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 and Matt Damon in Promised Land, award-winning Hollywood actors have portrayed the struggles of lonely idealists fighting corporate predators in industries from energy to tobacco.
But even more than exploring the angst and (frequently) the downfall of solitary whistle blowers, the movie industry delights in vilifying the worst elements of predatory entrepreneurial behaviour. Hollywood is simply in love with the notion of nasty entrepreneurs. Michael Douglas’s portrayal of the wholly amoral Gordon Gecko in Wall Street provided one of the most memorable examples. 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 potential 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 and its individual exponents. Although it did not receive any Oscar nominations this year, Nicholas Jarecki’s 2012 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 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 a Wall Street 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 (Sarandon) finally tires of the duplicity and holds him to ransom for bursting the career bubble of their daughter Brooke. Brooke (Brit Marling) is Chief Investment Officer of daddy’s 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 both 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 practised 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 discussed 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. There must be a better way, and it is especially important for future generations of entrepreneurs that they are taught about the alternatives.
We considered 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 lofty 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 much of the world now enjoys.
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’ or ‘true’ entrepreneurship from ‘predatory’ entrepreneurship.
In recent years I have been exploring what normal entrepreneurship looks like when it is embedded in the business curriculum, both in the UK and in related projects in West and East Africa funded by the UK Department for International Development.
In my role as President and Vice Chancellor of Cape Breton University in Nova Scotia, I hope to support my 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 has a highly successful MBA in Community Economic Development which is delivered across Canada.
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….