Lehman Brothers

Leadership in Action - Lehman Brothers

Case Study

Lucy Abreu

Broward College

Abstract

This essay will explain the Lehman Brothers case study on Richard Fuld, the last Chief Executive Officer for this organization. More specifically I will discuss in detail the elements of power corruption present in this case. Additionally, I will discuss the sources of Richard Fuld’s power.

The collapse of Lehman Brothers at the time was the largest in the history. With $639 billion in assets and $619 billion in debt it surpassed any previous bankruptcies such as Enron and WorldCom. The prime culprit to this demise was Richard Fuld. Six years after the near-collapse of the nation’s financial system, the economy continues a slow recovery. Our high unemployment, hesitant consumers and sluggish business investment are a direct effect of the damage that Richard Fuld single handedly cause havoc to our economy.

Based on the case study and the articles that I’ve read on Richard Fuld I believe that his sources of power were clearly displayed in a coercive manner. Mr. Fuld managed to instill fear in those employees that he led. They felt threatened by him and in the manner that he carried himself within the organization. He seemed to relish in the idea of influencing his employees with his threats or with terminations. What Mr. Fuld did not realize was the effectiveness of his coercive powers. His intimidating ways is what added to the end of the organization. During a critical point several years before the collapse he or his ego refused the help that was being offered during a time where the organization could have been saved. This decision on his part cost the American economy it’s ability to flourish.

Richard Fuld engaged in behavior that was morally wrong. He was intoxicated with his idea of power and influence. He convinced himself that he was working for the greater good but fell to deep into his dark hole. The elements of power corruption present in this case are...