The Dynamics of Organizational Collapse

The Case of Barings Bank

By Helga Drummond

© 2008 – Routledge

144 pages

Purchasing Options:
Paperback: 9780415542708
pub: 2012-05-10
US Dollars$54.95
x
Hardback: 9780415399616
pub: 2008-01-10
US Dollars$170.00
x

About the Book

The collapse of Barings’ Bank was a commercial catastrophe that resonated worldwide, showing what kind of secrets can lie behind an apparently successful organization. Following Nick Leeson’s arrest and subsequent conviction for fraud, investment banks anxiously reviewed their risk management controls to make sure that it could never happen again.

Helga Drummond’s exploration is conducted against a backdrop of social and psychological theories of decision error that seeks to go beyond media style accusations of greed and incompetence. She challenges the myth that Barings ‘must have known’ that mischief was afoot. The book offers lessons for all organizations as it shows how easily managers can end up living in a world of fantasy believing that everything is under control when the precise opposite may be true. It is not risk and uncertainty that should worry organizations, concludes Drummond, but what they are most sure of.

The collapse of Barings Bank had international ramifications, and this scholarly analysis will have an international audience as a result. The book will be of great interest to all those interested in social psychology, the application of psychology in management theory, sociology, and organizational behaviour. It is also suitable as recommended reading for a management or organization behaviour course.

Reviews

"Her sast chapter's fascinating water analogy nicely summarizes the issues, and her final sentence may well generalize the background of the current financial crisis … well worth reading." -- CHOICE September 2008, Vol. 46 (J. Prager, New York University)

Table of Contents

1. The Paradox of Consequences 2. ‘A Third Rate Pisspot Bank’ 3. Failing Most Successfully 4. The Dynamics of Power 5. Did Nick Leeson Have an Accomplice? 6. Analysing the Fatal Disconnect 7. Agency, Structure and Organizational Collapse 8. From Order Filler to Star Trader 9. Analysis of Leeson’s Early Days 10. Decision Error 11. ‘A Million Bucks a Day’ 12. Analysis of the Final Weeks 13. The Illusion of Control 14. The Last Line of Defence 15. Analysing the Illusion of Control 16. Summary and Conclusions

About the Author

Helga Drummond is Professor of Decision Sciences at the University of Liverpool Management School.

About the Series

Routledge International Studies in Money and Banking

This series explores the roles of money and banking in the modern world. Banking is an increasingly important and international industry, and its interaction with money is a major concern for the world's economic policy-makers.

Learn more…

Subject Categories

BISAC Subject Codes/Headings:
BUS000000
BUSINESS & ECONOMICS / General
BUS004000
BUSINESS & ECONOMICS / Banks & Banking
BUS085000
BUSINESS & ECONOMICS / Organizational Behavior
PSY021000
PSYCHOLOGY / Industrial & Organizational Psychology