Study title

What caused the financial crisis of 2007-10? Many, including the British Chancellor Alistair Darling, have blamed the 'irresponsibility' of investment bank managers. Such an accusation of poor performance of managers is plausible given the fact that financial institutions have been in the forefront of adopting various change programmes to enhance their viability. A review of existing evidence reveals that the managers reacted 'irresponsibly' to 'contextual forces', such as the perception of risk, decline in bank capital, regulatory burden and supervisory overreaction. But why did they do so? We need to understand how different contextual forces were understood by the managers, and why they reacted to them as they did. Unfortunately, the literature shows little insights into a playing out of managers' orientations and contextual forces. This project argues that depending on the nature and specific peculiarities of each contextual force and condition, managers adopt and apply different assumptions and orientations at different times in the process of planning change and managing their organisations. Contingent upon these factors, managers could not act completely rational in their orientations and follow-up decisions and actions. This project will rectify this by undertaking a longitudinal tracer study on investment bank managers.