Instructions
For this assignment, read the case study, The 1920 Farrow’s Bank failure: a case of managerial hubris.
Hollow, M. (2014). The 1920 farrow’s bank failure: A case of managerial hubris? Journal of Management History, 20(2), 164-178.
Thomas Farrow had been evaluated as having been inflicted by managerial hubris at the time of the bank’s collapse in 1920. With this in mind, address the following questions, with thorough explanations and a well-supported rationale.
- How did corporate culture, leadership, power, and motivation affect Thomas’ level of managerial hubris?
- Relate managerial hubris to ethical decision making and the overall impact on the business environment.
- Explain the pressures associated with ethical decision making at Farrows Bank.
- 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.
Your response should be a minimum of three double- spaced pages. References should include your required reading, case study reference plus a minimum of two additional credible reference. All sources used must be referenced; paraphrased and quoted material must have accompanying citations, and cited per APA guidelines. PLEASE REFER TO THE RUBRICS ATTACHED AND USED ONLINE SOURCES THAT CAN BE ACCESS EASILY (that doesn’t need any passwords)
TO BE RE-WRITTEN FROM THE SCRATCH
Managerial hubris at Farrow Bank
The collapse of Farrow Bank in 1920 has beenattributed to managerial hubris on the part of Thomas Farrow. This paper briefly outlines how corporate culture, leadership, power and motivation affected Mr. Farrow’s managerial hubris. It also looks at the impact of the conflict between managerial hubris and ethical decision making on Farrow Bank. Further, the paper looks at what the impact of an ethical business culture would have been on the Bank.
Effects on Thomas’ managerial hubris
From an early age when he was working for politicians the Rt Hon W H Smith and Mr. Robert Yerburgh, Thomas Farrow was not afraid to voice his opinion. Despite no formal training in economics or finance, his criticism of the banking sector and usury were particularly outspoken, leading to publishing of his first book, The Moneylender Unmasked. Later, he was to publish many articleson national policy and industrial legislation in his Bank’s publications. He also published The Coming Trade War in 1916. These publications that voiced his personal opinions depict a preponderance with self-image, a symptom of managerial hubris that can be attributed to motivation and corporate culture.
Farrow’s leadership skills came to the fore when he founded the successful albeit local Mutual Credit and Deposit Bank. He then founded Farrow’s Bank in 1904. Aimed at small savers, Farrow’s Bank proved popular, with Mr. Farrow extravagantly declaring it a “death blow to usury”. When the Bank was listed in 16 May 1907, Thomas Farrow became the Chairman and Managing Director. These fight against usury and having two lofty titles depict a moralistic and grandiose leader who increasingly viewed the organization as a personal moral crusade rather than a business venture, signs of managerial hubris.
The financial reports of the Bank were apparently quite impressive, through the First World Warup to when the Bank closed in 1920. This however was not a real reflection of the Bank’s performance since the Bank did not follow the rules and regulations stipulated for financial reporting. Power had gone to Farrow’s head, with him disregarding the rules and regulations. This shows managerial hubristhat was spurred on by leadership,power and corporate culture.
Thomas Farrow was not willing to take responsibility for the collapse of the Bank, despite overwhelming evidence to the contrary especially during his trial. He noted that if he had been given more time, he would have turned the fortunes of the company around despite not doing so for the many years that the Bank misreported its performance. Thomas Farrow was hence detached from reality, a cognitive symptom of managerial hubris that was spurred by his motivation to succeed despite the odds.
Managerial hubris vs ethical business culture
The preponderance to self-image made the Bank’s resources to be utilized pandering to the whims of Thomas Farrow, rather than the resources been utilized in addressing the issues afflicting the Bank. The pressure for this emanated from Mr. Farrow’s self-confidence and ambition. Hence rather than the Bank’s publications addressing issues relevant …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….. The 1920 Farrow’s Bank failure ….
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