Change actions Triggers -"change before you are forced to"-unknown

Change management.Role of crisis -change triggers

British banking  -One man and huge fraud

Greed is universal phenomenon irrespective of culture, nationality and the greed for easy money 

and more money intoxicates especially all those who are in positions of   power that can be used to 

manipulate things in their favor. It is said that power corrupts and absolute power corrupts 

absolutely.

Secondly, there are always weaknesses in the system which greedy individual have had the 

cleverness and capability to exploit. The Barings Bank of UK was brought to total ruin because of 

one man’s greed with power to manipulate. Ramalinga Raju CEO of Satyam could manipulate 

things because of greed combined with  an unbridled power to exploit and fool everyone around and 

amass wealth . Enron was brought down by Kenneth lay for the same reasons.

Risk management is an essential part of managing crisis and consequent changes and everyone 

understands the need for risk management especially in financial and banking sectors .Calamity 

strikes catastrophically mainly due to managerial apathy to have sound risk  management system 

despite massive frauds  hitting big and small organizations all over the world . Barings bank is  

an example of total managerial apathy.They failed to have: (1) risk evaluation, categorization, 

and prioritization criteria and (2) risk management requirements (control and approval levels, 

reassessment intervals, etc.).

Barings bank’s scam is an  example of leadership  arrogance and refusing to change with time . 

This created the inability to deal with any sudden crisis and was an exhibition of  complete lack of 

leadership will.In February 1995, one man single-handedly caused the demolition of this  bank that 

had a long history over two  centuries. The bank used to pride itself about having  financed the 

Napoleonic Wars, Louisiana Purchase and the Erie Canal . Founded in 1762, perhaps no other bank 

in  theUK could  boast Queen Elizabeth’s personal bank.

The fraud was committed  despite the truly conservative non-risking type of culture and claim 

of  well-established practices. Nick Leeson was the derivatives broker and was nick  named rogue 

trader  .He had the authority to handle low-risk arbitrage opportunities between derivatives 

contracts on the Singapore Mercantile Exchange and Japan’s Osaka Exchange. 

As the general manager, the position power enabled  Nick Leeson with total control of both trading 

and back office functions.This enabled him to operate beyond and outside the  controls which were 

usually part made for  checks and balances in the  systems. All of Barings senior managers had 

traditional merchant banking background and risky speculative trading was not their domain. The 

freedom available to Nick Leeson could easily be  used to indulge in uncontrolled speculation in 

the stock index futures and Government bonds. These speculations were similar to high-risk Poker 

bets  and the outcome of  a highly leveraged trade would have  led  to either huge gains or very big 

losses.

This  category of high-risk speculations was never the  Barings bank's  type and they would have 

never approved taking up 29 $ billion worth positions in just one month alone through reckless 

speculative trading .Leeson was no rookie to be unaware of  the risk and he was committed to play 

this   high-risk game. Market did not move in the direction he had predicted to himself and crisis 

came from nowhere and hit the bank like tsunami once the liabilities went out of control.

The reasons for this catastrophe was nothing but the  obsession with status quo and self-denial  .

Refusing to Change with times   can cost the organization.

..readon