Helga Drummond

The politics of risk: trials and tribulations of the Taurus project

The term ‘risk management’ implies that risk is something which can be quantified, predicted and controlled. This paper seeks to demonstrate the limits of this assumption where complex projects are involved. The argument is based upon a case study of a failed £80 million IT venture known as Taurus. Analysis focuses upon the relationship between politics and the assumption of risk. Acceptance of risk, it is argued, is ultimately determined by the balance of power between decision makers. Moreover, risk analysis and other techniques of management may actually compound the difficulties by fostering an illusion of control and escalation. The implications for project management are discussed.

What we never have, we never miss? Decision error and the risks of premature termination

The history of IT systems construction contains many examples of large-scale failures that were compounded by undue persistence – a phenomenon known as escalation of commitment. Yet organizations also need to guard against erring in the opposite direction, that is, terminating (or never starting) a project that, on economic grounds, ought to be completed. This paper highlights the notion of premature termination, suggests why such errors are possible and discusses the implications for practice.

Are we any closer to the end? Escalation and the case of Taurus

Abstract The collapse of project Taurus, a £500 million IT venture commissioned by the London Stock Exchange, ranks as one of the major fiascos of business history. This paper examines key events in the design and construction of Taurus with reference escalation theory. Escalation theory concerns the tendency of organizations to become trapped in failing projects like Taurus and to persist with them irrationally. Two features of escalation and subsequent failure are highlighted. First, the destructive progression whereby one sub optimal decision forces another. Second, a process of means/ends reversal whereby a pre-occupation with delivering Taurus obscures the reality that Taurus is no longer worth delivering.

Living in a fool’s paradise: the collapse of Barings’ Bank

Recalls that the collapse of Baring’s bank showed what may lie behind an apparently successful organization. Barings was destroyed by the unauthorised activities of a trader named Nick Leeson. For almost three years Leeson deceived the bank by appearing to earn phenomenal profits, while in reality incurring massive and ultimately catastrophic losses. A striking feature of the bank’s collapse is that it was both sudden and total. No one had the least suspicion of impending catastrophe despite the emergence of clear signs of malfeasance. The article explains why Barings’ management failed to respond effectively to those danger signs and considers the lessons to be learned.

Riding a tiger: some lessons of Taurus

The collapse of project Taurus, the London Stock Exchange’s £500 million IT venture, ranks as one of the major fiascos of business history. This paper highlights key mistakes in the project’s design and construction and discusses their implications for management.

Crisis Management in a Small Business

Explains why, of all organizations at risk in the current economic recession, small businesses are the most vulnerable. Confirms that downturns are typically rapid and the prognosis poor, and that the emotional and financial hardships of personal bankruptcy are often severe. Challenges the popular management literature which urges decision makers to follow their intuition, on the ground that intuition is frequently biased and therefore likely to result in the wrong choices. In contrast to the intuitive response to crisis, which is contraction, seeks to demonstrate, through two case studies of small solicitors′ firms, why expansion, although it is apparently the more risky option, may be the best means of survival.

Did Nick Leeson have an accomplice? The role of information technology in the collapse of Barings Bank

This paper analyses how Nick Leeson exploited information technology (IT) in order to trade without authority and thereby causing Barings Bank to collapse. What emerges suggests that, not only can IT systems enable malfeasance on a large scale, but that very little specialist knowledge is required in order to turn the computer into an accomplice. The most disturbing feature of the Barings Bank debacle is the contrast between the mundane act of suppressing a control mechanism and the consequences that flowed from this act. It is argued that organizational security ultimately lies in knowing the limits of ones information.

Go and Say, "Wére Shutting": Ju Jutsu as a Metaphor for Analyzing Resistance

While it is well known that employees in organizations may successfully resist managerial impositions, relatively little is understood about how resistance operates. The present study utilizes a martial arts metaphor known as ju jutsu to generate insights for understanding how resistance is exercised. The ju jutsu metaphor was chosen because it is a defensive technique whereby a physically weaker person may resist a much stronger one. Ju jutsu as metaphor suggests resistance can be exercised by systematically employing bodily movements which disturb an opponents balance and/or strike at physiological weak points. By exploring a case study of a successful example of organizational resistance, the ju jutsu metaphor is utilized to generate new perspectives for conceptualizing and analyzing the dynamics of resistance.

Should Organizations Pay for Quality

TQM creates a dilemma for organizations. The dilemma is that TQM implies increased employee responsibility at shopfloor level. Increased responsibility traditionally equates with increased pay. The TQM gurus however advise that monetary rewards are likely to prove counterproductive. Analyses the problem and examines the potential impact of coercive and symbolic power as alternatives to material reward. Concludes that, although little can be achieved by rewarding contributions with money, neither of the alternatives are workable. The answer lies in matching increased responsibility with increased control. Suggests that organizations which succeed in adjusting this balance may gain a competitive advantage ahead of the Japanese.

MIS and illusions of control: an analysis of the risks of risk management

Dysfunctional MIS is an important topic but one that has received comparatively little attention in the literature. This discussion paper attaches new literature to the subject. The new literature centres upon the epistemological status of certain forms of MIS. More specifically, it is argued that MIS, based upon metonymy (part for whole substitution), can seriously mislead managers because the representation gets mistaken for the reality. The demonstration is based on high level risk registers. Risk registers were selected for analysis because they are ubiquitous and important decision support systems. In theory, diligent use of risk registers should virtually eliminate unpleasant surprises. In practice, the result may be an illusion of control. Analysis draws upon sociology and psychology to explain why this may be so.