Ethical Decision Making

Barbarians at the Gate

The film Barbarians at the Gate is about a self-made millionaire, F. Ross Johnson, who takes over a tobacco company RJR Nabisco with self-interests regarding a foreseen market failure. Johnson, the CEO begins leveraging buyouts (LBO) so that he can avoid taxes through the foreseen market crash, and thus make himself, among other wealthy people more prosperous. The LBO leads to the loss of fortune for shareholders and hurts the company. Throughout the file, managers and wealthy people are depicted as a profit motivated and are willing to override all ethical concerns in the business.

In that perspective, the company overlooks the investor’s needs – to generate profits, such that decisions made are tailored to enrich Johnson and his crew. They do not care about the health implications of their cigar customers, as long as sales are high so that they can make more profits. Also, they let in investors who are not cigarette smokers but were willing to buy stock. Johnson’s administration is willing to pay $45 million for an hour, claiming to the best investor’s interest. This is a strategic move to ensure that there will be more than one person in the bidding process, but cheat in the LBO process, and enrich the selected few. That way, the CEO and his significant other in the company aims at profiting at the expense of the company’s shareholders.

I would mitigate these ethical issues and misconduct through legislation. Therefore, I would increase the level of legal counsel for both shareholders and management and ensure that both internal and external audit reports warrant the company’s decisions. Besides, I would also disclose the decisions and strategies regarding foreseen economic situations to shareholders and the public.

Enron- The Smartest Guys in The Room

The film is based on one of the arguably ugly business failures in the US, which happened on Enron. Enron was founded in 1985 as a pipeline company selling power utilities. In 2002, it was listed as the 6^th largest global energy company, but by in 2^nd of December the same year, it filed the biggest bankruptcy case. The film depicts the precedent of events and conduct of unethical employees, which led to the failure of Enron.

Some critical impressions include the harsh business environment and company culture, which focus on competition and meeting financial goals. That is, employees performance appears more important, leading to a significant loss of foci on the importance of ethical standards. The CFO Andrew Fastow insists that employees must be competent, and must not doubt the competencies of the executives. Employees whose performance is below the rating metric of the company are forced to leave the company. That leads to a culture of deception, cheating, and covering up of errors by employees so that their KPI can remain above minimum performance rating. Besides, most employees and executives such as Jeff Skilling prioritize their financial goals, such that any business deal promising a financial gain is adopted without evaluation. The cumulative effect of these cheating, non-questionable, erroneous culture lead to the failure of Enron.

As an employee or executive, I would stringently bar fraudulent behavior, since it is illegal and unethical. I would also create room for evaluation and audits, to measure the competencies of each employee and the company management. Thirdly, I would disclose information regarding the company operations, despite risking the employment position. Lastly, I would not hide errors or facts about deals that reveal incompetence.

Inside Job

The Inside Job is a 2010 documentary that probes events that led to, occurred, and happened after the 2008 financial crisis. As narrated by Damon, the film explored global financial hotspots, interviewing critical financial and political players. The interviews reveal what Charles Ferguson calls “an industry out of control.” That is, significant political and financial influencers made decisions in arrogance greed, unethical behavior, and without accountability.

The documentary reveals poor leadership and systemic compromise to the economic paradigms in the US. For instance, Frederic Mishkin fails to explain the intention of the co-authored report titled “Financial Stability in Iceland.” It is clear that over time, the principles of economics had been deconstructed such that economists, some in high positions of influence advocates for deregulation and compensation schemes that can hurt the market. Besides, the economic leadership system is mostly corrupt. For instance, Mishkin also fails to justify that as the Governor of the Federal Reserve System up to 2008, he had not seen the financial crisis, yet he resigned moments before the crisis. Mishkin’s claim that he resigned to revise his book, which is seldom to believe.

Also, the film reveals the unethical financial operations such as predatory lending that did not concern the welfare of borrowers. Lehman to Goldman Sachs claims that the mortgaging and lending systems were tailored through ingenious policing and leveraging so that customers would be objectified in the crisis. They (financial players) failed to honor customer’s trust.

Since the film accounts for economic or financial and political ignorance, I would focus on political and financial methods to prevent another crisis. Firstly, corrupt and greedy leaders ought to be brought down positions of influence. Secondly, I would encourage policymakers to focus on the long-term implications of policies that concern the economy. Thirdly, all predatory practices ought to be terminated, and legal actions taken against involved agencies and individuals.