Download HubrisColumbia Southern University Business EthicsHubrisIntr and more Lecture notes Accounting in PDF only on Docsity! Hubris Columbia Southern University Business Ethics Hubris Introduction The case study for this review revolves around the ethical issues found within the 1920 Farrow Bank Failure. According to Hollow, M. (2014), Thomas Farrow had a hubristic behavior that contributed to the bank’s downfall. This behavior was not exactly noticed nor corrected and began to affect the rest of the bank’s staff. This case study will review how the culture, leadership and power and motivation within the bank contributed to the hubris behavior. It will also go over how ethical decisions were compromised at Farrow Bank, along with pressors associated with them. Finally, the case study will evaluate if the bank had made changes towards incorporating an ethical business practices, if that would have helped the bank succeed and survive. Culture Hubris is defined as excessive pride or self confidence by Lexico Dictionary (2021). According to Hollow, M. (2014), Thomas Farrow had private ledger books under lock and key that he only had access to. Thomas also tried to secure a deal where he would sell 300,000 unissued stocks to a new investor who would become a managerial director for the bank. The article also states that Farrow tried to hide information that would show the bank’s true financial position. The culture was corrupt with power hungry managers that were not involved with the bank. The article states there was a lack of concern with the Bank's finances and that Thomas Farrow lost contact with the day-to-day reality of bank management. These actions show just how far the Bank's Directors and senior staff failed in their supervisory responsibilities. Thomas was not questioned in his behavior, rather it seemed he was encouraged to continue to bring profit for the bank. In an article, Cook, R. (2012, February). Mortgage crisis, there is an interesting saying of that people’s responsibility extends to their neighbors. If ethical behavior was encouraged within the bank and if someone stood up for what was right, Thomas Farrow might not have done nearly as much damage to the bank. Ethical Decisions Management hubris more times than not has a negative impact in business ethical decision. It is that hubris mindsets produce a cloud over judgement for the betterment of the business and highlight the option for personal gain and recognition. The bank should have had ethical practices set into place to minimize the negative exposure the management team and Thomas Farrow exposed the bank to. One important factor that helped with the decline was the “independent audits” that were performed. Since the bank was listed as a credit institution, it was subjected to less strict requirements in the terms of audits. Since Thomas Farrow along with the other members of management were not held accountable for their actions ethical decisions did not happen. Since then, according to (Aminu, A. A., & Oladipo, O. A. (2015, September) regulations and supervision of banks are an important mechanism of ensuring safe practices. Pressures Making ethical decisions always has hidden pressures. The person making the decisions must think about how the outcome impacts both themselves and others around them. They also must think about how the outcome impacts the business (if it involves a business). With being in the banking business there is pressure to build equity within the bank and to gain customers’ business. There is also pressure towards making the bank money and making it grow. Giannarakis, G. (2014) states that the size of a company is measured by its number of assets,
