LESLIE BRINKMAN AT VERSUTIA CAPITAL Case Solution
Introduction
The hedge fund, Versutia Capital had been enjoying great success and a tremendous growth since the hedge fund was established in 2003. Leslie Brinkman is the CEO and the founding partner of the hedge fund. The fund was launched by her in the year 2003 after she had assembled her time in 2002. The hedge fund’s performance in the year 2003 and 2004 was good. The company was receiving compliments from its investors. The hedge fund had generated gains of around 22% as compared to the 11% return generated by standards and poor index. However, when the firm entered it had accumulated investments of around $1 million with just 12 employees including Leslie Brinkman herself. The company had a down quarter where it generated only 6% loss as compared to the 2% loss of S$P index. Leslie Brinkman was puzzled to see the decline and evaluated each of the funds’ investments in order to identify the root causes of the significant decline in the performance of the company. She considered a range of factors such as personnel inadequacies, flawed investment processes, shortcomings in the management style or deficiencies in the organizational design and formulation of the organizational culture in order to identify the causes for this low performance. Before the formulation of the hedge fund Versutia Capital, Leslie had worked in different organizations and seen different cultures. Now she believed that she needed to form a team based on team dynamics and she created her own process of designing the firm based on her maxims. Now the question is whether Leslie needs to change her management style or redesign her firm in order to address all the issues at Versutia Capital.
Analysis of the Case
Leslie Brinker man’s Management Style & Organizational Structure
Leslie Brinkman had built her own religion to formulate her team based on her own maxims as shown in Exhibit 1. She thought that she had acquired and seen enough in her past company’s culture that now she could formulate the culture in her own way. However, it was not sufficient to have the previous experiences in order to create a new culture along with a complete company structure. It could be seen that Leslie’s personality and her management style had a strong influence over the performance of the company. Even if an organization has established a well-structured system it is not necessary that the company would perform well, as the management style matters a lot.
Combined with the complexity of the tasks and the rapid growth of the company, Leslie’s hand on approach had fueled many problems in the organization. The organizational structure of Versutia Capital was simple with no formalization, authority centralized in a single person, low degree of departmentalization and wide spans of control. Apart from this, the current reward system was also controlled by Leslie and the performance of the employee’s work was hindered too much due to the ambiguous requirements for work and lack of oversight by any senior personnel. This structure made the business environment difficult to be handled by Leslie as the company grew. This created an environment under which the employees lacked the perceived trust and the simplicity of the environment created a bottleneck within the organization. The centralized decision making authority on the part of Leslie created ineffective leadership and inefficiency in the work of the hedge fund. For instance, one of the analysts was pressurized to loom over many industries and that he had lost sense of work specialization. Another analyst, Peter Wilson complained that he had to spend three months to train and teach the fundamentals of working in this field to a new analyst that was recently hired.....................
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