‘Masters of the Universe’: Demystifying Leadership in the Context of the 2008 Global Financial Crisis
| Date | 01 April 2015 |
| DOI | http://doi.org/10.1111/1467-8551.12088 |
| Published date | 01 April 2015 |
‘Masters of the Universe’: Demystifying
Leadership in the Context of the 2008
Global Financial Crisis
David Knights and Darren McCabe1
Department of People and Organization, Open University Business School, Milton Keynes, MK76AA, UK,
and 1Department of Organization Studies, Work and Technology, University of Lancaster School of
Management, Lancaster LA14YW, UK
Corresponding author email: david.knights11@outlook.com
There have been numerous explanations of the 2008 global financial crisis, ranging from
the greed of the bankers to excessive deregulation due to neoliberalism and the financiali-
zation of everything. This paper argues that a discussion of parallels between the crisis and
leadership discourses can generate new insights into both. Through an empirical study of
the subjectivity of leaders in a UK building society, discourses around both leadership and
the crisis are argued to reflect and reproduce similar taken-for-granted assumptions about
subjectivity and representations of organizational and economic life. These are grounded
in the belief that leaders are ‘Masters of the Universe’, who are able to predict and secure
the future. The authors believe that these assumptions and representations contributed to
the crisis and are now in danger of producing yet another bubble.
Introduction
According to De Goede (2005, p. ix), ‘Modern
finance has acquired the reputation of economic
necessity and scientific respectability when less
than two centuries ago it stood condemned as
irreputable gambling and fraud’. In the wake of the
global financial crisis (GFC) of 2008 (Li et al.,
2012), the Libor scandal (Malloch and Mamorsky,
2013) and the mis-selling of mortgage payment
protection insurance (Ashton and Hudson, 2012),
the scientific credibility of banking and finance is
once again questionable. Media and layperson
scepticism seem to corroborate this view, but
within the establishment it is ‘business as usual’
now that limited regulations and solvency arrange-
ments have been established. It is therefore
assumed that little more than another ‘night
watchman’ (Dembinski, 2009) is needed to restore
finance’s damaged reputation.
The crisis has had numerous explanations,
from identifying its genesis in the deregulations of
the 1980s under UK and US neo-liberal political
regimes (Klimecki and Willmott, 2009) to per-
ceiving it as an ‘elite debacle’ of interwoven com-
plexities, involving a proliferation of financial
instruments (Engelen et al., 2011). The excesses of
these instruments could not be curbed when even
insiders, let alone government and regulators, had
no generic ‘overview of the changing latticework
of circuits’ (Engelen et al., 2011, p. 9) involved. In
the UK, ‘big bang’ allowed foreign investment
banks to enter the stock market trading floor as
the distinction between jobbers and brokers col-
lapsed, but this created problems of having to
manage conflicting interests internally through
‘Chinese Walls’ between the different functions.
This reconstruction of the financial sector resulted
in the removal of monopolistic restraints on trade,
thereby intensifying competition. In the US, the
Garn–St. Germain Depository Institutions Act
1982 reduced the level of non-interest-bearing
reserves that banks held with the US Federal
Reserve, enabling risky extensions of their loan
© 2015 British Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4
2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.
British Journal of Management, Vol. 26, 197–210 (2015)
DOI: 10.1111/1467-8551.12088
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