Standard Financial Services

By Jeffrey Pfeffer, Thomas D. Dee, II
2004 | Case No. OB25
The executive VP of administration of a diversified provider of financial services and products was alarmed over escalating costs for personnel within the data processing department. This department had performed well and had grown tremendously over its 25 years, increasing both in amount and scope of activities. While its services were not chargeable to the company divisions, no single division would be able to operate without it. The VP for data processing had been in the firm as manager of the department for 2 years. She argued that the whole company would shut down if her department stopped working, and multiplying responsibilities, coupled with the need to solve a number of problems created in the past, made it necessary for the continual budget increases. The executive VP wondered if he was being blackmailed. Was it a power play? How could he get out of the mess?
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