JPMorgan Chase & Co. Sustainability Premortem

Word Count: 1,370 words

Introduction

Sustainability in a company, organization or business of any form is the holy grail of its operation and viability for future successes. The history of JPMorgan Chase & Co. spans over 100 years of business and 1,200+ predecessor institutions, to build this world business giant (“Who We Are”, 2022). While there have been numerous lessons to draw from a business perspective, there also have been challenges and drawbacks in the course of operation over the years. Being a financial institution with over 250,000 employees and operations in more than 100 global markets, JPMorgan Chase & Co. has asserted its dominance in business, relationships and success in shifting economies (Carney 2020). However, at this point, there have been substantial drawbacks to its operations, to the extent of the closure of several branches all over the world. Such actions taken by the board of trustees in a bid to protect all shareholders’ interests, come as a surprise to competing firms and the world. What might have caused such drastic actions to be taken? In this paper, we shall conduct an in-depth analysis of the social, economic and environmental factors that may have contributed to the same. Similarly, we shall also ascertain various actions that may alleviate the failure of JPMorgan Chase & Co. to such astounding levels through this premortem.

Reasons for Failure

Being a major financier of numerous business ventures all through history, JPMorgan Chase & Co. has garnered a substantial level of trust from its stakeholders and influence in diverse business industries. While the company prides itself in insuring the interests of its customers, the same may have posed as an impediment to sustainability in the changing world. Putting the customers first in the financial sector that JPMorgan Chase & Co. is majorly involved in, may bring a conflict of interest with regards, to profit against environmental protection and sustainability of financed ventures. While the overall goal of environmental sustainability is reducing the individual carbon footprint to ensure that only the required resources are utilized, Jackson (2022), JPMorgan Chase & Co. may be faced with the challenge of ascertaining whether to rake in substantial profits for their clientele or to avoid such major investments which pose major risks to the environment. In as much as such factors may seem minimalist in their singularity, advancing in such ventures for profit, while contingent on future donations to environmental-focused organizations such actions portrayed a nature of surrealism beyond logical thresholds.

While environmental sustainability and protection is a reasonable and noble cause, the consistent need for the management to assert and prove its actions through the acquisition of sustainability credentials for public display against the fundamentals of business operations may have adversely affected JPMorgan Chase & Co. (Grubb, et. al. 2015). These programs put a huge strain on the company financially and in operations since all decision-making had to go through unreasonable and rigorous scrutiny for aspects that may attract negative public opinion and scrutiny. Making the right assessments in business is essentially an important prerequisite to decision-making. However, when such actions are taken in a bid to please the public, yet affect the economic standpoint of the company, workers tend to lose morale and the organization takes a steady and exponential decline. Instead of focusing its efforts on researching more economically-friendly ventures for the company to capitalise on, these efforts were directed at ensuring that certain environmental standards were ensured. In the long run, there was a decline in primary incomes resulting in the pulling of resources from the firm by major clients. This sporadic occurrence cost JPMorgan Chase & Co. in potential earnings and a decline in customer confidence.

The organizational culture created, fostered and perpetuated by JPMorgan Chase & Co. has been in application for numerous centuries. Save for the various tweaks and edits over time, there have been no major changes. From 2022, the workforce has seemed to shift in perspective from the initial notions of loyalty to the firm as was initially appreciated (Kurucz, et. al. 2017). New and young personnel have seemed to be more interested in the value and loyalty that the firm offered to them. this perceivably whimsical workforce could be relied upon to work under pressure provided that the returns on their time and effort investments were not compensated for similarly. As such, there was an extensive loss of personnel due to resignation. Reasons provided for such actions by previous workers seemed to resonate with the fact that they saw no value compensation on the part of JPMorgan Chase & Co. for their numerous work hours and dedication to the job. It was also noted that the company constrained its personnel to a certain set of methods which; in the opinion of the personnel did not work in the present markets and seemed too complex and obsolete for them to implement.

Quintessentially, they opted for more liberal-tailored positions in companies that had a hybrid organizational culture that allowed adaptation to the trends.

Actions to Avoid Failure

While customer interests and concerns are essential, environmental sustainability and protection are a matter of global concern (Gannon & Hieker 2022). The company should have set certain standards and measures that prevent an opportunity cost assessment for further business ventures and operations. It would serve the interests of all stakeholders better if the company operated on a specified and stipulated charter of interests and ventures through which the decision of what’s or what not would be easier handled. The consistent indecision and preassessment of business ventures to be undertaken that would not have a cataclysmic impact on the environment would preserve more time for the discussion of new ideas to rejuvenate and improve their ongoing businesses.

COVID-19 should have given JPMorgan Chase & Co. the unrequited but much-needed jolt to the reality that no matter how big the firm was, unpreparedness for such eventualities may result in the foreclosure of some businesses that the company handled. Public opinion is ideally not a subject of great concern to a company such as JPMorgan Chase & Co. If handled correctly through proactive personal relations (PR) strategies, there would be no need to halt operations for the sole purpose of assessment and reassessment of the environmental implications of business ventures by the company (Porter, et. al. (2019).

JPMorgan Chase & Co. need to be prepared for scrutiny and negative public opinion by radicalist entities who may have been somewhat affected by the company’s business activities. To maintain sobriety in decision-making and take economically-favourable actions for all parties involved, the company needs to collate the efforts of the various teams without a cessation of monitoring economic trends and opportunities for the company (Crawford & Joler 2018).

With a changing workforce, comes the need for research on the behavioural and social activities of such persons (Austin 2021). Considering that the company was formed over 100 years ago, and has gone through numerous exchanges in leadership, there arises the need to acquire knowledge on the workforce pool. Knowing the whimsical nature and self-perception of personnel, JPMorgan Chase & Co. would have been better prepared at offering its workers an environment that allows for such benefits. The need to update the methods of performing the various job descriptions in tandem with the shifting trends is also essential since the market base is shifting as well. In essence, a complete overhaul of present systems should have been done to cater for similar interests and needs.

Conclusion

The essay has demonstrated that social, economic and environmental interests have a stake in the sustainability and overall success of a company in the shifting world. While interests and marketing methods have substantially changed with the influence of social media, the perspectives of potential new employees have changed as well. The need for a more current structure and proactive system begs the need for similar firms to adopt it for the benefit of future growth, development and sustainability.

References

Austin, D. (2021). Win-win in the Time of Net Zero: A Tale of Two Sustainabilities.

Carney, M. (2020). Mark Carney on how the economy must yield to human values. The Economist. April, 16.

Crawford, K., & Joler, V. (2018). Anatomy of an AI System. Retrieved September, 18, 2018.

Gannon, G., & Hieker, C. (2022). Employee Engagement and a Company‟ s Sustainability Values: A Case Study of a FinTech SME. Management, 10(3), 201-210.

Grubb, M., Hourcade, J. C., & Neuhoff, K. (2015). The three domains structure of energy-climate transitions. Technological Forecasting and Social Change, 98, 290-302.

Jackson, J. D. (2022). A Future of Mandatory Environment, Social, and Governance (ESG) Disclosures: A Review of Public Comments as a Case Study in the Impact of ESG. Emory Corporate Governance and Accountability Review, 9(1), 120.

Kurucz, E. C., Colbert, B. A., Luedeke-Freund, F., Upward, A., & Willard, B. (2017). Relational leadership for strategic sustainability: Practices and capabilities to advance the design and assessment of sustainable business models. Journal of Cleaner Production, 140, 189-204.

Porter, M., Serafeim, G., & Kramer, M. (2019). Where ESG fails. Institutional Investor, 16(2).

Who We Are. (2022). Retrieved 18 August 2022, from https://www.jpmorganchase.com/about

Visser, D. (2022) MBA 5412 – MBA Seminars: Sustainability. Monash University. Monash Business School, 1-158.