Lehman Case Study Writeup Essay

As a member of management Clive Jenkins is responsible for boosting employee morale to ensure that company goals are met

In The Divide, author Matt Taibbi portrays the effects of the Recession on the employees of the large bank firms that committed fraud. Taibbi discusses the life of Linda Almonte, a former executive for JPMorgan Chase. Originally, Linda worked for Washington Mutual, but a large amount of fraudulent activity happened at the bank firm and caused the bank to fail. They were giving loans to “anything that moved” (357) without looking at the consequences. However, the massive amounts of loan were not what “killed the company” (358), it was destroyed because of their inability to rid of their “defective product” (358). After Linda discovered that JPMorgan Chase was committing suspicious acts, she decided to investigate. Not only did she find

On the contrary, Epperson took extreme measures to reassure its concealment to the point of institutionalizing their version of the Iron Curtain. Tactically distributing certain financial information across several key players effectually eliminated any individual exploring the larger picture. The reason for such an extreme veil of secrecy undoubtedly originated from the enterprise operating as a Schedule C organization, thereby integral to the owner’s federal income taxes. And although management competence appeared marginal at best, they displayed remarkable ability to control employee interaction with Christine utilizing an originative mix of fear, coercion, and intimidation. Douglas McGregor would label this supervision style as Theory X decades earlier, yet its effectiveness in private industry had long ago proven inefficient and flat-out counterproductive. Mutual assurances allowed executive bonuses to continue flowing in spite of dwindling financial performance over the years. Notwithstanding other anomalies exceeding the scope of this writing, the author’s reverence for the founder, Uriah Spray Epperson, could have been greater as highly innovative and sheer genius of his day. Indeed, the company operated as his proxy in the management of the reciprocal insurance association known as Lumberman’s Underwriting Alliance

For two companies of such severe differences and little commonalities to get along, it requires great patience, and an even greater deal of tolerance. In the last paragraph of the case study it talks about the last minute efforts that Nomura did, before the Ex-executive of Lehman left. We also get a sense of unpreparedness from both companies; that, one did not do homework on the needs and wants of the other. Had they have been more flexible of their cultural beliefs, and worked harder at diversifying their workgroup from the gecko, the outcome might have been different. And both companies would not have had to work so hard to understand the

For a company as large as Lehman Brothers was, one has to wonder how this could have possible occurred. Surely there were red flags along the way that could have prevented this, right? The answer is yes. The media reported on events that would have lead you to believe that trouble was coming for Lehman Brothers, but truth be told, no one really knew that it would result in the company ending up bankrupt. Everything from having a front row seat to watching another giant like Bear Stearns fail, to

I don’t agree with Dunlap’s view that shareholders are the only constituencies about which corporate directors and executives should be concerned. In light of agents’ obligations to principals, managers are supposed act in the best interest of the company’s shareholders, the major capital providers, when making decisions; however, as shareholders and stakeholders interests are to a large extent compatible, especially from a long-term perspective, managers should also take into consideration the interests of multiple constituencies when operating a company. For example, both shareholders and customers may benefit from a company’s successful research and

Berhard Ebbers’s actions were primarily indicative of a pattern of destructive deviant behaviour as opposed to the communal leadership style. Ebbers’s tactics, while self-seeking, served to make the entire company more wealthy. His cost-cutting measures were shared experiences (+/- 2 degrees on thermostat, for example), but the rewards that were gained were similarly shared, through increased stock prices. The pattern of deviant behaviour hinges around Ebbers’s use of a clear effort/profit relationship that was entirely ignorant of individual’s response to incentives regardless of the legality of the process used to maximize the incentive. It seems the e/p relationship was understood by the firm to be “all efforts to increase stock price are desirable”.

The Lehman Brothers debacle was truly an eye opening event that forced the topic of executive pay and abuse into the mainstream. Up to this point, as American businesses continued to amass more wealth, and pay disparity became more evident across multiple sectors, many truly did not know the powerful relationship between big business and government. When Lehman filed for bankruptcy in 2008, and shortly thereafter pumped millions to executives, a heated debate emerged on the morality of justifying this payout. Richard Fuld went before Congress to testify, taking all responsibility for decisions which led to the demise of the business. However, it was hard to justify asking for a bailout while sending millions to the executive team.

This overview of the case provides Lehman’s background information, it’s controls, performance measures, key personnel, as well as the market and regulatory environment during the financial crisis.

Lehman Brothers was founded by German immigrant Henry Lehman and his two brothers Emanuel and Mayer in 1850. Lehman Brothers was able to overcome many obstacles– “the railroad bankruptcies of the 1800s, the Great Depression of the 1930s, two world wars, a capital shortage when it was spun off by American Express in 1994, and the Long Term Capital Management collapse and Russian debt default of 1998.” (Investopedia) But the collapse of the housing market was one obstacle they could not overcome.

One of the largest economic Bankruptcy cases in the United States was the 2008 Lehman Brother’s case. A numerous amount of the general public lost their employment, while investors lost their money during this crisis. By the Lehman Brothers commercial real estate investments failing, they were not able to efficiently finance its operations. This was all because of the 2008 commercial mortgage financial disaster. In this research, I will use Assignments 1 research as the foundation to explain how the Lehman Brother crisis affects business, to give managers advice, to explain if this could happen again and to provide insight on how the Lehman brothers have affected someone or me I know.

(n.d. 2016) There are several elements of power corruption present in this case. First off his destructive and toxic leadership style. He was a liar, untrustworthy, greedy and money hungry. Fuld had an opportunity in 2007 to voice concerns about his bank’s short-term financial health and its heavy involvement in risky loans, and he squandered it in favor of communicating to investors and Wall Street that no foreseeable concerns existed.(n.d.2017). If he was upfront and honest about what his company was going through other companies could have helped or at least gave him a by out solution. Knowing the company was essentially losing money he kep acquiring new accounts. During the stock market declines Lehmans competitors took a step back while Fuld continued making big investments. If he would have stopped and followed the line of other businesses in the same market he could have potentially saved his company. He received several offers that could have helped his company but he ignored all of them because he disagreed. For such a “Good Trader” he was a bad businessman. He could not face reality that the market had changed and face the facts his company was declining. Not being proactive led to increased downfall that led the company to end up filing for bankruptcy in 2008. Fuld was motivated by his personal power and in essence could come to grips with reality or was too stubborn to see it. Ignoring the facts and

Lehman Brothers originally started out as a general store. In 1844, Henry Lehman started the business and eventually his two brothers, Emanuel and Mayer, joined in. What started off as selling supplies to cotton farmers quickly turned to a commodities broker company. After the Civil War, Lehman Brothers helped form and head the

Due to the interchangeability of the positions there often arouse conflicts of interest. These conflicts of interest affected credit rating agencies as well as academics that received funding as consultants but didn’t disclose this information in their academic writing.

The rise and fall of the Royal Bank of Scotland is characterized by poor corporate governance which allowed for the complete dominance of the executive management over the board of directors and a massive principal-agent problem. Positive social dynamics and the power of weak ties allowed for compliance while intimidation and bullying tactics silenced questions, concerns and opposition. The board’s utter compliancy and borderline negligence enabled rampant, unchecked empire-building at the cost of shareholder value and led to a spiral of unaccountability and gross incompetence. Stakeholders’ loss of confidence from misinformation and misdirection was an inevitability that sealed