Why is Hollywood preoccupied by predatory entrepreneurs (and what does that mean for business education?
Two of the world's most gifted and inspiring business teachers, Ed Freeman of the Darden School at the University of Virginia and Mark Schwartz of York University in Ontario are both fond of using literature and film to illustrate the fundamental existential and ethical choices posed by the way business operates in our current economic system.
In my experience, contemporary film is an excellent source of inspiration for classroom debates in business strategy, organisational behaviour, ethics and even marketing. From Meryl Streep in Silkwood and Julia Roberts in Erin Brockovich to Russell Crowe in The Insider, award-winning Hollywood actors have portrayed the struggles of lonely idealists fighting corporate predators in industries from energy supply to tobacco.
Indeed, the movie industry delights in vilifying the worst elements of predatory entrepreneurial behaviour - Michael Douglas's portrayal of the wholly amoral Gordon Gecko in Wall Street providing one memorable example - without ever touching on more inspiring stories of enterprise. Trading behaviours that brought the world to the brink of financial collapse in 2008 and which still haunt the global economy today were exposed in Enron: The Smartest Guys in the Room and The Last Days of Lehman Brothers. And for a more dramatic narrative within an African context, The Constant Gardner provided further commentary on the social destructiveness of international business, in this case the pharmaceutical industry.
Now, we have a new movie to add to the list of recommended teaching tools for business teachers who wish to pick over the bones of contemporary corporate capitalism. Nicholas Jarecki's recent release Arbitrage pits Susan Sarandon and Richard Gere in conflicting roles as a couple dealing with the implications of financial fraud, deception, marital infidelity and corporate philanthropy in a business needing one last deal to survive bankruptcy. We learn that just one speculative investment - a copper mine in Russia - was enough to bring Robert Miller's trading empire and his family fortunes to the brink of destruction.
As the police close in on Mr Miller for walking away from the scene of a car accident that killed his French lover, the tycoon fights against time to sell his company to the somewhat gullible CEO of an investment bank. He in turn needs to keep his shareholders at bay and is just as desperate to close the deal.
Happily for Miller, the police fabricate evidence to help place him at the scene of the crime which allows him some breathing space. Less happily for him, his wife Ellen finally tires of the duplicity and holds him to ransom for bursting the career bubble of their daughter Brooke. Brooke Miller (Brit Marling) is Chief Investment Officer of his company but not privy to the accounting frauds being perpetrated. At one point mother exhorts daughter "you have to do what's right for you". And she does.
No one comes out of this tale especially well, and the final scene leaves room for conjecture (or perhaps a sequel) to explore what Robert Miller and his family will do to redeem or condemn themselves morally and financially. Everyone at that point has been compromised by the need to protect his or her interests - even the young, the naïve and the innocent. The auditors cut corners and the charities accept tainted money.
But is business really like this? Very occasionally, for sure it is. Venal and predatory behaviour in trading relationships has been practiced since the invention of money, and is unlikely ever to disappear, certainly while human behaviour remains flawed and speculative greed is rewarded. As many have observed, at one time Enron was a much-lauded exemplar of corporate social responsibility and philanthropy in the US.
However, it is also true that the overwhelming majority of businesses, and the vast majority of entrepreneurs do not behave in this way; nor do they take advantage of vulnerable stakeholders, even when that is possible or tacitly encouraged by the culture of certain companies and industry sectors.
In a recent conversation with Ed Mayo of Cooperatives UK and Rebecca Harding of Delta Economics, we toyed with the challenge of how to make more explicit in the public discourse the notion that entrepreneurs are not all predators like Robert Miller or Gordon Gecko in Wall Street. Popular TV programmes like 'The Apprentice' and 'Dragon's Den' certainly do not help - they further reinforce the notion that the behaviours needed to win in business are aggressive or even cut-throat. But there must be a better way, and it is especially important for future generations of entrepreneurs that they are taught about the alternatives.
We discussed evidence from Rebecca's research that shows a high proportion of owners of fast growing firms in the UK having a social consciousness, even if they would never dream of describing themselves as social entrepreneurs or aspire to the concept of corporate social responsibility. We also noted the clear evidence of how cooperative enterprises are proving far more resilient than conventional businesses during the multiple-dip global recession that we are now living through.
And yet these observations and case studies, involving hundreds of millions of small and medium sized enterprises around the world, and more employees than work in all the world's major corporations put together, hardly feature at all in business school curricula or management research. Perhaps it is time to recapture the meaning of entrepreneurship and more explicitly distinguish 'normal' entrepreneurship from 'predatory' entrepreneurship.
In my current University, the Plymouth Business School is trying to do just that, embedding principles of normal entrepreneurship into the business curriculum and even participating in related projects in West and East Africa funded by the UK Department for International Development.
In my future role as President and Vice Chancellor of Cape Breton University in Nova Scotia, I hope to support my new colleagues in further developing their work in this space. Cape Breton has real momentum in the area of aboriginal and indigenous peoples' entrepreneurship based on humanistic and environmentally sensitive business principles that serve commercial and community economic development goals in the broadest sense. Almost uniquely, the University also has an MBA in Community Economic Development.
If we may learn anything from the history of the social and cooperative enterprise models, it is that they work at scale (1 billion people in the world are members of coops) and they create social, environmental and financial value - largely without predation. Socially conscious business models may not be discussed much in elite business schools, but the evidence suggests they are certainly more normal than their predatory alternatives and they employ a lot more people.
Perhaps in the sequel to Arbitrage, Brooke Miller could end up leading a fair trade cooperative or a social investment fund in Africa. If only Hollywood worked like that....
David Wheeler is Pro Vice-Chancellor and Dean of Business at Plymouth University, UK. He is President Designate of Cape Breton University, Nova Scotia.
The Plymouth Business School 'Beyond Capitalism' series addresses many of the issues in this article.
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