Contents ...................................................................................................................................... 2 1.0 Introduction ....................................................................................................................................... ......................................................................................................................................... ........................................................................ .. 3 2.0 Summary ...................................................................
3.0 Ethical Theories .................................................................... ................................................................................................................................ ............................................................ 5 ................................................................................................................................ ............................................................ 5 3.1 Individualism .................................................................... ................................................................................................................................ ............................................................ 7 3.2 Utilitarianism .................................................................... ............................................................................................................................... ........................................................................ ..... 8 3.3 Kantianism ............................................................
4.0 Views and Arguments ..................................................................................................................... ...................................................................................................................... .. 9 ...................................................................................................................................... ..................................................................... 10 5.0 Conclusion ................................................................. ........................................................................................................................................ ..................................................................... 11 6.0 Reference ...................................................................
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1.0 Introduction
For Business Ethics assignment we choose option from the list movie which is “The Wolf of Wall Street”. Furthermore we also watch that movie to analysis business ethics on that movie
Wolf of Wall Street. This movie is a 2013 American biographical black comedy crime film directed by Martin Scorsese and written by Terence Winter , based on the memoir of the same name by Jordan Belfort. It recounts Belfort's perspective on his career as a stockbroker in New York City and how his firm Stratton Oakmont engaged in rampant corruption and fraud on Wall Street that ultimately led to his downfall. The movie deals with many ethical issues. This movie plays by character Leonardo DiCaprio who was also a producer stars as Belfort, with Jonah Hill as his business partner and friend Donnie Azoff, Margot Robbie as his wife Naomi Lapaglia and Kyle Chandler as Patrick Denham, the FBI agent who tries to bring him down.
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2.0 Summary
The Wolf of Wall Street is a 2013 American biographical black comedy crime film directed by Martin Scorsese. The screenplay by Terence Winter is adapted from the memoir of the same name by Jordan Belfort. It recounts Belfort's perspective on his career as a stockbroker in New York City and how his firm Stratton Oakmont engaged in rampant corruption and fraud on Wall Street that ultimately led to his downfall. Leonardo DiCaprio who was also a producer stars as Belfort, with Jonah Hill as his business partner and friend Donnie Azoff, Margot Robbie as his second wife Naomi Lapaglia and Kyle Chandler as Patrick Denham, the FBI agent who tries to bring him down. Matthew McConaughey, Rob Reiner, Jon Favreau, Joanna Lumley and Jean Dujardin are also featured.
In 1987, Jordan Belfort procures a job as a Wall Street stockbroker for L.F. Rothschild, employed under Mark Hanna, who quickly entices him with the sex- and drugs-fueled stockbroker culture and teaches him that a stockbroker's only job is to make money for himself. Jordan soon finds his career terminated following Black Monday and takes a job at a boiler room brokerage firm on Long Island that specializes in penny stocks. Thanks to his aggressive pitching style and the high commissions, Jordan makes a small fortune.
Jordan befriends his neighbour, Donnie Azoff, and the two found their own company. They recruit several of Jordan's friends, whom Jordan trains in the art of the "hard sell". The basic method of the firm is a pump and dump scam. To cloak this, Jordan gives the firm the respectable-sounding name of Stratton Oakmont. After an exposé in Forbes, hundreds of ambitious young financiers flock to his company. Jordan becomes immensely successful and slides into a decadent lifestyle full of prostitutes and drugs. He has an affair with a woman named Naomi Lapaglia. When his wife finds out, they divorce, and he marries Naomi. Meanwhile, the SEC and the FBI begin investigating Stratton Oakmont. Jordan illegally makes $22 million in three hours upon securing the IPO of Steve Madden. This brings him and his firm to the attention of the FBI. To hide his money, Jordan opens a Swiss bank account with corrupt banker Jean-Jacques Saurel in the name of Naomi's Aunt Emma, who is a British national and thus outside the reach of American authorities. He uses the wife and in-laws of his friend Brad Bodnick, who have European passports, to smuggle the cash into Switzerland. 3
Donnie gets into a public brawl with Brad, and, while Donnie escapes , Brad is arrested. Jordan also learns from his private investigator that the FBI is wiretapping his phones. Fearing for his son, Jordan's father advises him to leave Stratton Oakmont and lie low while Jordan's lawyer negotiates a deal to keep him out of prison. Jordan, however, cannot bear to quit and talks himself into staying in the middle of his farewell speech. Jordan, Donnie, and their wives are on a yacht trip to Italy when they learn that Aunt Emma has died of a heart attack. Jordan decides to travel to Switzerland immediately to settle the bank account. In order to bypass border controls, he forces his yacht captain to sail to Monaco, but the ship is capsized in a storm. After their rescue, the plane sent to take them to Geneva is destroyed when a seagull flies into the engine. Jordan takes this as a sign from God and decides to sober up.
Two years later, the FBI arrests Jordan because Saurel, arrested in Florida on an unrelated charge, has also informed on Jordan. Since the evidence against him is overwhelming, Jordan agrees to gather evidence on his colleagues in exchange for leniency. Fed up with Jordan's lifestyle, Naomi tells Jordan she is divorcing him and wants full custody of their children. Jordan loses his mind and tries to run off with Skylar in his car, but he ends up crashing in the driveway. The next morning, Jordan wears a wire to work but slips a note to Donnie warning him. The FBI discovers the note, and Jordan is arrested for breaching his cooperation deal. The FBI raids and shuts down Stratton Oakmont. Despite this one breach, Jordan receives a reduced sentence for his testimony and serves three years in a minimumsecurity prison. After his release, Jordan makes a living hosting seminars on sales technique.
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3.0 Ethical Theories
3.1 Individualism
The theory of individualism which was established by Milton Friedman states that the goal of a business is to solely make a profit, in order to do that the obligation of a business person is to maximize profit for the owner and the stockholders. Through the eyes of this theory Jordan Belfort’s action would be considered unethical. Do to the charges pressed against the
firm, its partners, and the owner the company no longer exists so the obligation of maximizing a profit no longer exists. Along with the company falling apart Belfort has to pay an amount of $110.4 million dollars in restitution which puts him at a dramatic loss compared to the income him and his firm once accumulated.
He acted on that self-knowledge by quitting his job and establishing his own firm. He discovers his style of employing subordinate with unethical background. And develop a high pressure sales stock tactics that manipulate clients. He remained consistent with this selfknowledge to obtain his success and reputation by insisting not to resign even though the FBI was out for his head.
Belfort leadership styled exhibited Transformational leadership. He was able to transform the attitude of his employees from what he called losers to winners. He motivated them when they were down. This could be seen in the weekly report that he was giving his subordinate and how he makes them understand that his firm is where people dreams could come true. Again, when his subordinate became disappointed in the IPO of Steve Maden, he gave them one of the greatest motivational speeches that build their confidence and just in two days they were making millions on the stock market. He adopted the strategy of targeting and selling to the upper class in society to meet his organizational vision.
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Belfort empowered his Middle managers to not care about the client, but should only concentrate on putting food on the table. This he meant could only be done by moving the money from the clients pocket into their pocket. Belfort rewarded his entire subordinate in the form of paying big bonuses, organizing lavishing parties with expensive drinks, and sexual favours. In return for this offer, these subordinate are ready to bend their own morals and national laws for the company. Belfort was using transactional leadership style as a strategy to coerce his subordinate into doing what he wants. Belfort’s leadership style could also be seen as a Charismatic leader; the leader manages to make the follower identifies themselves with the leader or the social group which helps them to boost their self-esteem and self-worth.
As our recommendation, a good leader should use the leadership style in an ethical way so that he can benefit not only himself, but also his employees, his customers and also the stakeholders of the company. A good leader also knows how to separate the good and the bad in his line of work. Jordan Belfort in many ways can be seen as an effective leader as he can manage and convince his employees that he is doing the right thing for his company, and his employees listens to him and does what he wants, but due to his corrupted moral compass, he misused this ability to make a profit for himself and his close friends.
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3.2 Utilitarianism
John Stuart Mills, one of the main backers of the utilitarianism theory, says that happiness and pleasure are the only the things of inherent value and people should bring about these feelings since it is something all people are capable of feeling. To help understand Utilitarianism it can help to weigh the pros and cons of each of the main stake holders. In the case of Stratton Oakmont the most important stake holder would be its clients. Stratton Oakmont’s obligation to their clients was to ad vise them into making smart financial decisions
about what stocks to invest in, in order to make a profit on their return. But, instead they advised people to invest in stocks that they knew the company had accumulated shares and by purchasing the recommended stocks the price of that stock would increase. So once the price was high enough Jordan and his partners would sell the stock for a massive profit, leaving the people they were supposed to help, out thousands of dollars.
The next stakeholder would be the employees of Stratton Oakmont who did benefit and gain happiness from the illegal activities of the firm and were able to make a good deal of money from the work they were doing. But in the end this happiness that came from the companies left these people without jobs due to the company is shut down, and some even having criminal charges pressed against them. The final stakeholder would be Jordan Belfort and his partners who lived a lavish life from millions of dollars there were making illegal or not these men were certainly happy. But, now most are in prison or like Belfort paying back the millions of dollars he took from people by being dishonest. So in the end what they did was unethical because there actions led to their clients being unhappy form the fact they lost thousands of dollars to dishonest people. Now the same dishonest people are suffering from the hardship to which they brought onto the people they were hired to help. So in the end when looking at this theory their actions were unethical and led to no one being able to say the outcome brought happiness or pleasure.
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Our suggestion would be to implement a board of directors or overseers to watch over the direction that senior management is taking the company. This board of directors would be responsible for approving: all company business transactions; weekly, monthly, and yearly brokerage sales meetings and speeches; and lastly company sponsored events. Ultimately, if employees are no longer under the manipulative control of Jordan, they would realize the implications of their business practices and could work to make appropriate changes.
3.3 Kantianism
The next theory was developed by Immanuel Kant which involved people having consistent actions and think sensibly, but at the same time help other make those same rational decisions and respect people differences and needs. This theory also states that these actions should be motivated by goodwill, or doing what is right because it is right. What Belfort did with Stratton Oakmont goes completely against this theory, instead of looking out for others and helping people invest their money in a financially responsible and smart way Belfort tricked and deceived these people. Instead he had them invest in stocks that he knew would crash and destroy their investment and would benefit him dramatically financially to support his extravagant life style. By doing this did he not only make irrational decisions he made the people he employed make these same irrational decisions to help his company grow. He taught them to do whatever it took to make money and even if it meant illegal activity and being untrustworthy to the many clients they represented and advised.
What we can suggest is that a company need to put their customer’s needs and wants
first by advising their customers on the stocks that can give great returns and avoiding giving them bad advices to make them trustworthy. Belfort could have helped people invest their money into stocks that could have brought great returns and taught his staff of over 1,000 employees to do the same but he didn't. He looked for his own best interest and people would realize sooner or later that the actions of Belfort and Oakmont Stratton were unethical.
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4.0 Views and Arguments
In our opinion, The Wolf of Wall Street was how closely it resembled Goodfellas, Martin Scorsese’s masterful account of mob informant Henry Hill’s life in organized crime. Like that historical snapshot of the American Dream colorfully run off the rails, the more recent film tracks the wanton greed and excessive personal behaviors of Jordan Belfort (played by Leonardo DiCaprio) during the 1990s. Belfort made tens of millions of dollars selling “penny stocks” and manipulating the stock market through his firm, Stratton Oakmont, before being
convicted of securities fraud and money laundering. The Goodfellas parallel, in particular, urges Scorsese’s current production to be viewed as a cautionary tale of unbridled Capitalism. But what else the film says specifically about “Wall Street” or contemporar y business and
markets is less clear cut. In ways similar to the film's preoccupation with the dissipated indulgences of DiCaprio’s Belfort, we tend to focus on individual leaders and their actions.
Consider a few of the prevailing narratives of business today: the visionary entrepreneur, the rapacious exploiter, or the small businessman at the heart of the economy. Some corporations do acquire a collective identity that shapes their stories – Enron as the hubristic “smartest guys in the room” or Goldman Sachs as a “great vampire squid." But companies that take on such
depictions are exceptions.
In Hollywood and the wider public imagination, alike, our tendency is to simplify and dramatize the activities of business such as stock trading. At one point in The Wolf of Wall Street’s occasional voiceover, DiCaprio’s Belfort begins to describe the specifics of his trading activities only to acknowledge they don’t really matter to the audience. So he stops. Moreover,
any connection in the film between Stratton Oakmont’s actual dealings in the 1990’s and the ethics of big Wall Street firms’ early trafficking of collateralized debt obligations (CDOs) becomes speculative, at best, as the film’s story increasingly dwells on Belfort’s own spiraling
out of control. The complexity of such activities and any ethical or legal claims to be made about them, much like the operations of other financial entities such as hedge funds or private equity firms, make them difficult (if not impossible) to render meaningfull y in dramatic stories.
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5.0 Conclusion
The Wolf of Wall Street puts us on a rollercoaster ride on the life and styles of the people succeeding in Wall Street. The portrayal of Jordan Belfort as he climbs his way up the business and social ladder is something to give the viewers a glimpse of how mad one person can get while chasing his glory. Through Belfort’s narrative we can see how doing anything you can to succeed can lead the person to be morally corrupt when you give in to the temptations of success and power, and there is no morally conscious voice to prevent you from falling into the dark side.
The ethical issues presented in this film is numerous, more so that roughly every three to four minutes an issue will be presented to the viewers. The issues are heavy in nature, such as committing fraud to the customers of the company, drug abuse, which accompanies most of the other ethical issues shown in this movie, and adultery, which is also prevalent throughout this film. However, the film only vaguely presents the main ethical issue found in it, which is the corrupted operation and shady dealings of a stock broker company. Many times that when Belfort explains how one process to deceive the customers work, he cuts short by saying that the viewers do not care about the details.
In conclusion, this film exposes us on the dangers of uncontrolled capitalism. Adding to that, the evolution of the main character progressively going corrupted also teaches us the importance of having a morally conscious mind and having an ethical and morally conscious friends and family to guide us from straying away the ethical path.
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6.0 Reference Alvesson, Mats (2012) The triumph of emptiness-consumption, higher education and work Organization. Oxford University Press. Capurro, Rafael (2013) Go glocal: intercultural comparison of leadership ethics. Inforpreneurship Journal, 1(1), 1-9. Chandler, Diane (2009) The perfect storm of leaders’ unethical behavior: a conceptual framework. International Journal of Leadership Studies , 5(1).
The Wolf of Wall Street (2013) A movie directed by Martin Scorsese.
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