short term gains
and focuses on getting new customers for the funds and leaves the old ones to defend
themselves.
STORIES:
The success of Lasser over a long period is that many investors were more interested in the
chance of short term gains, due to which many funds managers were involve in market timing, it
is in the knowledge of Lasser but still he didnt present in front of board members and didnt take
any action against those managers due to which they are lagged behind in performance from
their competitors.
SYMBOLS:
Lasser make a team of 35-40 senior Putnam executives known as Partner group, who have
little or no role in governance, membership was merely a matter of prestige, recognition and
additional compensation. In his era access to the executive rooms are tightly controlled.
POWER STRUCTURE:
When Lasser is appointed as a CEO, the firm grew rapidly because they focus on technology
stock and emphasis is on sale to new clients and leave their old clients due to which trust of
clients among Putnam decreases, which ultimately affect the performance of the firm. Lasser
make personal force, which is responsible for issue like hiring, firing, performance over sight etc.
In his era people works under pressure because if their performance is not satisfactory, they
would be replaced.
CONTROL SYSTEM:

During Lasser era, bonuses were mysterious process and were kept under the control of CEO and
HR department. The main focuses in on individual achievement.

ORGANIZATIONAL STRUCTURE:
The organizational structure is highly centralized; the employees were used to work on the
direction coming from the top.
PARADIGM:
Lasser was reluctant to bring any negative event or problem to his attention.

Q2: Why Haldeman adopted a new paradigm? Identify the new inherent paradigm of
Putnam under Haldeman?
Ans: The Haldeman adopted the new paradigm, because with the old paradigm the performance
of firm would be decrease and clients were no more trust on Putnam. Many states funds were
with drawl from Putnam. Employees performance were also decrease and they were leaving the

firm, because their reputation is also affected due to their association with Putnam, also the brand
image of the firm was badly destroyed and intermediaries hesitate to recommend Putnam funds
to their client, due to lack of trust.
The new paradigm under Haldeman emphasized on delegation, teamwork and careful long term
investing. He focuses on transparency and open communication. He includes all the employees
in quarterly meeting and encourages questions from them. There is two way communications
between senior leadership and rest of the firm. He also promotes entrepreneurship by forming
portfolio teams. There is delegation of authority.
Q3: What is your opinion regarding Haldemans transformational changes? Will he
succeed this time?
Ans: As Haldeman is focuses on open communication, teamwork, delegation of authority, so it
will motivate employees and would improve the performance of the firm, he would take strict
action against the managers and employees who are involve in market timing. As the people in
the Lasser are use to work from the direction coming from the top so they face difficulty when
they are allow to make decision, because of afraid of making wrong decision and this will
promote entrepreneurship. Haldeman also focuses on teamwork rather than individual
achievement, because when the employees work in team, the result will be more successful than
if individual work alone. As a CEO, he focuses on long term investment philosophy and
emphasized on consistency, dependability and superior performance. In short term profit oriented
strategy, investors would get returns immediately, but this would not be fruitful in long run as in
the case of Putnam in the era of Lasser.
So all from the above discussion I conclude that these transformational changes are very
necessary for the firm and without these changes the trust cant be build and cant improve the
performance of the firm.