For each of the four intervention categories of human process, human resource, technostructural and strategic, identify a specific targeted intervention that may address poor culture in AMP.
Interventions are deliberate actions that disturb the status quo, to help an organisation increase its effectiveness. For each of the four intervention categories of human process, human resource, technostructural and strategic, identify a specific targeted intervention that may address poor culture in AMP. Ensure you also specify the level of the change target and depth of intervention for each recommended intervention. (10 marks – 1000 words)
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Case Study: AMP
Introduction
In August 2020, media headlines in Australia named and shamed AMP as a corporate bully and warned it is “a company that kills careers”. The vehicle for this reputational crisis is a culture of sexual harassment and sexual discrimination, which has dogged AMP for over 20 years and continues to do so in 2021.
The spotlight on AMP’s culture and leadership was red hot in 2020 after a public outcry by staff and shareholders on the appointment of Boe Pahari to the top job of CEO at AMP Capital (AMPC). In 2018, Pahari allegedly sexually harassed a former employee at AMPC, Julia Szlakowski, and was penalised by AMP with a 25 per cent reduction in his annual bonus, which amounted to $500,000 (Khadem, 2020). But despite that transgression, Pahari’s promotion was sanctioned by the AMP Board, which was intent on driving up profits, after the disastrous Royal Commission of 2018. (NB: The Royal Commission found AMP had misled the corporate regulator multiple times over the charging of customers for “no advice” (Gardner, 2018), and the company’s profit/dividends plummeted in 2019).
To staff and shareholders the issue around Pahari’s promotion was not money, but morality. Industry analysts savaged the company’s choice stating it was indicative of the way AMP operated: “The company went from being an inward looking mutual that existed for customers, to a profit-hungry beast focused on expanding globally” (Grieve & Knight, 2020). And according to Schmulow (2020) its focus on money over trust is central to the failures and scandals that have trashed its reputation and share price. Schultz (2020) argued that for AMP “cash is key” and its response to the outcry against Pahari revealed the board’s narrow focus. “They were managing the shareholder risk but not the rest of the risks … In their minds, it’s all in the dollars and cents,” said former executive director of the Australian Institute of Employment Rights, Lisa Heap (Schultz, 2020).
The problem is not just one of strategy, it is also AMP’s organisational culture. To understand AMP’s systemic cultural problems, Grieve and Knight (2020) provided some context. In 1998, the then CEO, George Trumbull told his top ten male executives at a lunch meeting, that a recent delegation of women executives had nominated sexual harassment and sexual discrimination as the biggest problems in AMP, and “five of the biggest offenders were seated at that table”. And in 2003, as his three-year reign as AMP chairman was drawing to an unceremonious end, a bitter Stan Wallis complained to close associates that “this company destroys people”.
Company Structure
Founded in 1849, AMP is a wealth management company with a growing retail banking business and an expanding international investment management business. It provides retail clients with financial advice and superannuation, retirement income
and banking and investment products. AMP also provides 1) corporate superannuation products and services for workplace super and self-managed superannuation funds (SMSFs); and 2) institutional clients with investment management services across a range of asset classes, both in Australia and globally.
A brief summary of AMP’s divisions is provided below:
AMP Wealth Management (AMPWM)
AMPWM assists clients to save for, and live well in, retirement. It facilitates this through extensive retail and workplace superannuation products, and self- managed superannuation funds services, as well as retirement income solutions and investments for individuals.
AMP Bank (AMPB)
AMPB provides clients with residential and investment property home loans, deposit and transaction accounts and SMSF products. It also provides loans to AMP-aligned financial adviser practices. AMPB clients have access to AMP Bank products via a variety of channels including digital and online, phone, through AMP financial advisers and home loan brokers.
AMP Capital (AMPC)
AMPC is the investment arm of the AMP Group of companies. As part of the AMP Group, it shares a heritage that spans almost 170 years. It has more than 250 investment professionals in 19 locations around the world (with a large presence in Australia) working collaboratively to share the latest insights and discover the best possible investment opportunities for its clients. AMPC’s strength in Australia and New Zealand has facilitated growth internationally, and today it operates in Dubai, China, Hong Kong, Singapore, India, Ireland, Japan, Luxembourg, the United Kingdom and the United States. Working with a network of global investment partners, AMPC leverages shared capabilities to provide greater access to new investment opportunities. It operates across all major asset classes, with a particular focus on real estate and infrastructure. Its asset class specialists, investment strategists and economists manage AUD$189.8 billion in funds under management across a range of single sector and diversified funds.
