The Dynamics of Organizational Collapse: The Case of Barings Bank (Routledge International Studies in Money and Banking)

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. Book Cover......Page 1 Title......Page 6 Copyright......Page 7 Dedication......Page 8 Contents......Page 10 Preface......Page 14 Principal actors......Page 15 Summary of key events......Page 16 Introduction......Page 18 1 The paradox of consequences......Page 26 2 'A pisspot third-rate bank'......Page 33 3 Failing most successfully......Page 41 4 The dynamics of power......Page 48 5 Did Nick Lesson have an accomplice?......Page 52 6 Analysing the fatal disconnect......Page 57 7 Agency, structure and organizational collapse......Page 60 8 From order filler to star trader......Page 66 9 Analysis of Leeson's early days......Page 77 10 Decision error......Page 80 11 'A million bucks a day'......Page 91 12 Analysis of the final weeks......Page 103 13 The illusion of control......Page 111 14 The last line of defence......Page 119 15 Analysing the illusion of control......Page 125 16 Summary and conclusions......Page 131 References......Page 147 Index......Page 156 The paradox of consequences "A third rate pisspot bank" Failing most successfully The dynamics of power Did Nick Leeson have an accomplice? Analysing the fatal disconnect Agency, structure and organizational collapse From order filler to star trader Analysis of leeson's early days Decision error "A million bucks a day" Analysis of the final weeks The illusion of control The last line of defence Analysing the illusion of control Summary and conclusions. The paradox of consequences "A pisspot third-rate bank" Failing most successfully The dynamics of power Did Nick Leeson have an accomplice? Analysing the fatal disconnect Agency, structure and organizational collapse From order filler to star trader Analysis of Leeson's early days Decision error "A million bucks a day" Analysis of the final weeks The illusion of control The last line of defence Analysing the illusion of control Summary and conclusions. International in its appeal, this book uses high-level and multi-theoretical analyses involving psychological and sociological theories to explore the events of Nick Leeson's employment with Barings' in Singapore in 1992 to Barings' collapse in 1995. Helga Drummond. Includes Bibliographical References (p. [130]-138) And Index.