CASE STUDY - 1 Morgan Stanley was established in 1935, and in 1997 merged with retail brokerage firm Dean Witter Discover and Co to become a global financial services organisation that employed more than 53,000 people in over 600 countries including Australia. Institutional Securities, Asset management, Retail Brokerage and Discover were the four segments of Morgan Stanley. The merger altered the working environment of Morgan Stanley and created a divide in employee acceptance of the Retail brokerage segment. It did not integrate well with the firm partly due to the information systems being different to the rest of the company. Under CEO Philip Purcell's management, Morgan Stanley's infrastructure and systems did not grow with the needs of employees and customers, nor did it apply future technologies to their current systems, it's focus was reducing overheads to maximize profits in the short term. Many brokers resigned, taking with them valuable portfolios and profits. In June 2005 Purcell resigned, and John Mack provided new leadership. The firm then began to change its information systems and provide better services for clients, which saw stronger ethos and integrity within the employees. The new leadership at Morgan Stanley instigated change, and the realization that the Company must grow to keep up with the competition in the financial services industry. Not only did technology need overhauling within all the segments, but management and organizational changes were also required. Some of these changes were the renaming the Retail Brokerage division to Global Wealth Management Group and hiring James Gorman with a budget in 2006 to invest over $500 million. It was also forced to make a significant upgrade to its website. Prior to 2005 Morgan Stanley had no economic advantage, now with changes implemented in a competitive industry such as this Morgan Stanley's strength of employees, global product range and leading market share for Institutional Securities. Global Wealth Management and Asset Management has the firm making strong profits. Questions: Evaluate Morgan Stanley's business using the Competitive Forces Model : why did Morgan Stanley underinvest in Information Technology