I’ve watching events unfold in the global financial markets with a mixture of incredulity and fear – like most other people I suppose. What has transpired in the last couple of weeks would have seemed unthinkable a month or two ago and nobody seems to be able to call the low point in this whole mess.
What strikes me about it is the way in which certain key cultural characteristics – especially in the USA – may have been to key contributory factors to the problems. Let me briefly explain what I mean by this:
• Individualism: A key US characteristic (seen as a virtue in the States) which leads employees to have less of a sense of responsibility to the company and more of a sense of responsibility to themselves. This is one of the great strengths of the US economy but is it possible that, if left unchallenged, it can have the consequence of people making short-term decisions to better themselves at the expense of a greater whole?
• Short-termism: One of the by-products of economies which are mainly equity financed (USA, UK etc.) is that people are driven by quarterly results. This again leads to people taking short-term decisions and looking for ‘quick wins’ at the expense of a more coherent long-term strategy. This short-term outlook is, of course, exacerbated by a bonus culture which rewards people for delivering results NOW.
by Mike Swift