Hi,

Just read Matt Slater’s great post on the issue of going into administration for Portsmouth Football Club.  Some of you may not be football fans – that’s not important.  Step beyond the content and look at the human behaviour here:

Self-interest, poor management, living in debt, finding the next sap to take your pain, poor regulation, smaller enterprises or individuals taking the hit, legislation/priorities paying the big players to keep the game going…at the expense of others, all reinforced by a public [fans/consumers] wanting more or accepting the stuff behind the scenes because you don’t feel it’s your responsibility, or you don’t feel you can affect it.

If you’ve read some of my other posts you might recognise these same themes cropping up time and again.  Is that because I am tuned into them, or because they are fundamental human patterns [albeit in certain situations]?

Not that I bothered to write about the banking situation and credit crunch much.

Take another situation, RBS bank, from the BBC today:

Royal Bank of Scotland announces £3.6bn of losses

RBS says its results would have been better if it had paid bigger bonuses

Royal Bank of Scotland (RBS) has announced losses for 2009 of £3.6bn ($5.5bn), after struggling with billions of pounds of bad loans.

Mr Hester told BBC Radio 4’s Today programme RBS had lost out by not paying bigger bonuses.

“We’ve had a small experiment in this respect… some of our best-performing people have been leaving in their thousands,” he said.

“The people who left us last year, I believe, would have increased our profits by up to a billion pounds beyond the ones that we’ve got.”

So the Chief Executive believes that by not paying more to ‘players’ they lost out.

This sounds not dissimilar to Portsmouth Football Club – if they can’t pay the fees/wages for top notch players they’ll not win.  Whilst the bank has been bailed out by the taxpayer, PFC is unlikely to be.

PFC had a history of finding the next person to shoulder the debt, until it’s got to the point where there may be no other ‘idiots’ as Matt Slater refers to them.

Yes, part of RBS is profitable [investment banking I'd guess - those staff up for the big bonuses], so I’m sure are parts of PFC [the bar perhaps, maybe the shop].

Yet aren’t the patterns pretty similar?

What does this tell us about both human behaviour and the culture of modern countries as there are lots of other examples of this.

All the best,

Finn

PS: Do such circumstances warrant compliance with those who ‘demand’ a big salary/fee for their services?  Or is such behaviour just feeding the problem?

Tags: Crisis, Culture, Decision-making, Governance, Group behaviour, Individual behaviour, Leadership, Patterns, Responsibility, Risk, Wealth

This entry was posted on Thursday, February 25th, 2010 at 10:58 am and is filed under Culture, Group behaviour, Individual behaviour. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.