AMERICAN EXPRESS CASE STUDY

Submitted by VARUN SAWHNEY

Role of Robinson As a Chairman he had a vision of transforming American express into a financial empire, for this purpose he followed the strategy of acquisition. Some major acquisitions were:o The Boston Company , o Edmond Safras Trade Development Bank , o Lehman Brothers Kuhn Loeb, o E.F Hutton & co. etc. Robinson was also using power & politics in an organization . As Robinson will continue or not as chairman should be the decision of board of directors but most of the directors were elected by Robinson so the decision could be partial. American express was not doing good from couple of years and if not whole but up to some extent Robinson was responsible for that. Robinson without asking anyone decided that Mr.Golub will be his successor .This kind of decision must be taken with the agreement of all the members. Robinson was not following the normal regulation. As a Chairman & CEO he served the company for 16 years and now when the time of retirement comes he want to stay 2 years more in the company. His decision lead to the differences of opinion amongst the members and later on some directors. From the directors and shareholders point of view Robinson was not successful as a Chairman & CEO and going through the case

the opinion of our group is also the same that Robinson is not a successful Chairman & CEO as there is lack of management in an organization and Robinson is also playing a role of politician in the company. Role of director Warner took initiative to go with a new board room procedure. It will not be wrong if said that he was not very happy with the working of chairman. He analyze the problems and then put the problems in front of board. According to him all the setbacks facing by American express was due to Mr. Robinson and he wants Robinson to retire immediately and the successor should found. Warner was assuming Robinson as a victim of the Boardroom cabal. Overall it can be said that he was aware of what is going in company right or wrong and seems not happy with the overall management. While going through the case the opinion of our group is thatWarner was doing good job as a director but if he was seeing the wrong in an organization and was not happy from the working of Robinson he should take action sooner against it and not to avoid whatever is happening in the company. Warner had a full knowledge of right and wrong going in the organization and even after that he took too much time to act against it. Role of other Board Members Reaction of other Board Members was mixed on the issue of Robinsons retirement. Some wants him to retire but some not. Board of directors was giving there opinion what they was thinking right but can not give there vote. the board was created

just for emergency and the most important thing is that most of the members of the board was appointed by Robinson so they were not able to act impartially. So according to our group Board members were doing there Job but they should act impartially even if they were appointed by Robinson but now they were the part of the Organization. Role of share holder As the company was not performing well shareholders lost faith in the company. Shareholders also become the part of the politics in the organization. Shareholders was not happy with the Robinson role. They were making Robinson responsible for all the setbacks in an organization.