JPMorgan and Bear Stearns: A Culture Challenge

Bear's "maverick" workers who don't lose their jobs will find a different workplace.


Employees cross the lobby at Bear Stearns in New York the day after JPMorgan Chase acquired the rival investment bank.

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JPMorgan Chase's Fed-led Bear Stearns bailout was intended to save the financial markets, but it remains to be seen if JPMorgan can save the firm. As the two banks prepare to merge, the collision of corporate cultures promises a considerable challenge for Bear employees.

It is certain that those at Bear who survive the merger—many are expected to lose their jobs—will have a different corporate culture to understand, says Jacalyn Sherriton, president of Corporate Management Developers, a firm that specializes in post-merger consulting.

The companies certainly have different histories. While Bear had managed to remain an independent firm throughout its 85-year-old history, JPMorgan Chase is the result of many mergers. Chemical Banking Corp., Manufacturers Hanover, Chase Manhattan, JP Morgan, First Chicago, and Bank One have all become one under the JPMorgan Chase name.

Bear Stearns's culture stood out on Wall Street, says Rick Peterson, a Houston-based recruiter for the brokerage industry. The firm catered to very high net-worth clients, and individual brokers were able to move quickly on clients' requests, he says.

On the other hand, like other U.S. banks, Peterson says, JPMorgan tends to be "extremely cautious, ultra-conservative," and bureaucratic. This, he says, is the main difference between the two companies: "JPMorgan expects its employees to do as told, when told. Bear Stearns brokers are not used to being told anything. They're used to doing the telling themselves."

The accomplishments or qualities that organizations reward in their employees tend to be very telling of their culture, Sherriton says. Some companies reward employees who toe the line, while others reward entrepreneurship.

Nomi Prins, author of Other People's Money: The Corporate Mugging of America, worked at Bear Stearns for seven years, and, in a recent story for Mother Jones, describes it as "a colorful place" that was generally considered by employees and outsiders to be a firm that didn't fit the mold. "It was the oddball amongst investment banks from the standpoint of 'corporate culture'—a 'maverick,' the Wild West of banking," Prins writes. "We actually left our desks to eat lunch. Some of the sales-force drank theirs."

In an interview, Prins said Bear's culture prized directness. "You kind of did things, as opposed to talked about doing things," she says. Her time at Bear was followed by a stint at investment bank Goldman Sachs, a place that—for better or worse—relied more on meetings. Prins withholds judgment of either culture but admits she never became totally comfortable at Goldman and suspects Bear employees may have a difficult time transitioning to another firm.

While some Bear brokers are looking to jump ship, Peterson says, others will stay at JPMorgan to test the firm's new culture. JPMorgan will continue using the Bear Stearns name and will keep Bear brokers separate from its own high-net-worth group, Bloomberg quoted an unnamed source as saying last week. Top Bear brokers were also offered a retention deal aimed at keeping them with JPMorgan.

Mergers can require such flexibility from employees that it's not unlike starting a new job, says Jim Stern, Sherriton's colleague at Corporate Management Developers and the consultancy's vice president. How staffers are held accountable can be a major difference between companies. Some employers keep workers on a short leash by docking pay and cutting bonuses, while others tend to be more laissez-faire. "Unless you're able to conform to that new culture of accountability, you're not going to be successful," Stern says.

The post-merger environment can be tricky to navigate for any company. Consider the much-watched YouTube video of a Bank of America corporate gathering in 2006, following the bank's merger with MBNA. An employee expertly croons U2's "One," albeit with somewhat altered lyrics. The verses, an awkwardly forced celebration of bank unity, include such feel-good phrasing as: "One spirit. We get to share it. Leading us all to higher standards."