Campbell and Bailyn’s Boston Office: Managing the Reorganization Harvard Case Solution & Analysis


Situation Analysis

Campbell and Bailyn was founded in the early 1900 s. The company has been based in New York. C & B has been one of the largest investment banks in the market. The company has been performing reasonably well within the investment banking market. Along with this, the firm has had a bond division which has been the fastest growing unit for the company. The most productive division for C&B is in Boston.

It has eight regional offices in the world. Moreover, after the New York office, Boston was the largest office for C & B. In terms of the revenue model and the size, the Boston office was often used as the bellwether because of its management ideas. Ken Winston who is the regional sales manager for the Boston office has been an experienced individual in bond sales. He was appointed in the year 2003. The idea behind his hiring was to actually grow and expand the local sales team.

In the recent past, the banking industry has changed dramatically. The market has grown and new players have entered the market.  Product scope has increased and the demand has also been diversified. The companies have been facing issue where they find it hard to sell and maintain the volume.

The margins have also decreased and the market has been affected with the entrance of low price and low service brokers. To actually gauge in reasonable profits, the brokers have been made to understand the market deeply.

In the year 2007, the financial crisis melted down the mortgage backed securities market which also affected the sales for the firm C & B. In the current situation, Winston had to actually make two strategic changes to operate efficiently and maintain the sales growth for the firm.

To actually fulfill the strategic goal, Winston created the “key account team” KAT. The five major generalists in the taxable bond division sold the entire product line and also managed their respective customers. Winston combined the generalists and also assigned each one of them to sub segment of the firm. The major goal or the objective for Winston has been to enhance the sales team expertise for the product details and also focus on each individual respectively.

Along with this, for the past several months, the customers have also enjoyed the change and they see the new sales team more valuable. However, in spite the efforts made by Winston, some customers have been unhappy and have perceived it more complicated.

Moreover, some sales people also found the new method a bit complicated because of the multi product trades and large number of people. Another concern for Winston has been the limitation on the natural salesmanship for the people due to the specialization.

Along with this, the second change implemented by Winston was called as the multi source appraisal. This method did not include the combination of sales volume and own manager assessment.

The change was aimed to actually improve the collaborations between the cross functional teams and the regional sales force and also encourage the team to improve upon the profits and gross margin. The major risk that has been associated with this plan is that the method might lose upon the gross margins and the sales volume. The sales team was also frustrated with the change.

Problem Analysis and Diagnosis

Winston had to present the two changes for the annual year end meeting. Since Winston has been in touch with the customers and the sales team, he was rather clear with the pros and cons of the new changes. Since the KAT team provided value to the customers, it also created confusion, extra burden and complications for the sales team and also for the customers.

The major issue was that the customers had to deal with multi people now instead of an individual who handled them in the past. Along with this, more people were engaged depending upon the size of the deal. Number of meeting and calls also increased. The decision to actually introduce KAT team had missed the input and the engagement from the specialist team who had experts working on specialty products.

 Similarly, the fail process believed that the engagement not only helped in communicating management respect for the individual but it also encouraged the refutation which cleared the thinking and the vision. It also lacked smooth process and collaborations. Furthermore, the sales team has been spending extra time in house to figure out the new process and its requirements, rather than spending time to cater needs of the customers……………………………

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Campbell and Bailyn’s Boston Office: Managing the Reorganization