Nomura Lehman Acquisition Sample Essay

By geting Lehman Brothers. Nomura would be conveying onboard some of the brightest bankers in the industry. along with the administrative and technological apparatus back uping them. But the acquisition besides meant that Nomura would be potentially increasing its head count by about 8000 employees over Europe and Asia. And these employees would be coming from an organisation with a civilization really different from Nomura’s bing civilization.

There was a formidable set of challenges. and Nomura ran into problem from the oncoming. Nomura set up passage squads across the abroad offices to incorporate the new employees into Nomura’s civilization. However. episodes of civilization daze were rapidly reported by the media: Teams of Nomura bargainers singing company vocals each forenoon to kick off the twenty-four hours ; the one-sided determination by the Nomura HR section to alter former Lehman female employees’ e-mail references to their married names without inquiring which they used professionally ; the new employees developing session where the adult females were taught how to have on their hair and service tea. merely to call a few.While. most of these clangs could be attributed to the East-West civilization divide.

the more cardinal issues stemmed from differences in corporate civilization. To a big extent. the civilization at Lehman was an incarnation of the personality of its former CEO. Richard Fuld. The employees at Lehman were trained to be bold and aggressive.

They were used to a civilization of high hazard tolerance. frequent usage of purchase. and fleet determination devising. Nomura’s corporate personality.

on the other manus. was more hierarchal. conservative. and favored more stable grosss based on moderate degrees or hazard pickings. Differences were besides common when it came to client prioritization. While the Lehman bankers based their precedences on fee coevals capableness of the client.

Nomura tended to put more weight on factors such as trueness and length of relationship. Sing these issues. the challenge before Nomura was how it would retain its new employees. To undertake this job. Nomura used a two tined attack.The first measure Nomura took in this way was to offer the Lehman employees the same compensation. which they were acquiring at Lehman before the prostration.

including high public presentation driven fillips. This was an of import alteration from Nomura’s bing compensation construction. which typically included a greater proportion of fixed income and comparatively lower public presentation goaded fillips. The compensation construction was once more a contemplation of the hazard averse mentality of the bank.

in contrast to Lehman’s civilization of high risk-high wages. The 2nd measure Nomura took was to offer cardinal stations like caputs of abroad concern units. to many Lehman bankers. Though this measure could be easy justified by the fact that the Lehman bankers had a good path record of solid public presentation. the primary motivation behind the move was to incorporate the new employees and guarantee them of calling growing so as to minimise the abrasion rate. However. both these stairss were accompanied by their ain set of jobs. By offering the new compensation construction.

Nomura created a wage derived function between its current employees and the new employees.To account for this. Nomura gave its bing employees the pick between the two compensation constructions. Surprisingly. around 45 % of the employees switched over to the new wage construction. In add-on. the method of calling development changed from Nomura’s old Renaissance man system. where employees rotated across different sections.

to a Lehman manner specializer system. where employees remained in one section to construct up expertness. This was possibly the first marks of the Nomura’s Lehmanization. Additionally. the arrangement of ex-Lehman employees in top functions did non travel down good with some of the bing set of employees who had their ain calling aspirations. Harmonizing to media histories.

the move gave rise to considerable tenseness over leading of Nomura’s overall abroad concern. However. Nomura did non desire to submit complete control of the abroad concern to the Lehman bankers.

and therefore some of the concern caputs who resided in Japan were relocated to abroad location to take up the place of planetary concern unit heads.Therefore. despite the high rubrics and duties given. the former Lehman bankers were non given commensurate independency and determination devising powers. which they were accustomed to at Lehman. As a consequence. defeats began to mount sing the slow and conservative gait of determination devising at the higher degrees. To incorporate the crisis.

ex-Lehman bankers were offered top functions in the organisation. which once more did non do good with some of the bing bankers at Nomura and led to their going from the bank.This gradual displacement of the power balance in favour of the ex-Lehman bankers can be seen as a step of the grade of Nomura’s Lehmanization.

Keeping these issues in head. one could reason that Nomura was possibly a small excessively speedy in doing its determination to get Lehman’s assets. However one must see that the determinations to get Lehman made a batch of concern sense. and a batch of other Bankss including Barclays.

were really eager to get these assets. Therefore. it was imperative that Nomura move fast and shut the trade in front of the other Bankss. Harmonizing to Shibata.

Nomura’s Chief Operating Officer. the post-merger integrating procedure is about “50 % complete” at this point. The amalgamation of Nomura and Lehman is still a work in advancement and it is excessively early to leave a concluding finding of fact on its success or failure.


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