Dear colleagues,
I very much appreciate the discussions on this list, but given the amount of messages generated lately, I was wondering whether it was maybe pertinent to shift towards a "forum" type of discussion medium.
Kind regards,
Clemens
Dr. Charles-Clemens Rüling
Associate Professor
Management and Behaviors Department
Grenoble Ecole de Management
12 rue Pierre Sémard - BP 127
38003 Grenoble Cedex 01, France
Office: +33 (0)4 76 70 60 34
Mobile: +33 (0)6 01 81 81 37
Kim,
This very useful debate on ethics and values [thanks everyone for this] seems to make a big assumption – that unethical behaviour was the main reason for the crisis, so with more ethical standards it would have been avoided or substantially reduced. But apart from a few egregious examples, it is not clear that most senior execs were deliberately doing things for their own gain that they knew to be against the interests of investors, employees or customers.
Clearly is was not bad behavior by executives that expanded the bubble until it exploded much to their surprise. It was the CCX social agreements at the systems level. Please do some systems analyses. Good people will do harmful things and not know it when the system fails. The financial systems spun out of control due regulators that did a hell of a job Brownie. We need to build a better system--One with alarms and repair specialist. Whatever happened to the notion of "Fail-safe"? We need to train executives to understand that systems can fail when notproperly maintained.
George
CSMS
An alternative view is that executives were mostly doing things they thought - but incorrectly - to be in the best interests of their organizations and their customers [as well as themselves]. This hypothesis is supported by the endless positive assessments of corporate prospects by analysts and other well-informed commentators, right up to the moment things went wrong. Surely all those hundreds and thousands of executives could not have hidden dishonest or deceitful behaviour from the outside world for so long?
If they were not being dishonest or unethical, then, were they in fact being insufficiently competent in the strategic management of their organizations. Government grilling of banking executives, for example, has shown that CEOs were doing things that were widely regarded as skilful, even super-clever, that neither they nor most others realised were dumb until after the event. And the banks were not alone in managing themselves into crisis, or at least into serious trouble – we now have car makers, airlines, ship-building, commercial real-estate, retailers and hundreds of other sectors in difficulties they could and should have foreseen and guarded against.
I had reason to reflect on whether senior management have been sufficiently competent in managing strategic performance in recent years, and whether they need better tools for the job, in presentations at business schools in Argentina and Brazil over the last 2 weeks, a 60-min. screen-cast of which you can find at http://www.strategydynamics.com/strategy-lessons.
Kim Warren: London Business School
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