For This Assignment, Read The Case Study, The 1920 Farrows B

For This Assignment, read the case study, The 1920 Farrows Bank Failu

For this assignment, read the case study, The 1920 Farrow's Bank failure: a case of managerial hubris. Hollow, M. (2014). The 1920 farrow's bank failure: A case of managerial hubris? Journal of Management History, 20(2)). Thomas Farrow had been evaluated as having been inflicted by managerial hubris at the time of the bank's collapse in 1920. With this in mind, address the following questions, with thorough explanations and well-supported rationale. How did corporate culture, leadership, power and motivation affect Thomas' level of managerial hubris? Relate managerial hubris to ethical decision making and the overall impact on the business environment. Explain the pressures associated with ethical decision making at Farrows Bank. Evaluate whether the level of managerial hubris would have been decreased if Farrow Bank had a truly ethical business culture. Could this have affected the final outcome of Farrow Bank? Explain your position. Your response should be a minimum of three double- spaced pages. References should include your required reading, case study reference plus a minimum of one additional credible reference. All sources used must be referenced; paraphrased and quoted material must have accompanying citations, and cited per APA guidelines.

Paper For Above instruction

The case study of Farrow's Bank failure in 1920, as analyzed by Hollow (2014), offers a compelling examination of managerial hubris and its detrimental impact on organizational outcomes. At the core of this failure lies a confluence of corporate culture, leadership style, power dynamics, and motivational factors that contributed significantly to Thomas Farrow’s inflated sense of self-confidence and decision-making arrogance. Exploring these elements allows for a comprehensive understanding of how hubris can distort ethical judgment and ultimately jeopardize business stability.

Corporate Culture, Leadership, Power, and Motivation Influencing Hubris

Corporate culture shapes the values, beliefs, and norms that guide organizational behavior. In Farrow’s Bank, a culture that perhaps prioritized growth and personal success over risk mitigation fostered an environment where manager and executive ambitions could overshadow prudent decision-making. Thomas Farrow’s leadership style, characterized by decisiveness yet marked by overconfidence, reinforced this environment. His accumulation and exertion of power, combined with a desire for reputation and legacy, fed into his managerial hubris. Motivation rooted in personal achievement and dominance over competitors created ample pressure for Farrow to pursue aggressive expansion strategies, clouded by overestimations of his own competence.

Managerial Hubris, Ethical Decision Making, and Business Environment

Managerial hubris distorts ethical decision-making by diminishing awareness of limitations and exposing managers to overconfidence biases. As shown in the Farrow case, this hubris led to risky financial investments and an insular mindset resistant to external critique or warning signals. The business environment, influenced by such hubris, became increasingly fragile—overleveraged and poorly scrutinized—culminating in the bank's collapse. Ethical decision-making suffers when managers prioritize personal pride and legacy over transparency and risk management, leading to decisions that are fundamentally misaligned with sustainable business practices.

Pressures in Ethical Decision Making at Farrow's Bank

At Farrow’s Bank, pressures stemmed from the desire to maintain prosperity, reputation, and competitive edge. The institutional emphasis on growth and success, combined with personal ambitions of Thomas Farrow, amplified these pressures to take unethical shortcuts or neglect warning signs. The lack of an ethical framework that emphasized accountability and stakeholder consideration resulted in decisions driven by self-interest. The culture appeared to prioritize short-term gains over long-term stability, creating an environment ripe for hubris-driven errors.

Impact of Ethical Culture on Managerial Hubris and Final Outcome

If Farrow Bank had cultivated a truly ethical business culture—one emphasizing integrity, accountability, and humility—managerial hubris might have been significantly reduced. An ethical culture promotes cautious risk-taking, encourages dissenting opinions, and values transparency, all of which can temper overconfidence and limit reckless decision-making. This ethical framework could have led to more rigorous oversight, more conservative financial strategies, and an openness to external critique, potentially avoiding the catastrophic collapse. Therefore, fostering such a culture might have positively altered the bank’s fate, minimizing the influence of hubris and promoting sustainable growth.

In conclusion, the Farrow's Bank failure exemplifies how managerial hubris, driven by corporate culture, leadership flaws, power, and motivational misalignments, can lead to ethical lapses and organizational downfall. Cultivating an ethical business environment serves as a safeguard against hubris, ensuring decisions are balanced, responsible, and aligned with sustainable success. Such a shift could have significantly impacted the final outcome, emphasizing the importance of ethical culture in managerial practices and organizational resilience.

References

• Hollow, M. (2014). The 1920 Farrow's bank failure: A case of managerial hubris? Journal of Management History, 20(2), 123-141.
• Barnard, C. I. (1938). The functions of the executive. Harvard University Press.
• Heifetz, R., & Linsky, M. (2002). Leadership on the line: Staying alive through the dangers of leading. Harvard Business Press.
• Singh, J. (2010). Ethical decision making in banking. Journal of Business Ethics, 92(3), 407-418.
• Weiss, J. W. (2014). Business ethics: A managerial perspective. South-Western Cengage Learning.
• Brown, M. E., & Treviño, L. K. (2006). Ethical leadership: A review and future directions. The Leadership Quarterly, 17(6), 595-616.
• Schwartz, M. S. (2016). Developing and sustaining an ethical corporate culture. California Management Review, 58(3), 6-27.
• Freeman, R. E., & Reed, D. (1983). Stockholders and stakeholders: A new perspective on corporate governance. California Management Review, 25(3), 88-106.
• Donaldson, T., & Preston, L. E. (1995). The stakeholder theory of the corporation: Concepts, evidence, and implications. Academy of Management Review, 20(1), 65-91.
• Kaptein, M. (2008). Developing and testing a measure for the ethical culture of organizations: The corporate ethical virtues model. Journal of Organizational Behavior, 29(7), 923-947.