Lehman Brothers Essay

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Learning Team Reflection – Lehman Brothers While researching the culture at Lehman Brothers (LB) Team A learned about the classical view of social obligation, which was different from what The Team previously understood. According to Robbins & Coulter (2012) the classical view of social responsibility is to engage in social actions to the economic and legal minimum obligation. The bottom line is “only social responsibility is to maximize profits” (Robbins & Coulter, p. 124). The LB organization lived this view daily. Culture and its Effect on the Downfall The culture at LB was one of poor judgment regarding financial decisions, CEO domination, an increased appetite for risk-taking, ignoring or overruling individuals voicing concerns (whistleblowers), ensuring appearances were stellar, and a belief that “risk could be managed by effective mathematical modeling” (Thought Management, p. 5) commonly known as Repo 105 transactions. An irony of this company is LB claims to have “a culture of risk management at every level of the firm” (Latifi, p. 6), not witnessing risk management anywhere in this company. One could believe “willful blindness” was an issue with LB’s culture but was not. Leadership was very aware of the risks but chose to ignore them or believed they could be overcome (Repo 105 is ideal for this task). Not a constructive cultural trait and the beginning of the company downfall. The former CEO of LB, Richard Fuld, embraced his nickname of “Gorilla,” that characterized his intimidating business style (Latifi, 2012) that was demonstrated frequently with employees. Richard’s dominance, ignoring individuals with concerns (whistleblowers), and an attitude of no accountability or transparency created a lack of communication and ultimately a fear-based culture at LB. This combination of dysfunctional corporate

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