This essay will discuss the relationship of corporate culture, leadership, power, ethical decision making and ethical business cultures to managerial hubris in the 1920 Farrow’s Bank failure.
Foremost, Hollow (2014) demonstrated that Thomas Farrow, the founder and head of Farrow’s Bank, suffered from high managerial hubris. (Hollow, 2014) Managerial hubris refers to excessive self confidence, impulsiveness and disengagement from reality in one’s decision making process due to excessive power, and is characterised by excessive image consciousness, narcissism, messianism, self-belief and a lack of separation between the individual and organization. (Owen and Davidson, 2009) A cronyistic and unprofessional corporate culture, authoritarian XXXXXXXXXX, high concentration of power XXX XXXXXXXXX XXXXXXXXXX contributed XX XXXXXX’s XXXXXXXXXX hubris. Foremost, XXXXXX’s Bank XXXXXXXXXX a cronyistic XXX unprofessional corporate XXXXXXX XXXXX XXXXXX XX XXX appointment XX Farrow’s XXXXX XXXXXXXXXX who XXXX unqualified for the XXXX. XXXXXXXXXXX, such a XXXXXXX XXX unprofessional, as it encouraged Farrow’s XXXX’s stakeholders XX XXXXXX Farrow’s XXXXXXXX to protect their own XXXXXXXXX. (XXXXXX XX al, XXXX) Such a culture was enabled by a lack XX external control mechanisms. XXXXXXXX, authoritarian XXX non-consultative XXXXXXXXXX XXX to XXXXXXXXXX XXXXXX XX XXXXXXXX XXXXXX XX XXXX XXXXXXXXXX actions such XX XXXXXXX up and overvaluing assets to cover XXXXXX. (XXXXXX, XXXX) Thirdly, power was XXXXXX concentrated in XXXXXX’s hands, which fuelled XXX XXXXXXXXXX, XXXX-belief XXX a lack of separation between XXXXXXXX XXX bank XXXXXXXXX. Finally, XXXXXX XXX XXXXXXXXX XX a messianic XXXX XXX XXXXXXX XX transforming the XXXXXXX sector, XXXXX XXXXXXX hubristic XXXXXXX XXXX led XX XXXX governance and fraud. (Hollow, XXXX)
Next, the relationship XXXXXXX XXXXXXXXXX XXXXXX XX ethical XXXXXXXX XXXXXX, XXX XXX impact XX the business XXXXXXXXXXX, will be XXXXXXXXX. Managerial XXXXXX enables poor XXXXXXX XXXXXXXX XXXXXX, XX XXXXX by how Farrow tolerated XXXXXXXXXXX associates, XXXXXXXXXXXXXX meetings, lax XXXXXXXXX, and fraud. For example, XXXXXX (XXXX) XXXXX XXXX XXXXX meetings never XXXXXXXX discussions XX XXXX XXXXX XXXXXXX, XXXX Assistant Managing Director Crotch and the XXXX’s Board of Directors were loyal to XXXXXX but XXXXXXXXX, the XXXX XXX a deficiency XX £2,XXX,XXX in XXX 1920 upon audit XX XXXXXX, Read and XX., and XXXX Farrow XXXX interest in everyday XXXXXXXXXX and oversight. (Hollow, 2014) XXXXXXXXXXXXXX XXXXX XXXXXXXX, XXXXXXXXX XXXXXXXXXXXX and lax oversight XXXX highly XXXXXXXXX decisions, which were enabled by XXXXXX’s managerial XXXXXX, XXXXX XXXXXXX XXXXXX XX have an unshakeable XXXXXXXXXX and ‘grandiose’ XXXXXX in XXX XXXX despite such grave errors. (XXXXXX, 2014) XXXXXXXXXXX, XXXXXX’s XXXXXXXXXX XXXXXX XXX him to treat ‘his XXXXXXX XXXX XXXX XX a XXXXXXXX XXXXXXX and XXXX XX a XXXXXXXX moral crusade’, XXXXXXX to ‘increasingly XXXX business XXXXXXXXX’ which XXXX unethical, such as a pursuit of rapid XXXXXX over profitability. (XXXXXX, 2014) Even in the XXXXX, Farrow appeared delusional XXX XXXXXX XXXXXXXXXX, which showed how XXX XXXXXXXXXX hubris (XXX XXX XXXXXXXXXX XXX XXXX-XXXXXXXXXX) XXXXXXX unethical XXXXXXXX making without guilt. (Hollow, XXXX) Such developments XXXXXXXX XXXXXXXX XXXXXXXX by Brennan XXX Conroy (2013), who found XXXX excessive managerial XXXXXX in the form XX XXXXXXXXXX and excessive XXXXXXXXXX led bank CEOs XX make XXXX XXXXXXX decisions. (Brennan and XXXXXX, 2013) Clearly, such managerial hubris had a negative XXXXXX on XXX business XXXXXXXXXXX, XX it XXX Farrow to XXXXXX rapid XXXXXXXXX over sustainable, XXXXXXXXXX XXXXXX, and to XXXX XXX on XXXXXXXXX oversight XXX XXXXXXXXXX accounting, which eventually XXX the XXXX into XXXXXXXX XXXX XXXXXXXX in a trial XXX XXXXXXXXXX in court. (XXXXXX, XXXX)
XXXX the case, it is clear that another XXXXXX in XXXXXX Bank’s failure was XXX XXX pressure associated with ethical XXXXXXXX making XXX Farrow and his subordinates. As XXXXXX tolerated XXXXXXXXXX, cronyism, lax oversight, XXX XXXXX, XXXXXX and XXX subordinates XXX XXX feel significant pressure XX XXXX decisions XXXXXXXXX, XX XXXXX by how XXX XXXXXXXXXX, financial XXXXXXXXXX XXX XXXXXXXXXXX XXXXXXXXXXXXXXXX XXXX XXXXXXXXX. XXXXXXXXXXX, XXXXXXXXX XXX XXXXXXX XXXXXXXX making that XXXXX XXXXX would XXXX XXXXX, XXXX as regulatory compliance XXXXXXXXX, XXXX XXXXXX XXX to Farrow’s status as a credit bank XXXXXXXXXX under XXX Friendly XXXXXXXXX Act rather XXXX a XXXXXXXXXXX joint XXXXX XXXX. (Hollow, XXXX) On XXX contrary, pressure XXX actually exerted on Farrow’s XXXXXXXXXXXX to be loyal XXX XXXXXXXXX to XXXXXX’s grandiose XXXXXXX XXX the bank, XXX XX sign XXX on his unethical decisions, in order to protect their own vested XXXXXXXXX.
XX Farrow XXXX XXXXXXXXXXX an XXXXXXX business culture, XXXXXXXXXX hubris would XXXX been XXXXXXXXX. XXX XXXXXXX, XX XXX Bank XXX XXXX a conventional XXXXX-XXXXX bank rather than a XXXXXX bank XXXXXXXXXX XXXXX XXX Friendly Societies Act, XXXX stringent regulatory requirements would XXXX XXXXXXXXXXXX a XXXX XXXXXXX business XXXXXXX that XXXXXXX XXXXXXXX, negligence, incompetent XXXXXXXXXXXX XXX lax financial oversight. (XXXXXX, XXXX) An XXXXXXX culture XXXX XXXXXXXXXXXXX power, especially XXXXX XXXXXXXXXXXXX XXXXXXX, XXXXX have empowered XXXXXX XXXXX managers XX also XXXX XXXXXX in XXXXXXXXXXX XXX rectifying XXXXXXXXX business XXXXXXXXX XXXX XX fraudulent accounting XXX XXXXXXXXX XXXXXXXXX. XXXX an ethical business culture, in XXXX, XXXXX XXXX helped XX avert the XXXXX and XXXXXXXX XXXX eventually XXX XX the XXXXX outcome of XXX XXXXXX Bank’s XXXXXXX XXX the XXXXX XXX conviction of its leaders in court.
XX XXXXXXXXXX, this XXXXX XXX shown XXXX a XXXXXXXXXX XXXXXXXXX culture, authoritarian leadership, concentrated XXXXX and messianic motivations XXX XX XXXXXXXXXX XXXXXX, XXXXX enabled XXXXXXXXX XXXXXXXX making and XXX a XXXXXXXX XXXXXX on XXX XXXXXXXX environment. This was XXXXXXX enabled by XXX XXXXXXXXX associated with XXXXXXX XXXXXXXX XXXXXX, whose consequences could XXXX been averted XX XXXXXX Bank XXX a XXXXX ethical XXXXXXXX culture.
References
Brennan, N. X., &XXX; Conroy, X. P. (2013). Executive hubris: The case of a bank CEO. Accounting, XXXXXXXX &XXX; XXXXXXXXXXXXXX XXXXXXX, 26(X), 172-XXX.
Hollow, M. (XXXX). XXX 1920 XXXXXX's Bank failure: a XXXX of managerial hubris?. XXXXXXX of Management XXXXXXX, 20(X), 164-178.
XXXXXX, X., Cormier, X., &XXX; Lapointe‐XXXXXXX, P. (XXXX). XXXX XXXXX Attracted to XXXXXX: Managerial XXXXXX XXX Financial Reporting XXXXX. XX CAAA XXXXXX Conference.
XXXX, X., &XXX; XXXXXXXX, X. (XXXX). Hubris syndrome: An XXXXXXXX personality disorder? A study of US Presidents XXX UK XXXXX XXXXXXXXX over XXX XXXX XXX years. XXXXX, XXX(5), 1396-XXXX.