Gives an overview of the collapse of a prestigious financial institution and the organizational failings that contributed to it. Outlines the history of Barings Bank, the creation of its securities business, particularly in the Far East, and how Nick Leeson, a Barings trader in Singapore, was able to run up massive losses in derivative trading, which caused the collapse of the bank. Identifies the cultural clashes, remuneration system, control failings, and other issues that severely weakened the effectiveness of the matrix management system, an important contributor to the collapse.
Activity Respond to the following:
1. Describe a typical employee of BB & Co and BSL. How was Leeson’s behavior driven by the BSL culture?
2. Did the bonus scheme contribute to Baring’s downfall? If so, how?
3. How did Nick Leeson manage to lose 843 million pounds in just over two and a half years?
4. How did the formation of BIB add to the problems?
5. What were the problems with Baring’s matrix management system and how did they contribute to the collapse of the bank?
When analyzing a case study, all the used references (including the Internet) should appear within the text [e.g. (John Doe, 2008)] and on the references page. You are expected to apply all applicable course concepts, as well as those specific to the chapter from which the case or paper topic is drawn. The analysis should also contain a summary of related current developments obtained through searches on the Internet.
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