NAB’s Rogue Trader

1. What were the main sources of power that Luck Duffy used to keep everyone in line with his irregular business practices? Describe how we applied these power sources to influence employees and senior executives. The main source of Luck Duffy is from legitimate power which is an agreement among organizational members that people in certain roles can request certain behaviors of others. Legitimate power gives employer’ right and obligation to ask employee what tasks to perform. In this case, Luck Duffy who ran NAB foreign currency options desk wants Gentilin demand loyalty and don’t want he going to Dillon about what’s happening in the team.

2. What contingencies strengthened Luke Duffy’s power at NAB foreign currency options desk? Visibility strengthened Luck Duffy’s power at NAB foreign currency options desk. Because the power does flow to unknown people in this bank. In this case, Gentilin described that Duffy, Dillon and a few other senior traders were “untouchables” who were given free rein at NAB due the their expertise.

3. What can companies do to minimize this sort of abuse of power and influence? Alternative 1: This company should do audit periodically, the audit can immediately find wrong-doing among employees and employers. Alternative 2: Coalition Formation: the people who find problems of power flow in organization and lack of sufficient power alone to influence others in the organization, they should ask people who can support the proposed change. Alternative 3: Upward Appeal: this action is that someone with higher authority or expertise is called on to support the influencer’s position. In this case, Gentilin asked Vanessa who is a junior NAB trader in Melbourne to look at Duffy’s transactions.