by Mike Profeta, Shankar Tripathi, Vishal Gandhi, Aditya Bothra, Rajeev Rewari
(Almond Brownies- Fall 2007)
Bloomberg LP is one of the premier financial news and data companies in the world. Its mission is to offer businesses and individuals alike the tools needed to succeed in a modern, global economy. Simply put, Bloomberg is about information: “accessing it, reporting it, analyzing it and distributing it, faster and more accurately than any other organization” (Bloomberg.com). Based in New York City, it is an international business with more than 125 offices worldwide and is a constant innovator in the financial reporting industry.
Bloomberg LP currently owns approximately a 33% worldwide market share in financial data reporting. Its main competitors are Thompson-Reuters Group and Dow Jones Newswires. Bloomberg LP was originally founded in 1981 by Michael Bloomberg, along with a few other partners. After being let go from Salomon Brothers Inc., Bloomberg started Bloomberg LP, formerly known as Innovative Marketing Systems. The company has since blossomed to become the largest name in financial news reporting. Although Michael Bloomberg has left the firm and is now the current mayor of New York City, he still owns a significant stake in the company.
Bloomberg’s core product is its famous Bloomberg Terminal. The terminal displays real-time financial data and information through a multitude of interfaces at a subscription price of $1500 per month. In addition to its analytical features, users can make trades or message other terminals through a worldwide network. Many financial institutions utilize several of these terminals at once which are constantly upgraded with additional features.
Originally incorporated to provide business professionals with economic information, Bloomberg has since grown into a media conglomerate. In addition to the terminal, the firm has also launched Bloomberg TV, a television network that broadcasts worldwide, 24 hours a day. It reports on relevant business and financial news, much like its terminal brother. Also, Bloomberg owns and operates its own radio station, 1130 AM-WBBR. WBBR broadcasts to the tri-state area and is also based in New York City. In addition to financial news, Bloomberg’s radio station features interviews with various industry professionals.
It seems evident that to compete in a modern economy, businesses are becoming more and more dependent on reliable and helpful information. As the financial reporting industry grows, Bloomberg LP is committed to the continuous development and maintenance of its products.
One can immediately tell from entering Bloomberg’s headquarters that the layout is in no way hierarchical as there are no offices or enclosed meeting rooms; all employees, including the CEO and the editor-in-chief, sit in long rows of terminal-laden desks. The surrounding is composed of an eclectic collection of modern art, exotic flowers, and twenty-two fish tanks humorously containing office furniture. All these characteristics sum up to an ambiance that Sachin Sawhney, a current employee, described as "Google-esque," minus the gym and dry cleaning service. Indeed, the Bloomberg offices with their vast empty spaces, colorful décor and inherent transparency make for a culture that both insiders and outsiders alike term as "cultish" and "edgy."
Bloomberg tracks and makes public all information concerning an employee's professional life in order to monitor individual employee activity, instill transparency and strengthen lines of communication. Accordingly, all Bloomberg employees are expected to wear ID badges not just for security reasons, but for observation. This record of "badge ins" and "badge outs" of an employee along with the time and location is displayed on their personal profile page, available to all Bloombergers around the world. Thus, your obscene two hour lunch break will be posted for all to see. Employees find the ID badges not so much of a tracker of employee activity, but as another way to make all employees approachable and induce greater camaraderie at the workplace. In addition to personal webpage, all employees have access to a dedicated communication system that consists of the quintessential email system, chat network, and a video conferencing service which allows employees to have a face-to-face conference call with anyone, domestically or globally, without leaving their seats. But the two features that employees find the most unique are the calendar function and the slide shows. The calendar function, in keeping with the theme of professional transparency, allows all employees to access each others monthly schedule of meeting and appointment. The slide shows that can be found throughout Bloomberg via projector screens, display upcoming or recent employee birthdays, anniversaries, notable community service efforts, promotions and pictures. A combination of these features at Bloomberg make for a sophisticated network of formal and informal communication systems.
Bloomberg’s culture is perhaps most reflective of it namesake and founder, the current mayor of New York City, Michal Bloomberg. But this is not surprising as Edgar Schein writes in the article “The Role of the Founder in Creating Organizational Culture” an organization’s “founder simultaneously creates such a group [of people] and, by force of his or her personality, begins to shape the group’s culture.” In his role as the single largest equity owner and founder, Mr. Bloomberg does have “a major impact on how the group solves its external survival and internal integration problems” in an industry that is known for its competitive environment. (Schein) Mr. Bloomberg, a well known and active philanthropist, also has his company compensate employees well with a bonus based compensation system. Like Mr. Bloomberg, a self proclaimed workaholic, Bloomberg LP employees complain of a punishing work schedule as both present and former analysts say 14-hour days are routine. Even Matthew Winkler, the editor-in-chief of Bloomberg news, arrives at work at 6 AM and stays back till 7 PM on most days. Given the importance of up to minute news updates in financial markets today and increased competition, it is not surprising to witness long coffee-fueled days in the office.
There a many perks and rewards built into a highly lucrative pay package at Bloomberg. Full-time writers with only a few years of experience can make more than $90,000 a year while financial analyst have a base salary upwards of $60,000, making Bloomberg a hot employment target for many graduating seniors. Aside from monetary compensation, Bloomberg has a program of perks including free dining hall and snack rooms. The menus are diverse and keep employees "well-fed and satisfied," and more importantly allow Bloomberg to increase productivity by keeping them indoors. In addition, Bloomberg offers all of its employees a Health and Wellness Plan which consists of medical, dental, and life insurance, a comprehensive retirement and savings plan, a tuition reimbursement program, and a host of discounts and reimbursements. There is a dedicated service center at work for employee calling to respond to everything from the occasional coffee spill to the weekly headaches. All of the above come standard as a Bloomberg employee, but many other rewards are given out for good work in the sales, news, and broadcast division. One such example is a prize called the “Blingberg," given to the top New York City salesperson.
Bloomberg employs a hybrid culture—a combination of market and clan culture. It demonstrates qualities of a market culture because of the emphasis it places on individual performance in its sales division; the more platforms that a representative sells, the higher his or her bonus. In this case, it can be seen that there is a strict contractual relationship, mutual short-term commitment, a "lean" normative structure, and individual initiative. Bloomberg is also in many ways a clan culture because there is a fraternal relationship among the employees, collective initiative, and a deep sense of tradition and style.
Bloomberg lets its employees know what is expected of them while at work, illustrating a control-based culture where employees have set rules and regulations, reinforced by constant supervision. The 363-page guide authored by Matt Winkler, delineates everything that merits the Bloomberg name. This set of norms and assumptions are most relevant to those within the quickly expanding news division. Among the more well known qualities promoted by Mr. Winkler is writing in a style "that a dope can understand and a professional can appreciate." But most importantly, Bloomberg News abides by the basic rule of "the five F's," that is, "first, fastest, factual, final, and future." In keeping with the high degree of change that is the cornerstone of the information industry, any employee that feels that they are lacking in a particular field are referred to training. Training is constant and ongoing in every team at Bloomberg, as all employees can enroll in Bloomberg University, an online learning resource, to improve their knowledge across a multitude of subject areas. Bloomberg also assists in funding job-related external training towards professional qualifications.
Bloomberg employs a strict system of "rigor and discipline" with importance placed on delivering substantive information, often times a rarity when even ancient industry stalwarts such as The New York Times and Chicago Tribune are moving away from such practices. Mark Fefer, who served as a Bloomberg editor for nine months, describes the work culture as being "obsessive-compulsive.” Many people do not fit into this culture and either choose to leave or are let go. The founder established a near-unbreakable rule at the company—once you leave, you can never return. This is direct evidence of the emphasis on loyalty within the organizational culture. A combination of these cultural foundations provide for a distinct competitive advantage within the industry.
Workplace intensity within the organization is somewhat countered by friendly co-workers and almost daily office antics. COO Lex Fenwick understands the tension that may be unintentionally created within the organization due to the competitive environment, and therefore takes every chance he gets to lighten the atmosphere. In February this past year, he celebrated the Year of the Pig by parading through the aisles behind dancers dressed as Chinese dragons. Former and current employees recount numerous experiences such as going out to eat at restaurants, watching Broadway shows, and late night work parties. These little efforts made by both employees and upper management are greatly appreciated by those in the company.
Bloomberg is a company that derives its profits largely from the number of platforms it sells and in providing top-notch technical support. Miguel Leonardo mentioned that it is well-known to those within the organization that "delivering an ever-improving product and backing it up with top of the line customer service" is the ultimate goal and the implied mission statement of the company. Often times this over emphasis on sales and technology leads to other employees within the organization getting left behind and consequently having lower morale. That's because Bloomberg has a compensation system that ties employee pay directly to the sale of terminals, or more precisely, to net installations, or "net installs." The concept behind this system is that everyone at the company should be driving toward only one goal: selling more Terminals. To highlight that point, large electronic signs hanging from the ceilings in the Bloomberg offices report progress on both sales and installations. Bells ring to mark a sale, multiple times if the news justifies it. Every year, virtually all Bloomberg employees get compensation—in effect, bonuses—based on how many net installs Bloomberg put on the books in the prior twelve months.
Bloomberg possesses a high-energy culture that allows employees to make faster inroads into the organization and foster growth. Lindsey Kemp, an employee within Bloomberg Tradebook, has been with the company for three years. Within five months, she earned a promotion to manager and was soon after awarded the “Most Valuable Player Sales Award.” During an interview, she asserted “I have learned a lot in a short period of time, mostly from coworkers. It is easy to just turn and ask the person next to you a question. Interaction here is based on the open environment.”17 Other employees made similar mention of the energy exuded by their peers, citing that they were able to feed off this energy and develop at a faster rate within the organization.
Equally important to note are cases of a management culture that is described by many ex-employees as being disharmonious and confrontational in nature. In an incident in 1993, two Washington-based reporters were labeled as ''Proud to Be Stupid’’ in the weekly employee newsletter written by Mr. Winkler after they neglected to return a call from another reporter in Princeton. The reporters’ behavior was described as shocking and opposite of what the news organization stands for. While Mr. Winkler has seemed less caustic in his reviews of employees, Mr. Bloomberg has always backed his right hand man for being a “perfectionist,” a characteristic that he finds praiseworthy let alone confrontational. Mr. Bloomberg's response to this letter is proof that Bloomberg instills in its employees to constantly work towards perfection
Transparency is a major theme of Bloomberg LP, but over the years it has had its share of controversies. While it is true that the company has been aggressive in hiring women, an effort launched by Michael Bloomberg himself, it has also witnessed more than three lawsuits concerning sexual harassment at the workplace over the past few years. Since the lawsuits, Bloomberg has implemented company wide awareness sessions on sexual harassment, which many company employees say is a marked improvement from the 1990s.
While there have been a few incidents in its early years, culture at Bloomberg has been a major driver of success within the organization since its early days and today continues to help it maintain its competitive advantage in the 21st century.
Formal and Informal Structure
Bloomberg strives to have a very flat organizational design with few levels of hierarchy. Cofounder Tom Secunda has stated “We try our damnedest to have as little structure as we can…there are no titles on our business cards, no mahogany.” Through our visit to Bloomberg’s headquarters, we found this to be very true. As mentioned, you will not see private offices or window seats; every employee sits lined up in identical desks. Miguel Leonardo, has noted that in his department it is not uncommon to see interns sitting directly across from their managers. As further proof of the lack of hierarchy, employees at Bloomberg are encouraged to speak directly to all levels of management. Indeed the company website boasts that “interaction is fostered at every level.” Lisa Kemp, a current manager, explains that “you can walk right up to the CEO’s desk to discuss a problem or just say hello and it wouldn’t be frowned upon.”
Despite having a lax murky formal structure, there is still some semblance of a hierarchy. Bloomberg employs a functional organizational design—at the top is Peter Grauer, CEO of the firm. Directly under him is an executive committee composed of Tom Secunda, Lex Fenwick, and Matthew Winkler. Below are the functional departments such as R&D, Sales, and Media. Within and between these departments, the use of teams is strongly emphasized. Teamwork adds to the image of equality that Bloomberg prides itself on and enhances operational efficiency. Furthermore, the use of cross-functional teams allows for an open system without a set hierarchy. In the article “Changing Organizational Models,” D.G. Ancona writes that if a “team is cross functional and tasked with addressing quality issues, it means that we have people from each key function, shared formal responsibility, etc” (Ancona 13). The notion of teamwork is so strong at Bloomberg that “if an employee quits, he can never come back to work here. It would be like you let the team down and your loyalty is put in question.”
To compliment the flat and ambiguous structure of Bloomberg, employees do not stay in any one position for too long and do not have official titles. Managers are constantly rotated between different departments—sales to analytics, analytics to HR—and therefore, employees usually have several bosses during their tenure. The structure is a meritocracy, where individuals are evaluated solely on their performance. This allows for employees to move vertically, horizontally, and diagonally throughout the firm. However, to add to the disarray, salary levels are not always indicative of upward movement in the organization. Sachin explained “I recently got a promotion to manage a six man team and saw no increase in pay.”
It is easy to see how this seemingly chaotic and volatile structure can be confusing and how it may hamper meeting organizational objectives. However such a design does have redeeming qualities. Having managers rotate through roles ensures that many individuals are skilled at the position, creating a safeguard should the current manager leave. This increases flexibility, adaptability, and Bloomberg’s capacity to cope with a changing environment. As noted in the aforementioned article, in a flexible organization “managers are often working on several projects or teams simultaneously. Developing the skills of multitasking—of managing one’s time and commitments so as to be able to work efficiently at several tasks—can be crucial to survival in a firm” (Ancona 14). At the personal level, continual movement spurs innovation and keeps employees excited and on their toes, thereby increasing Bloomberg’s productivity and overall morale. As another effect, Bloomberg’s management is very in-tune with what is going on in the company, allowing for the frequent interaction at the different hierarchal levels.
It should come as no surprise that Bloomberg’s informal structure mirrors its formal structure. The company’s flat configuration, comprised of cross-functional teams, overlaps with its social web. David Krackhardt, in the essay “Informal Networks: The Company Behind the Chart” illustrates that this quality is optimal. He tells us that “highly adaptive, informal networks move diagonally and elliptically, skipping entire functions to get work done” (Krackhardt 192). As we see with Bloomberg’s formal structure, where employees rotate between many different departments all in a relatively flat environment, we also see a very dynamic and fluid social network. Former employees Miguel and Christopher Chung explain that the friendships and bonds they formed while working at Bloomberg continue outside of the workplace. While they sat next to a VP on one of the lined-up identical desks, they would communicate about a myriad of topics, both work- related and personal. The ease in which employees can communicate with each other certainly facilitates Bloomberg’s operations. But not just any type of communication is optimal; David Krackhardt insists that “quality” communication is more profitable than having just “more” communication. He continues by stating that “two-way communication between people of all levels” is the most favorable. (197). Informal communication, as with 360-degree feedback, contributes to employee performance and morale.
In terms of trust, Bloomberg LP can be likened to a well-oiled machine. Its organizational departments are the different parts, the employees are the fuel, and the strong sense of trust is the grease that makes it all run smoothly. The importance of trust is elaborated in Krackhardt’s essay, where he narrates an example of the detrimental effects of a weak trust network. He explains “a weak position in the trust network was a main reason for the task force’s inability to produce results” (195). Bloomberg LP does not have this problem, in that entire task force is a part of the trust network. As previously mentioned, employee schedules are posted on every terminal, further espousing the importance of transparency.
Strategy and Stakeholders
As the market continues to move at a fast pace in a stressful environment, information and research must be going along the same speed. Efficiency and accuracy are a must, and as investors continue to grow in today’s market, Bloomberg must continue to excel. It is clear that stock exchanges are moving away from trading pits to more competent and accessible computerized systems, and this is where Bloomberg is dominant. They have provided cheaper, more reliable, and less timely options for traders who work in a very fast-paced environment. Clearly, this is the audience that Bloomberg LP caters to, and as they continue to adapt and develop their processes, the future certainly looks bright.
Some factors that have affected this shift in the environment stems from the fact that there is much more data and information that is available and needed today than the past. Since the Internet era, information can be accessed 24/7 at the click of a mouse, and this is where Bloomberg is able to flourish with its experience. The company prides itself in its tremendous customer service and up-to-date news feeds. This has saved traders millions of dollars as even a split second delay can cause an uproar in a trader’s world. With its high bandwidth speed, Bloomberg is able to send information publicly in less than a second.
Another area that Bloomberg prides itself in is its security measures. In today’s society, it is extremely important to maintain a very high security system as hackers are always on alert which can cause severe downtime to a system. This downtime as previously mentioned can have a very negative effect on Bloomberg’s reputation. As well as security, Bloomberg also provides very reliable information from reputable sources, which makes it much more trusted than its competitors. The amount of analytics supplied truly separates Bloomberg from its competition, as the famed Bloomberg Terminal encompasses a great deal of financial news in a variety of categories such as bond rates, commodities, and derivatives.
It seems evident that Bloomberg has done a remarkable job on implementing changes in this evolving environment. It is also important to note that Bloomberg understands that while updating their technology is important, they must provide information and research for users who are not familiar or comfortable with newer applications. Through customer feedback, Bloomberg is able to cater to all, setting up more traditional screens that older bankers are more accustomed to. Another positive use of feedback comes from an incident in the 90s, where Bloomberg began installing mouse support. Many older traders were unfamiliar with this then-new technology, and were unhappy with the results. Using customer feedback, Bloomberg recognized that this feature was not a growing norm, and instead, further developed keyboard shortcuts, which is still being used today.
In terms of resources, Bloomberg is supported very well in a myriad of aspects. Being founded by billionaire Michael Bloomberg has provided huge financial capital, and while Bloomberg has left the company, he still has a majority stake in it. In addition to financial capital, its social capital is overwhelming, as Bloomberg hires the best and brightest from the some of the most prestigious firms and colleges in the country. Due to this, its reputation is outstanding, as it has slowly become the standard of the industry.
The primary stakeholders of Bloomberg LP would be those who use Bloomberg services like the Terminal. In addition, companies who use this product as well as investors who find information due to Bloomberg’s research are considered primary stakeholders. Bloomberg offers their research to over 350 newspapers and magazines worldwide including The Economist and The New York Times, so primary stakeholders are great in number. Secondary stakeholders would extend to the government and media, who are constantly watching over Bloomberg’s products, yet have an indirect influence upon the company.
It is important to note that stakeholders do not play as large of a role in a company such as Bloomberg LP because it is private. Nonetheless, as Grant Savage’s Strategies for Assessing and Managing Organizational Stakeholders states, “The more we can begin to think in terms of how to better serve stakeholders, the more likely we will be to survive and prosper over time” (Savage). To better understand the nature of stakeholders and how to appropriately allocate resources, it is important to divide them into four major categories. The first would include supportive stakeholders, those individuals who support the organization’s goals and actions. Within Bloomberg LP, clients such as analysts and traders would be considered to be supportive stakeholders as well as subscribers to publications featuring Bloomberg’s research. However, not all stakeholders of the company are so supportive, as seen by the non-supportive stakeholder, who does not support the organization’s actions. These would include competitors such as Thomson-Reuters and Dow Jones NewsWire. With such stakeholders, it is important for Bloomberg to defend itself to prevent any threats or market loss (View Exhibit C in the Appendix).
The third category of stakeholders is mixed blessing stakeholders, individuals who can either support or oppose the organization’s actions. Because of this, they have a high potential to either threat or cooperate with the company. Mixed blessing stakeholders deserve a high strategic importance, and it is important for Bloomberg LP to continue to collaborate with these individuals, to ensure high cooperation. In regards to Bloomberg, employees, prospective clients, and Wall Street would make up mixed blessing stakeholders. Employees can have both negative and positive influences, as well as prospective clients, who have the option to purchase Bloomberg services, or flee to a competitor. In addition, Merrill Lynch would be considered a mixed blessing stakeholder, as they own a 20% stake and have an outside influence on the decisions of the company.
Lastly, there are marginal stakeholders who are neither especially threatening nor cooperative. It is important for Bloomberg to monitor these stakeholders, but because they are almost a non-factor to the company, they are of much lower strategic importance. Those who have a passive interest in finance would be considered marginal stakeholders, as well as New York City. As the financial capital of the world and the location of the company’s headquarters, the city is a stakeholder with little influence.
With a company such as Bloomberg, the dominant figure in the financial news industry, it is natural that certain threats to eventually pose, one in which being the prospect of new entrants. While there are several companies in this industry with a solid foundation, Bloomberg recognizes that banks may eventually have the power to create an in-house system. As the New York Times states, “The biggest threat to companies like Bloomberg is most likely to come from their own large customers: Banks and brokerage houses may develop their own internal systems that render Bloomberg's higher analytic functions superfluous” (Barringer). To combat this, they must continue to maintain their reputation in creating a strong product identity. Bloomberg LP does not want potential consumers to even think about which service should be sought after in terms of financial news, as they are the symbol of the industry. However, there is a natural barrier to entry, as there are high switching costs, both monetarily and in ease of use. Traders will be hesitant to move away from a familiar system that has provided success in the past. It is important to include that with NewsCorp’s acquisition of Dow Jones, owner Rupert Murdoch, a solidified figure in the news market, may also try and improve upon Dow Jones NewsWires’ current system.
Another potential threat that Bloomberg could face is a decline in the US market. IMF World Economy Outlook reports that the GDP of both Europe and US is expected to slow down during late 2007 and into 2008. Another obvious threat is technology failure, as the company depends heavily on a variety of electronic systems. Break-ins or sabotage could lead to disaster at Bloomberg, as any type of hacking or computer virus would create a slow operating system.
Bloomberg also faces great opportunities in the near future, mainly developing markets outside of the US. Currently, the company does not have as strong of a stake in the emerging markets as does its competitors, but there is great potential. It appears that the US market is already saturated as many institutions already run on Bloomberg, so the company should begin looking into these developing markets. As Grant Savage wrote, “competition in the 21st century's global economy will be complex, challenging, and filled with competitive opportunities and threats” (Savage). It will be interesting to see if Bloomberg is able to respond to this competition.
Other opportunities in sight would include the recent acquisition of Brainpower, a specialist software company that could help Bloomberg’s inadequate investment management division. In addition, a consortium of banks including ABN Amro and JPMorgan signed an agreement to form a new company with a multi-banking electronic trading platform that would improve upon their already excellent system. This agreement should help Bloomberg’s brand image within these firms.
An agreement with NumeriX, the leader in pricing and risk analytics of fixed income is also a great opportunity. Using these new analytics, the Bloomberg professional calculator should be extremely efficient and beneficial. More importantly, the functionality of the new feature should satisfy many customer demands, as it will drastically improve upon the current Microsoft Excel templates. NumeriX’s flexible capabilities will truly have a lasting impact on Bloomberg.
Bloomberg LP is an extremely philanthropic organization embodied by Michael Bloomberg, who donates millions of dollars every year to a wide variety of causes, such as educational institutions and medical research. This money comes from his own personal fortune, family foundations, as well as his company’s profits. According to the Chronicle of Philanthropy, Bloomberg donated $138 million in 2004, $144 million in 2005 and $165 million in 2006. In the last year, recipients included the Campaign for Tobacco-Free Kids; Centers for Disease Control and Prevention; Johns Hopkins Bloomberg School for Public Health; World Lung Foundation and the World Health Organization.
According to The New York Times, Bloomberg has been an “anonymous donor” to the Carnegie Corporation each year for the last several years, with gifts ranging from $5-$20 million. The Carnegie Corporation has distributed this contribution to hundreds of New York City organizations ranging from the Gilda’s Club, a not-for-profit organization that provides support to people and families living with cancer, to Publicolor, an organization that aims to improve education in youth by promoting an imaginative use of color in school buildings. Due to his charitable contributions, he was ranked seventh in the United States in philanthropic endeavors.
Michael Bloomberg’s philanthropic initiatives have flowed through the company as well. In the article “Strategy & Society: The Link Between Competitive Advantage and Corporate Social Responsibility”, Michael Porter states that “broadly speaking, proponents of CSR have used four arguments to make their case: moral obligation, sustainability, license to operate, and reputation” (Porter 81). Bloomberg LP seems to exhibit all of these characteristics through its philanthropic efforts. The company has a charity program, known as Best of Bloomberg (BOB) that runs year-round for employees to take advantage of. This database of programs and events is available through Bloomberg terminals by simply typing in keyword BOB. As evidence of the philanthropic culture at Bloomberg, these programs have high employee participation and are generally full to capacity. The organization sponsors and donates money to everything ranging from the recent typhoon in Bangladesh to charities such as New York Cares and New York Red Cross.
Most of the philanthropy that happens at Bloomberg is not well publicized, in contrast to Michael Bloomberg’s initiatives, which are more transparent than his company’s. Bloomberg LP’s philanthropy takes place more in the form of employee involvement and volunteering. For example, summer interns are required to participate in volunteer programs at elderly homes and daycare centers. It’s also important to point out that most of Bloomberg LP’s efforts are “Generic social issues that may be important to society but are neither significantly affected by the company’s operations nor influence the company’s long-term competitiveness” (Porter 85). For this reason, Bloomberg follows a model of Responsive CSR in that the company does not donate for strategic reasons or for future benefits.
However, it’s rather difficult to assess the social efforts affect the company. Porter further states that “the social impact achieved, much less the business benefit, is hard to determine” (Porter 83).
Recommendations and Future
The organizational structure that Bloomberg currently uses allows its employees to receive a considerable amount of formal and informal feedback; managers work side-by-side with many employees and employee teams. This system has many benefits as more feedback can improve productivity, however the excessive overhead could be inefficient and strenuous. Employees can be over managed to the point where the office can seem like a prison: facing constant criticism and advice could eventually lead to unsatisfied employees and less employee empowerment.
However, one of Bloomberg’s greatest assets is its team-oriented culture. Eliminating the team system would be too radical a shift for a company who has used its current structure to garner a significant market share. Alternatively, increasing employee innovative power on projects could bring a self-managing workforce, one of the seven characteristics of a well managed company. By allowing employees more creative powers, the superfluous managerial overhead would be removed, while allowing Bloomberg’s current team system to remain intact. The increased employee empowerment would bring a happier, more intriguing work atmosphere.
Michael Bloomberg was the founder, facilitator, and visionary for Bloomberg LP. His personality and charisma are still evident in the company today, years after he left to become the mayor of New York City. When Michael Bloomberg left the company, he took more with him than just his leadership style. A slice of the culture was removed from the workplace as well. Several of our interviews stated that the general consensus around Bloomberg LP was that the workplace was much more interesting, not to say less effective, when Michael Bloomberg was present. The culture change, while neither radical nor complete, was indeed sudden and unforeseen. The company’s new leaders have tried to instill the same beliefs and values as Michael Bloomberg, however, according to Sachin Sawhney “nothing is as good as the original.” This created a tension in the workplace that still remains today.
Bloomberg LP was likely mistaken for believing that the workplace would remain unchanged after the loss of its influential head. While upper management may not be able to detect the change in atmosphere, the average employee feels the burden much more. A good way to rectify this would be to increase employee feedback in the company. The 360 degree feedback system attempts to incorporate everything around the employee – work relationships, clients, managers, team-members etc. This provides a more accurate and objective view of both performance and the work environment, and would therefore be very beneficial for Bloomberg.
Allowing all employees to freely and anonymously reflect upon the company’s current position would give management a greater understanding of the firm’s actual position. Employees would have the correct platform to express their personal views. Not only could this lead to greater understanding, but possible innovative measures could be adapted to Bloomberg LP based off of employee recommendations. This again plays on the concept of employee empowerment—allowing employees more responsibility would give more weight to each position. With the actual position of the firm in hand, the gap between the espoused and the enacted strategies could be narrowed.
Bloomberg LP currently employs a very casual atmosphere—bottles of alcohol can be found in some conference rooms and the company has had a rough history with swearing and sexual remarks. Low-level employees are not afraid to ask for manager feedback and confrontation in the workplace is high. Its flat and informal culture allows the company to flourish in the US market; however, the global economy represents significant business uncertainty. It has different needs and demands compared to the domestic one that Bloomberg has grown accustomed to.
The loose work environment is usually better suited for a small growing company where employees need quick interaction with superiors. As Bloomberg moves onto a world scale, a more direct and formal system of interaction would be better for handling uncertainty in a fast-paced global market. Bloomberg LP has thousands of employees worldwide; the way the structure is set up would eventually lead to unorganized and inefficient lines of communication as the company continues to grow. Decisions need to be made quickly and enacted effectively. A large company like Bloomberg will have trouble keeping up with increasing demand if the structure remains loose—making the work system more vertical would make the company better suited to handle the pressure of competing globally.
The market for financial information and data companies is growing every day. Globalization means the world is becoming more interdependent, especially in the financial markets. Bloomberg LP, like many of its competitors, is looking to expand its business operations outside of the United States and onto a global scale. The industry itself is being revolutionized as the world economy becomes more and more intertwined. Bloomberg LP is already a worldwide organization; it has offices around the world and broadcasts media in many different countries. However, its loose and informal corporate culture could become a problem as the company tries to compete on a global scale.
The future holds many challenges and possible changes at Bloomberg LP. As financial exchanges around the world, from commodities to futures, evolve into a digital marketplace, electronic trading functions will play a key role in shaping Bloomberg's future success. The company's rapid development in the past can be attributed to its willingness to explore new opportunities, its superior attention to customers, and its ability to foresee the direction of the industry. Bloomberg’s success in the future will depend on more of the same, backed by a supportive and innovation-driven management. While rumors of a possible IPO or a buyout by hedge funds or private equities have circulated for sometime, there are no plans in the near future to sell off the company. According to employees, "Mike is way to proud of the company as his brainchild, and the employees don't want anyone but Mike." Recently, even Microsoft has expressed interest in buying the company, but some feel that if it were to merge with anyone, it should be Google, given the similar synergies the two companies share. However in the short run, Bloomberg will remain a solitary entity that continues to feed the ever-hungry financial world with up-to-the-minute data and analysis.