Unrestrained Empowerment: Value Killer


A bank performs many different functions, but in the long run it has value for its customers only if it handles their money accurately and safely. Therefore the foundation of every role within the bank, whether it is trader, investment adviser, or teller, is the need to do it accurately and safely. To show employees exactly what it means to be “accurate” or “safe,” the banking industry has defined regulatory steps, and each bank has its own internal guidelines. The bank’s employees must adhere to these. This isn’t the only part of their job, but it is the foundational part. Any manager who forgets this, who gives his employees too much room to maneuver, runs the risk of destroying the bank’s value.

All roles demand some level of accuracy or safety, and therefore all roles require employees to execute some standardized steps. Great managers know that it is their responsibility to ensure that their employees know these steps and can execute them perfectly. If that flies in the face of individuality, so be it. Unrestrained empowerment can be a value killer.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight

Knowing about Cartel


A cartel is a group of firms combining to restrict output and raise price, the aim being to balance as a collective monopoly. Each firm in a cartel agrees to produce less than it would under unrestrained competition, in order to drive the price up so that all in the group will benefit.

Cartels can only raise prices by cutting firm outputs. But at the higher prices, member firms are motivated to produce even more than at competitive equilibrium. So the more successful the cartel, the greater the incentive to chisel. Carters therefore require enforcement devices to prevent chiseling. In a number of European countries, the law may treat a cartel agreement as a legality enforceable contract. Some jurisdictions take a neutral position: the cartel agreement is not unlawful, but the power of the state will not enforce it. Finally, the law may be actively hostile to cartels as “consipiracies in restraint of trade.” In such a situation a cartel would require enforcement devices that are both effective and secret—an unlikely combination when any detected chiseler can complain to the authorities.

My Consultancy–Asif J. Mir – Management Consultant–transforms organizations where people have the freedom to be creative, a place that brings out the best in everybody–an open, fair place where people have a sense that what they do matters. For details please visit www.asifjmir.com, Line of Sight