Case Study, The 1920 Farrow’s Bank Failure a case of managerial hubris

Answer

How Corporate Culture, leadership, power and motivation affected Thomas`s Managerial Hubris 

It is evident that corporate Culture, power and motivation negatively impacted Thomas`s level of managerial hubris. The bank`s leadership especially the bord of directors and Crotch conducted themselves with negative attitude towards work by being neglectful and irresponsible in the discharge f their daily responsibilities (Hollow, 2014). Considering that most leaders decided to be irresponsible, such neglect impacted on Thomas`s managerial hubris. Similarly, Thomas world view affected his hubris considering that he gave more attention to his looks and become too moralist and grandiose. Thomas increasingly stopped following rules and was not concerned with the realities of the present (Hollow, 20140. To make it worse, Thomas became fraudulent when dealing with the losses especially by editing and doctoring the balance sheet to create false impression that the bank was not making losses. Even when the courts found him guilty and convicted him, Thomas still refused to acknowledge his misgivings, always insisting that he had not done anything wrong (Hollow, 2014). The company had invested so much power in him, which even became worse because the company lacked external control to keep him in check. Furthermore, Farrow`s bank was not subjected to strict auditing rules considering that it was registered under the Friendly Societies Act.

Relate managerial hubris to ethical decision-making and the overall impact on the business environment.

Managerial hubris undermines a person`s personal principles and thus interferes with his decision-making ability.  Due to managerial hubris, leaders or managers fail to take into consideration the external factors that would in most cases impact the decision but instead concentrate on personal biases (Berglas, 2104). Accordingly, moral awareness usually plays an important role during the process of making decisions that would impact an organization. It is worth noting that ethical decision- making process in most instances involve experts from outside the organization making the decision due to lack of biases from their end. The rationale for having an executive team of decisions makers from outside the organization is because they impact the environment positively 9Berglas, 2014). On the contrary, negative hubris emanates from the attitude Thomas manifested leading to losses of money belonging to thousands of accounts 9Hollow, 2014). Whenever decision-makers fail to comply with or observe external factors, moral awareness is lost or impaired. It explains whatever happened with Thomas and the Farrows bank. 

Explain the pressures associated with ethical decision making at Farrows Bank

Whereas other employees could find it difficult to keep up with the pressures of ethical decision making, the same could not be said of Thomas because he was proud and also arrogant. He wasn’t able to observe all the warning signs that the bank could collapse if he didn’t change his attitude or make the best decisions 9Hollow, 2014). Moreover, he never felt remorseful for the decisions he made that led to the downfall of the bank and the losses that most clients suffered. The idea of Thomas not consulting other professionals in the organization was another source of pressure. In most instances, he made decisions independently without seeking the opinions of other employees or colleagues 9Holllow, 2014). The other employees also found more pressure when it came to making independent decisions because of the way in which the society viewed Thomas and how they thought he was successful.

Evaluate whether the level of managerial hubris would have been decreased if Farrow

Bank had a truly ethical business culture. Could this have affected the final outcome of

Farrow Bank? Explain your position.

It was possible for the managerial hubris at Farrows to decrease by curtailing the vice before it became entrenched into the Bank`s system. It could be possible to achieve such ends of the management decided to implement its policies to the letter and by treating everybody equally as being cable of meeting the demands of their employment terms (Hollow, 20140. For instance, had Harts reminded Thomas of the value of humility in the discharge of his duties, perhaps the whole scenario would have not had to happen. In so doing, it would also have been proper for them to inform him that majority of the employees had negative feelings about his conduct, something that might have helped him to change. If anything, the fortunes of the bank wouldn’t have dwindled so much if furrow was not given the free will to mismanage the organization like he did (Hollow, 2014). The management should have taken care to hire the vice president on merit and not on other ulterior consideration like friendship. It was such unethical decisions that coast the bank and led to the massive losses

          Also, it would have saved the bank if they did not allow the manipulation of the books of accounts to give false reflections of its financial performance. Several things went wrong at the bank including the choice to make Thomas the ultimate decision-maker in al things that touched on the bank (Hollow, 2014). He was not subjected to any form of accountability or criticism whenever he made wrong decisions and that how the bank came to fail. It is true that leadership requires some form of accountability, which can only become possible if there is a system of checks to ensure that leaders do not just do as they will, but act according set principles and rules (Berglas, 2014). It is also important that those at leadership positions should have positive relationship with other employees at lower ranks to foster positive and calm wok environment.