Should a business continue to expand indefinitely? Or can it get to a point where it is time for it to stop? Now, these questions may look and sound completely dumb to begin with. After all, the whole point of being in business is to make a profit; and the bigger your company gets, the more money it is going to rake in! However, let’s just stop and think about this for a moment…
Ever since Bod Diamond resigned due to the Libor scandel, Braclays for all intensive purposes has been without a boss. They were effectively in the same situation back in 1998 when Martin Taylor quit over a disagreement in strategy.
Where back in 1998 the bank actually did very well, retails bank profits raising by nearly 17%, this however is unlikely to be the situation this time around.
The business has massively changed since 1998 and now is not the time to be doing business without a chief executive. The market has changed too, Barclay have increase the income from investment banking by 500%.
Whoever does end up filling his shoes has one hell of a job ahead of them. Diamond target for last year was to produce a return of 13% which he only achieved 7.5%.
An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today. - Laurence J. Peter