Running head: LEHMAN BROTHERS CULTURE AND DOWNFALL 1

Lehman Brothers Culture and Downfall

Osvaldo
MGT
Jan 12, 2011
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Lehman Brothers Culture and Downfall
Arguments surrounding the demise of a once respectable institution which lasted for over
160 years still persist to this day.
Reading the article in Robbins & Coulter, Will We ever Learn, seems to hint at a quick
and simple answer to the question of how the culture at Lehman brothers contributed to the
demise, (Robbins & Coulter 2012).
Indeed Lehman brothers' greed as the ultimate objective and justification for excessive
risk taking coupled with dubious business practices skewed the company's ethical and moral
compass. Decency, ethics, morality and commercial respectability were hidden in this
organization. These hidden intrinsic values were replaced by highly visible and tangible
objectives, greed. For even the most moral of Lehman brothers' employees, this became a
temptation too difficult to resist.
As past experiences in history show, immoral and unethical behavior if unchecked grows
like a cancer and leads to the inevitable demise of any societal norm. This was the case at
Lehman brothers where power and greed replaced basic human decency.
Lehman brothers culture incentivized bullish behavior by heralding risk takers and
manipulators as heroes, and inversely undermining and even punishing any substantive
opposition. Coercive leadership through intimidation was practiced by top management and
sanctioned by the hierarchy as evidenced by their reward structure.
Lehman brothers clearly adhered to a policy of self-enrichment, devoid of any established
and responsible, moral vision.
As suggested in Robbins & Coulter (2012), an organizational structure with a social
obligation perspective is focused on maximizing profits and tends to do just the necessary to
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meet its legal obligation. Unfortunately, Lehman brothers' fell even short of meeting the most
basic requirements.
As David De Cremer (2011) suggests, The antidote to a corrupt corporate culture is
passionate leadership, guided by a strong moral compass (p.1).
For an organization to be successful it must not only value its internal shareholders, but
engage in a mutually beneficial contract with the community, as well. An organization must
ensure a clearly written code of ethics and moral behavior. These essential values must be
promulgated throughout the business and must be understood by each employee.
Lehman brothers hierarchy and top management culture of greed, manipulation, and
coercion set the direction to what became an inevitable collision course. It is unfortunate that a
once powerful and prominent organization such as Lehman brothers now serves as a reminder
that an organization cannot forgo its moral and ethical obligation and remain a successful and
contributing member to society.










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References

De Cremer, D. (2011). VOICES: A STRONG MORAL COMPASS. Business Strategy Review,
22(3), 80-81. doi:10.1111/j.1467-8616.2011.00784.x

Robbins, S.P., & Coulter, M. (2012). Management (11th ed.). Upper Saddle River, NJ: Prentice `
Hall.