Case Study #4 Analysis: AMEX Discussion And Analysis Of Case

CASE STUDY #4 ANALYSIS: AMEX
Name
Course
Date
Introduction
By 1977, American Express Corporation (Amex) had reported thirty years of increased earnings ‘record’. When James D. Robinson III had become the CEO and chairman in 1977, he sought to maintain the record. Fireman's Fund insurance unit was struggling in the 1970s and in 1983 the division reported losses amounting to $ 452 million, and Amex was forced to provide $230 million capital (Buller & Schuler, 2006). Lou Gerstner became an executive vice president after Robinson joined the firm and oversaw activities at Shearson Lehman Brothers. The American International Bank division also performed well while the Travel Related Services (TRS) or card division continued being the best performing except for the express cards and travelers’ checks.
Discussion and analysis of case
After Amex acquiring and merged with different businesses such as Shearson, there were differences in management styles, which made it difficult to have a unified stance between the parent company and the acquired firms. Robinson focused on different strategies to improve operations with the first plan being seeking new lines of business and the second plan to revive the core business in TRS (Buller & Schuler, 2006). Diversifying operations was at first effective, but the lack of agreement on the best management style and strategy proved to be a problem. Robinson focused on Strategic decision making relying on a vision and strategy to grow American Express but made missteps.
Robinson expanded Amex in the financial services with the acquisition of Shearson but failed to create a unified strategy that the different executives believed in. Sanford "Sandy" Weill was one of the key executives who had left the company as it struggled and Robinson faced difficulties managing the team of executives increasingly skeptic...