Mark Stein

The critical period of disasters: Insights from sense-making and psychoanalytic theory

The purpose of this article is to deepen our understanding of the period during which a disaster unfolds, here called the ‘critical period’. Previous research has shown cases in which sense-making is essential for survival during this period, but it is argued here that there are other cases in which sense-making compounds the problems. Drawing on psychoanalytic theory, the capacity for anxiety toleration is postulated as a moderating variable that influences whether correct sense can be made of the situation, and, in turn, whether the likelihood of survival will increase. Implications for theory are examined.

Unbounded Irrationality: Risk and Organizational Narcissism at Long Term Capital Management

This article focuses on the near collapse of the highly prestigious hedge-fund Long Term Capital Management (LTCM) in September 1998, causing widespread fears that its demise may lead to global financial meltdown. Explanations pivoting on the idea of bounded rationality - that rationally functioning organizations may collapse because of a lack of information or the capacity to process such information - are found not to apply. The article postulates the irrational functioning of LTCM, and proposes a psychoanalytic theory of organizational narcissism as a means of explanation. This theory comprises well-explored themes of organizational narcissism such as hubris, omnipotence and omniscience, as well as newer themes of contempt, triumph, and the embeddedness of narcissism in the organizations socio-technical system. The article concludes by examining these ideas in relation to other theories of risk as well as the implications for practice.

Toxicity and the Unconscious Experience of the Body at the Employee—Customer Interface:

While the literature on front-line service work utilizes a variety of productive images, I argue that these images do not capture certain of the more problematic experiences of front-line service employees. Drawing on words used by these workers themselves, and using concepts from psychoanalysis and its application to organizational dynamics, I therefore propose a new image, that of toxicity. I argue that — especially when under severe pressure from customers — front-line workers may have the unconscious fantasy that they have been polluted by toxic substances. The unconscious experience of the entry of toxic material is likely to result in further contagion of relationships such as those among employees and between employees and customers. This may also result in workers retaliating against customers by exacting revenge on them. A downward spiralling of relationships may follow, with the result that large parts of the work environment are experienced as toxic. The implications for theory are explored. In conclusion, I argue that the theme of toxicity helps us connect the employee—customer interface with a deep reservoir of primordial human experience that links the body with emotions.

When Does Narcissistic Leadership Become Problematic? Dick Fuld at Lehman Brothers

Driven by intense needs for power and prestige, narcissists all too frequently are to be found in leadership positions. Drawing on the dichotomy outlined in the literature that some narcissistic leaders are “constructive” (helpful) whereas others are “reactive” (unhelpful) to their organizations, I offer a new approach by reframing the debate and arguing that, at different times, a single individual may be both constructive and reactive. I draw on concepts from psychoanalysis in this formulation. I also argue that a downturn in the environment is the key factor that may lever a constructive narcissistic leader to become reactive. I use the example of Dick Fuld—whose leadership at Lehman Brothers was at the eye of the 2008 credit crisis storm—to illustrate this. A key implication is that constructive narcissistic leaders may be incubating problems that only become manifest at a later stage.

A culture of mania: a psychoanalytic view of the incubation of the 2008 credit crisis

In this theoretically informed study I explore the broader cultural changes that created the conditions for the credit crisis of 2008. Drawing on psychoanalysis and its application to organizational and social dynamics, I develop a theoretical framework around the notion of a manic culture, comprised of four aspects: denial; omnipotence; triumphalism; and over-activity. I then apply this to the credit crisis and argue that the events of 2008 were preceded by an incubation period lasting for over two decades during which a culture of mania developed. Then, focusing especially on the Japanese and South East Asia/LTCM crises, I argue that a series of major ruptures in capitalism during this incubation period served not as warnings, but as opportunities for a manic response, thereby dramatically increasing the risks involved. I also argue that this mania was triggered and strengthened by triumphant feelings in the West over the collapse of communism. I suggest therefore that this manic culture played a significant role in creating the conditions for the problems that led to the credit crisis.

The Othello Conundrum: The Inner Contagion of Leadership

The purpose of this paper is to contribute to the literature on leadership, emotions and organizations by examining Shakespeare’s Othello. While much of the existing literature focuses exclusively on the external dimensions of leadership, this paper adds a new dimension by focusing as well on the internal workings of the mind of the leader, here that of Othello. This focus is made possible by postulating that the subordinate Iago — whose relationship to Othello is central to the plot — represents an inner character within Othello’s mind, as well as an external character. As an inner character, Iago fills Othello’s mind with powerful feelings of jealousy and envy, especially about an alleged relationship between Othello’s wife and his lieutenant, Cassio. Othello’s conundrum thus concerns whether he should tolerate these feelings and live with his uncertainty about his wife’s purported infidelity, or, alternatively, try to rid himself of these feelings by killing her and Cassio. Concepts from psychoanalysis and a variety of other traditions are drawn on. Following this, there is an exploration of a contemporary reference, that of the demise of the Gucci family dynasty. The paper ends with an examination of the implications and a conclusion.

Envy and Leadership

This article suggests that envy is entwined with leadership in a number of complex and potentially problematic ways. It examines how aspects such as skill, power, authority, and prestige that are associated with leadership may evoke the envy of subordinates and colleagues. Envy may also be stirred up in the leader s family, friends, and colleagues outside the organization. Equally, leaders themselves may be prone to feeling envious of subordinates, colleagues, and others who they feel may threaten their position. Based on research using psychoanalytic concepts, it is suggested that because envy is so painful to bear it is often consigned to the unconscious, so that those who are envious are unaware or only partly aware of the extent and nature of their feelings. This can result in the subtle, indirect and often insidious expression of envy which undermines leadership and interferes with the effective running of the organization.

The Dark Side of Groups: A “Gang at Work” in Enron

The purpose of this article is to develop our understanding of the gang aspects of work organizations. By applying a psychoanalytic lens, we formulate the ideas of the “gang at work” and “intraorganizational ganging dynamics,” thereby initiating a research stream on the “dark side of groups.” We illustrate our conceptual development by drawing on the Enron case thereby contributing unique group-level insights that complement other analyses of the phenomenon. We conclude by identifying areas for further research and arguing that gang phenomena may also have been present among many of the key organizations at the centre of the credit crisis, such as Lehman Brothers.

Projective identification in management education

Projective identification occurs when an individual or group, unable to bear certain features of their own reality, unconsciously splits these features off and projects them into another individual or group. As these features do not reside in the conscious minds of those who do the projecting, they are not available in their minds for scrutiny, understanding or learning. These projections also endow the recipients with unmanageable feelings and characteristics which are not of their own making, and may thereby have a detrimental effect on them and their relationship with those who do the projecting. This paper examines two case examples attempting to throw light on the implications of this concept for management education. The first emerges from a supervisory relationship with a mature student, while the second looks at an experiential group in a “working conference”.

Double Trouble: Sibling Rivalry and Twin Organizations in the 2008 Credit Crisis

The purpose of this paper is to introduce and explore the novel idea of highly similar ‘twin organizations’. Drawing on psychoanalytic theory in his formulation, the author argues that the closeness of organizational identities in twin organizations may lead to increased rivalry, narcissism and a tendency for greater risk‐taking and vulnerability. Four of the biggest casualties of the 2008 credit crisis – two UK banks (HBOS and RBS) and two large US financial institutions (Fannie Mae and Freddie Mac) – are used to illustrate this conceptual development. The contribution of this paper is fivefold. First, this paper contributes the theoretical innovation of the idea of twin organizations to the organization studies literature. Second, it casts a fresh light on four of the organizations that got most deeply into trouble in the credit crisis. Third, it contributes to other areas of organizational scholarship, specifically the theory of risk and the theory of organizational identity. Fourth, this paper acts as a warning by identifying similar phenomena in the ongoing Eurozone crisis, and fifth, it contributes to the understanding of risk‐management practice and organizational consultancy.