Breakingthe Bank Case Questions
Towhat extent were the leadership decisions made based upon thepersonality of theleader?
Leadershipdecisions are exceedingly critical because they help in resolvingissues that may emerge in organizations. When leaders make decisions,they may be based on personal values or personality (Rumsey, 2013).Such personalities may include the use of openness, honesty,conscientiousness, and decisiveness in making leadership decisions(O’Toole & Mayer, 2013). From Breakingthe Bank Case,most of the leadership decisions were based upon the personality ofthe leader. One of the leaders that used their personalities inmaking decisions was Henry Paulson. When Paulson noticed that theeconomy was on the verge of declining, he was very decisive inensuring that he saved the banking system. His decisiveness led tothe deal of merging the Bank of America and Merrill Lynch. The leaderwas determined to spend billions of dollars belonging to thegovernment with a vision of preventing the American banking systemfrom moving the country into a depression. Behaving this way, it canbe argued that Paulson used his personality in ensuring that thebanking systems and other individuals do not suffer. Another leaderwho used his personality in making decisions was Lewis, the Bank ofAmerica CEO. Lewis acted on his conscientiousness to make the choiceof using the taxpayers’ resources in an attempt to salvage thefinancial system. The use of conscientiousness by Lewis indicated hismeasure of how organized and forward-thinking he was in making thedecision.
Identifywhat ways political behavior and social connections are used in thecase
Thepolitical behavior is evident in the case, where the governmententered in the ownership of the banking system, and introduced rulesthat were geared towards influencing the manner in which the banksare run. According to the case, the government was indicated to havethe power of controlling the banking. The concept of power is adepiction of political behavior in the case, where there governmentseems to provide the rules that the banks have to abide by. Unlessthe banks adhere to the regulations, the management of the bankswould be threatened, according to the case. It was because of thisreason that Lewis decided to sign a merger amid the Bank of Americaand Merrill Bank. Another political behavior that is evident in thecase is public participation. The public was denied the opportunityof participating in the making of the decision whether the governmentshould take part in the regulation of a bank that they owned. Lewisdid not also engage investors when making the decision to merge withthe government, despite shareholders having the ownership of thebank. There are social connections in the case, where there is a planto use the taxpayers’ resources in order to save the financialsystem. The use of taxpayers’ money is a social concern because itis likely to affect the masses in the society (Thornton, 2013).
Identifythe ethical problems raised in the case
Thereare different ethical issues that have been raised in the case. Oneof the ethical problems raised in the case is leaders being involvedin cutting a deal to merge the Bank of America and Merrill Lynchsecretly without involving other stakeholders. It is ethical toinform or include all the stakeholders that would be impacted in anissue instead of ignoring them and assuming that they are going toagree with the decisions being made. The involvement of otherstakeholders helps in preparing them for the consequences that mayresult from the decision reached (Leigh, 2013). However, in the case,there was a problem since the leaders did not engage the shareholderswhen they were considering the merger this was unethical.
Anotherethical problem was that although the merger was to help in savingthe American financial system through the use of the publicresources, the merger did not end up resolving the problem, but endedup putting shareholders and investors of the Merrill Lynch at a fixwhere they suffered losses because the government became part of theshareholders. An action that is done by leaders towards helping theshareholders was not supposed to inflict more problems to theshareholders. However, in the case, the decision of the leaders ledto shareholders having problems rather than solving their issues.
Besides,another ethical problem presented in the case concerns the use ofpublic capital. The use of public resources should emphasize onmaking better the services that are to be rendered. It is unethicalto use public resources with an aim of solving problems that themasses would have, only to become a failure at the end (Langlois,2011). In the case, the public resources were used in an attempt tosalvage the banking system, which the shareholders and investors wereto be proud of because it would deliver positive outcomes to them.However, the use of the public resources did not make the servicesbetter, but only made shareholders to have a further problem in theregulation of the banking sector. Furthermore, the taxpayers’ moneythat was used was not accounted for to the public.
Furthermore,another ethical problem that has been raised in the case concernsentering in a deal where one is not permitted to move out at freewill. In this case, it implies that individuals entering in a dealhave no choice of deciding whether to continue or call off the dealin case it is not favorable. This issue emerged in the case, whereLewis discovered the implication of having government as a partialowner. It was at this point that Lewis desired to get out of thedeal however, he was told that he had no option of getting out ofthe deal. This was unethical because the leader was not offered thealternative to make the choice that would favor the shareholders.
Doyou think ethics were considered in the use of political behavior inthe case? Why?
Ithink ethics were not considered in the use of political behavior inthe case because the government controlled the banking system withoutincorporating the ideas of all the stakeholders involved in thesystem for instance, the shareholders should have been incorporatedin the merger process because the entire process was to impact themeither positively or adversely. Besides, the government came up withregulations, which were to give it the power to control the bankingsystem. This was unethical because the regulations used by thegovernment to offer it power to control the banking system were notgenerated through negotiating with the parties involved. It couldhave been better if all the parties could have been involved in themerger process.
Breakingthe Bank Film.Retrieved fromhttp://www.pbs.org/wgbh/pages/frontline/breakingthebank/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid.
Langlois,L. (2011). Theanatomy of ethical leadership: To lead our organizations in aconscientious and authentic manner.Edmonton: AU Press.
Leigh,A. (2013). Ethicalleadership: Creating and sustaining an ethical business culture.London: Kogan Page.
O’Toole,J. & Mayer, D. (2013). GoodBusiness: Exercising Effective and Ethical Leadership.New York: Routledge.
Rumsey,M. G. (2013). TheOxford handbook of leadership.New York: Oxford University Press.
Thornton,L. F. (2013). 7lenses: Learning the principles and practices of ethical leadership.Richmond, Va.: Leading in Context LLC.