Business Lessons Could Hold Clues to How Bin Laden’s Death Will Impact Al Qaeda, Economy

MEDIA ALERT: May 3, 2011

Business Lessons Could Hold Clues to How Bin Laden’s Death Will Impact Al Qaeda, Economy

UMD’s Smith School of Business Experts Offer Insights

With the 10-year U.S. manhunt for Osama Bin Laden ending in the terrorist leader’s death, the world is watching for the impacts. Lessons from business could hold clues to how the loss of the leader might impact the Al Qaeda organization and the global economic climate.

Organizational Effects

Professor Paul Tesluk weighs in on how Bin Laden’s death may affect the Al Qaeda organization.

“From a leadership stand point, it’s difficult to predict how Bin Laden’s death will affect Al Qaeda as an organization. On one hand, Al Qaeda has long had a very decentralized organizational structure with distributed leadership, particularly when it comes to running terrorist operations, and Bin Laden has probably had little direct involvement in operational activities in the organization for a long time. That could help them in this situation. At the same time, Al Qaeda has been under enormous pressure by the U.S. in Afghanistan and elsewhere and losing a key figurehead and leader who provides inspiration to the organization’s foot soldiers can be a defeating setback. We can confidently assume that Ayman al Zawahiri, Al Qaeda’s No. 2, will attempt to step in and provide more directive leadership to prevent the already fractured organization from further fractioning.”

Paul Tesluk, professor of organizational behavior and human resource management, co-director of the Center for Leadership, Innovation and Change. Tesluk is an expert on organizational change, shared leadership and teams. ptesluk@rhsmith.umd.edu, 301-405-4968

Economic Effects?

Professor Michael Faulkender says Bin Laden’s death will have very little impact on the global economy.

“Indicated by the lack of movement in markets yesterday, Bin Laden’s death does not alter the fundamentals of our economy. We are still facing massive budget deficits, the onset of inflation, a slow and fledgling recovery of GDP, continued joblessness, and ongoing foreclosures. There will be a lift in the sour mood of the country for a little while but eventually the underlying fundamentals will return us to the same state of the economy we had last week.”

Michael Faulkender, assistant professor of finance, is an expert on global finance, capital structure, risk management and corporate finance. mfaulken@rhsmith.umd.edu, 301-405-1064.