Week Five Team Reflection
Week Five Team Reflection
Lorenzo DeCamps, Ladan Askari, David Sperber, Sherell Worthy
MGT/521
November 17, 2014
Deb Lawton
Week Five Team Reflection
2. What was the culture at Lehman Brothers like? How did this culture contribute to the company’s downfall?
Prior to the downfall of Lehman Brothers the company was known for being the best of best. It was considered one of the top financial institutions for the United States. One could say that there was a pride or arrogance for employees who worked for the financial company. It could have been that arrogance from employees that played such a big role in the collapse of the organization. For instance, at Lehman Brothers if you closed a big deal you were rewarded for that. The bigger the deal the more you were compensated. This is one of the factors we feel was the cause of Lehman Brothers failure, it was so focused on doing business that it stop focusing on making sure that business was beneficial for the company. So it was no surprise that employees who made big and risky deals were looked at like big time deal makers. Instead of being questioned on the riskiness of the transaction that they brought into the company. Those employees were rewarded very heavily. The inspection of those dicey deals should have come for the leadership team of the institution. However, the employee’s where only following the example set by their leadership team it all trickles down from the top of the executive team to the bottom. Lehman Brothers leadership team instead of protecting the bank they lead the top financial institution to bankruptcy. One of the ways they did that was by making very bad business decisions and manipulating the balance sheet. For example, there was a finding that stated that the financial controller of the company sharing on emails that the only reason for Repo 105 was to minimize the balance sheet.
3. What role did Lehman’s executives play in the company’s collapse? Were they being responsible and
Lorenzo DeCamps, Ladan Askari, David Sperber, Sherell Worthy
MGT/521
November 17, 2014
Deb Lawton
Week Five Team Reflection
2. What was the culture at Lehman Brothers like? How did this culture contribute to the company’s downfall?
Prior to the downfall of Lehman Brothers the company was known for being the best of best. It was considered one of the top financial institutions for the United States. One could say that there was a pride or arrogance for employees who worked for the financial company. It could have been that arrogance from employees that played such a big role in the collapse of the organization. For instance, at Lehman Brothers if you closed a big deal you were rewarded for that. The bigger the deal the more you were compensated. This is one of the factors we feel was the cause of Lehman Brothers failure, it was so focused on doing business that it stop focusing on making sure that business was beneficial for the company. So it was no surprise that employees who made big and risky deals were looked at like big time deal makers. Instead of being questioned on the riskiness of the transaction that they brought into the company. Those employees were rewarded very heavily. The inspection of those dicey deals should have come for the leadership team of the institution. However, the employee’s where only following the example set by their leadership team it all trickles down from the top of the executive team to the bottom. Lehman Brothers leadership team instead of protecting the bank they lead the top financial institution to bankruptcy. One of the ways they did that was by making very bad business decisions and manipulating the balance sheet. For example, there was a finding that stated that the financial controller of the company sharing on emails that the only reason for Repo 105 was to minimize the balance sheet.
3. What role did Lehman’s executives play in the company’s collapse? Were they being responsible and