Book

Why Some Firms Thrive While Others Fail

Thomas H. Stanton

Published in print July 2012 | ISBN: 9780199915996
Published online September 2012 | e-ISBN: 9780199950324 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199915996.001.0001
Why Some Firms Thrive While Others Fail

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Why did some firms weather the financial crisis and others not? This book builds on interviews and access to internal documents from over a dozen major financial companies, investigates their workings, reveals what went wrong, and discovers a remedy. A critical difference between successful and unsuccessful firms is a culture that encourages respectful challenge, what the book calls “constructive dialogue.” At successful firms top management engaged in constructive dialogue with the board, a strong management team, and the chief risk officer, among others, in making a decision; firms that failed often featured overbearing (or distracted) CEOs or unit heads, supine boards, incapable management, ineffective risk officers, and poor communications both across silos and up the hierarchy. They often lacked ability to manage the firm as an integrated organization. Companies need good management, and not only good risk management, to stay out of trouble. Successful companies operated with strong information systems and a culture of good communications that brought issues promptly to top management so the company could adjust its operations accordingly. Regulators should use constructive dialogue as a test of good management and require evidence that major business decisions result from a robust process rather than merely the will of powerful CEOs or heads of revenue-producing units. Companies should use their regulator as a potential source of useful feedback. The book concludes by looking at major firms in other industries and finds that its conclusions apply to these companies too.

Keywords: risk management; financial crisis; culture; regulation; hierarchy; CEOs

Book.  256 pages.  Illustrated.

Subjects: Financial Markets

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Table of Contents

Repairing Our Public and Private Institutions in Why Some Firms Thrive While Others Fail

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Dynamics of the Financial Crisis in Why Some Firms Thrive While Others Fail

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Coping with the Crisis in Why Some Firms Thrive While Others Fail

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Company Governance and the Financial Crisis in Why Some Firms Thrive While Others Fail

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Risk Management and the Financial Crisis in Why Some Firms Thrive While Others Fail

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Company Organization, Business Models, and the Crisis in Why Some Firms Thrive While Others Fail

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Supervision and Regulation of Financial Firms in Why Some Firms Thrive While Others Fail

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Hyman Minsky in Why Some Firms Thrive While Others Fail

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Governance and Management in Why Some Firms Thrive While Others Fail

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Governance and Management in Why Some Firms Thrive While Others Fail

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