Discuss the Relevance of the Movie 33 years on from an Ethical Perspective: Business Ethics And Corporate Governance Essay, NCI

An essay is written on the movie, Wall Street” (released in 1987)

Questions and word counting instructions:

Q.1. Discuss the relevance of the movie 33 years on from an ethical perspective (700 words – guide)

Q.2. Discuss the interrelationship between the two main characters –particularly in terms of abuse of firm-employee relationships (500 words – guide)

Q.3. What valid issues are Gekko raising in his “Greed is Good Speech” (300 words – guide)

Q.4. Give an account of how this movie acts as a perfect example of the Agency Theory of Ethics in action (500 words – guide)

Agency Theory

Agency theory explains the relationship between principals (such as shareholders) and agents (such as company executives). In this relationship, the principals hire an agent to perform work (can be things such as investing money and buying stocks and shares on behalf of the shareholders/owners.

However, there are 2 specific problems with this relationship:

1. The goals of the principal and agent are in conflict – the principal may have long-term views on building the company or in buying shares, but the agent wants to focus on short term plans (often in matters of self-interest).

2. The principal and the agent have very different views on taking risks (e.g. the organization wants to avoid risky dealings but the agent wants to speculate and invest money on behalf of the shareholders – possibly, in self-interest as they can make money for themselves)

Remember:

If you are an agent, then you are supposed to be working on behalf of the shareholders (or principals) who hire you to do a job for them – usually to make money for them. You are not supposed to be autonomous (i.e. working for yourself); after all, you are using someone else’s money.