Imc Company - Jeffrey Smith Case

        The main problem between Smith and Johnson is their inability to agree on what IMC’s vision and corporate strategy should look like. It is the early 1990’s, where market forces were rapidly changing due to globalization and technology advancements. By spearheading IMCs management meetings, it initially seems as if Smith is encouraging management to make adaptations to its corporate strategy to optimally take advantage of the current economic climate. At a meeting, Johnson suggests that IMC should accept responsibility for a greater amount of mutual fund management. His idea is soon shut down by Wilson, and Smith, whom believe that IMC should solely focus on its initial strategy, which was the company’s distinctive competence in the management of real estate investments. By taking Wilson’s side, and shutting down Johnson’s idea so abruptly, and then failing to follow up with Johnson on a personal level, Smith fails to appear as a fair and impartial mediator. Thus, Johnson soon feels alienated by Johnson and Wilson, and decides to rally support from his colleagues.

Another angle to view the problem would through identifying Johnson’s acts of insubordination and defiance. Because he is frustrated that Smith and Wilson are unwilling to give his mutual fund proposal a chance, he starts creating a divisive culture within the firm by rallying a large amount of IMC’s staff to support his proposal. Then, he threatens Smith that he will leave IMC, and take the portfolio managers and a few people from the research group with him to start his own company. From a power perspective, it is clear that Smith and Johnson’s visions for IMC’s corporate strategy are at odds. Smith and Johnson are both utilizing their power of influence to ensure that their own visions for the company will take place, but they are neither collaborating or confronting the lack of alignment in goals. This leads to many conflicts within the company that disrupts the organizational structure. For example, although Smith’s role in the company is senior to Johnson, Johnson is still able to use his influence over Smith’s staff in the research department, whom he does not oversee. Johnson builds coalition with the staff, despite not being their direct manager, and derails Wilson’s research project that had been approved by Smith. An example of how Johnson is abuses his managerial power occurred when he convinces the staff in Wilson’s department to work on analysis work for him instead, by instilling fear in them and threatening that their jobs are on the line. Smith is also abusing his own managerial power by not giving Johnson’s proposal a chance and siding with Wilson.

 Furthermore, Johnson also builds his influence on other staff based on his individual merit and reputation. His interpersonal skills make him aware of his good reputation within his department as a successful fund manager. Not only did Johnson develop a large and loyal group of portfolio managers, but he is also the primary liaison between IMC and the Boston Mutual Fund, accounting for 30% of the assets that IMC managed. Thus, most of Johnson’s portfolio managers are convinced that Johnson’s strategy is better than Smith’s and Wilson’s, and they are willing to support him and butt heads with his opposing forces. Although Johnson’s approach of confronting his conflicts with Smith may not have been the best method, it is clear that Johnson strategically used his good reputation in the company to rally the support of his colleagues and go head to head with Smith.