Fight at Investment Club

Description

Big macs cause more than obesity; they can also cause groups to divide and people to collide. The Golden Years Investment Club, started by Lenn Width, the septuagenarian leader of the group, whose 34-year track record with Golden Years had led Business Week to call him "a dazzling role model" for individual investors is a collection 26 investors made up of professionals, retirees , and homemakers. Their objective is to buy and sell stocks as a cooperative. The process is a simple democratic process, where every member gets to make proposals and then vote. There are rules in place to limit liability and risk. A stock must have been publicly traded for at least five years; its sales must be growing by 15 percent a year; and it's got to have a return on equity of 10 percent or better.

David Korn, a young and enthusiastic investor thought there was no better way to start dabbling in the market than to join an investment club. After answer an ad and attending an investment-club seminar hosted by Lenn Width he inquired about club recommendations and received and invited from Width himself to join his club. Korn like most of the club members quickly realized that while there was a democratic system in place, Width made all the final decisions for the club. As such, Korn challenged width at first unknowingly and late intentionally. Korn wasn't afraid and was not afraid to speak up which drew some attention, especially from Width who didn't appreciate be challenged. Waiting for the opportune moment to petition to have Korn exiled from the group, Width found it when Korn, on the heels of another investment argument, also suggested that the club's current note-taker be replaced by himself. While Korn was never popular with Width, the other members liked the current secretary and began questioning whether Korn's objectives were consistent with the rest of the group or whether he was a liability. This was the opportunity Width needed; he was not ready to let a new and younger investor come take over "his" investment club. Width conducted a secret meeting to make his case against Korn and eventually held a vote resulting in asking Korn to leave the group.

Diagnosis

As the founder of the group, Lenn Width considered himself the owner and head of the Golden Years Investment Club. The club ran the way he visions and he received outstanding reviews by Business Week for it calling him "a dazzling role model" for individual investors. Width's power however didn't come from a group coconscious; it was almost an intimidating snatch of power from the other member's which challenged width until the unknowing David Korn joined the club.

The club had established over the last 34 years an organizational culture. "Collective behavior of humans that are part of an organization, it is also formed by the organization values, visions, norms, working language, systems, and symbols, it includes beliefs and habits." Not everyone agreed with Width on every decision but deferring final say to Width was just the way the way things were done and the members were all accustomed to that way. Unaware of the organizational culture, Korn found it difficult to adapt and adhere to the way things were done. This created conflicts within the club member amongst its members causing some members to quite, stop attending meetings, or take sides which divided the group.

Critical Theory

The organization theory, conflict within organizational culture applies to this case study. People don't stop being people at when they join an investment club, conflict is inevitable. Organizational conflict theory says there are several varieties of conflicts within a group,