Film Case Assignment “The Wolf of Wall Street” by GROUP 9
Section (02) HROB 2100
Andrew Eberhard 0784720
Robert Morris 0847114
Tristan Mckone 0835227
Jitin Luke 0759425
Muhammad Ali Ajmal 0778977
Ashley Royale 0750587
Executive Summary:
The purpose of this report is to explore the organization of Stratton Oakmont. This report
scrutinizes the organizational culture, the unethical business practices, and extrinsic motivation
for wealth at Stratton Oakmont.
After reviewing all the problems within the firm, two alternative solutions are given: to change
the leadership of the company, introduce a new recruitment and training process to create a more
professional workplace.
We came to these solutions because the unethical business practices at Stratton Oakmont are not
sustainable. We need to create long term business solutions in order to preserve and continue
growth at Stratton Oakmont. Our recommendations are: changing the dominant organizational
culture and promoting ethical business practices. Also, purchasing new technology to create high
job satisfaction for employees. Recreating the hierarchy within the company and introducing
new training programs to create productive and qualified employees. This new plan will steer
Stratton Oakmont toward sustainability, high productivity and profitability.
1 Introduction of Stratton Oakmont:
It is a brokerage company which deals with stocks as well as penny stocks. Multiple times
referred in the movie as "pink sheets", which have a commission of fifty percent as compared to
common stocks which only have one percent of commission.
Business model of Stratton Oakmont is based on trading of penny stocks. Initially they sold
penny stocks to poor people. Later they targeted people of affluence of the and made 28.7
million in commissions during one accounting cycle of the organization.
Problem Statement:
"Stratton Oakmont Inc. is struggling with absence of organizational culture which has led to
unethical operations and methodology to conduct business. Employees are motivated by
monetary benefit. There is low job satisfaction, lack of training and Human Resource policies."
1. Organization Culture
Although it may seem like a strong ethical brokerage, giving investor’s great returns on their
investments, it really is just a big scam. A firm that is loud and corrupt. The organization culture
is not the normal business culture. Lavish office parties, drug abuse, use of prostitutes are
common. Stemming from the organizational culture on Wall Street, Stratton Oakmont builds a
similar culture, but yet more unprofessional and improper. This stems from what management
deems as “normal.”
Also, included in this culture is the need to continuously grow and attain more wealth, not for
Stratton Oakmont’s investors, but for the brokers and management. This stems from
management's views on customers. This creates set of values that are toxic, with employees who
2 are encouraged to engage in illegal activities from drug use to insider trading. Creating brokers
who disregard the law and just concern themselves with creating personal wealth. This unethical
scheme can’t be kept up. Such unethical practices ultimately lead to the downfall of the
company.
2. Unethical Business Operations
Customers are not valued; they are just a vehicle for brokers to obtain personal wealth.
Everyone one of Oakmont's brokers is told to only care about themselves. They use investors’
money to make money for themselves which comes from their massive extrinsic motivation to
create their own wealth. Wealth was never created for investors, nor was it ever a goal.
In order to create large amounts of personal wealth, the brokers and management use unethical
and corrupt strategies for personal gain. Deception, lying, pumping and dumping, money
laundering are all practices used by employees and management to create personal wealth. This
unprofessional culture and management and employees view on customers, create a toxic
brokerage. These practices bring unwanted attention from authorities who start looking into the
practices of the company.
3. Need for Sustainability
For every organization there is a need to be sustainable. Organizations make profit by doing
business and making use of the resources. These resources are environmental, social and
economical. It is responsibility of the organization to avoid doing damage to these resources.
Stratton Oakmont's unethical business practices are doing harm to the society. Their business
model of pumping and dumping can cause economic instability.
3 4. Lack of Job Satisfaction
Employees at Stratton Oakmont are not satisfied with their job environment. It is a very stressful
job. It is observed that employees yell over each other and hundreds of telephones are ringing
every minute. This job also requires lot of concentration as stock prices constantly rise and fall
due to continuously changing demand and supply. There is always a pressure to sell in order to
earn greater commission. People get fired over little mistakes, so there is always fear to lose job.
5. Training and Development
Employees at Stratton Oakmont lack training. They were given a scripts about how to talk to
customers. All the brokers followed the same script and were trained to use deception, and lying
in order to sell junk securities to gullible investors. The lack of training was evident as
employees were never actually trained other than a script and the motto to sell.
This created brokers who were never actually doing what they were intended to do; analyze
companies and find a good investment for customers. Instead they were just given instructional
training, when the job of a stock broker requires a lot more than just being instructed and
restating what you were told.
6. Employee Rights and HR policies
Policies within the office are almost non-existent. When it comes to firing employees, no such
procedures even exist, employees rights are not being taken into account. Instead employees are
forced to swallow a goldfish then told that they’re fired and have to get out of the office. It is an
office of free rein, where managers can do whatever they want whenever they want because no
procedures or policies even exist. Basic structural framework of an organization is non-existent,
4 this creates a stressful environment for employees. They don’t know of any corporate procedures
and have no rights to protect themselves from managers. Not only does this create a stressful
environment, it also causes mental and physical stress on employees.
Causes of the Problems:
Many of these problems stem from the unethical framework or structure that Stratton
Oakmont is built on. The countless number of unethical business policies, and practice occur at
the brokerage happen because they are built on corrupt values. All of these practices are deemed
“normal” at Oakmont because it is the structure of the firm, since everyone supports and
practices these methods it must be deemed ethical. Even though it is completely corrupt and
wrong it is so deeply embedded in the values of the company that everyone thinks it is correct.
A majority of these problems stem from management's view on employees and customers.
Management preaches their views to all the employees, they are seen as leaders, people to inspire
to, employees follow their views. The board creates the culture of the firm, they want to be seen
as a “loud” company so they go and construct a culture that just does that. Management
implement and establish the culture that all employees adhere too.
Not only do they create a dominant culture within the firm, the executives also shape all the
business practices within the company. Senior managers are seen as the voice of the company,
the tone and path is set by them. At Stratton Oakmont all the managers follow and push unethical
business practices on all their brokers. They don’t care that the practices are illegal, as long as
commissions are being made and there take home pay is increasing. With Stratton Oakmont
being a huge brokerage that it is these unethical policies to drive up stock prices and sell
5 investors junk has a large effect on the economy, created stock bubbles and loss of wealth for
investors.
Management forms the office environment which all employees are exposed too, they form not
only the culture, but the environment as well. Executives company are suppose to adhere and
create employee policies, at Stratton Oakmont these are non-existent and this is because
management created it to be like this. They don’t want policies about hiring and firing
employees. None of them want policies to follow, they much rather just do what they want to do.
They don’t want to train employees and set up programs for their brokers. This creates the
stressful environment which all the employees have to be exposed too. Management isn’t
concerned for these things, but are more concerned with creating personal wealth as this is their
only motivation to be a part of the firm
Decision Criteria:
We have identified five important criteria to evaluate before making a business decision:
Cost: How much will undertaking the alternative affect the company in dollar values?
Time of Implementation: How long will it take to carry out the alternative?
Acceptability: Will current employees agree and follow the new alternative purposed?
Does it benefit customers: Will investors and customers have a higher satisfaction with new
policies?
Does it promote positive behaviour: Will the new alternative promote new and positive
behavior from employees?
6 An equation has been created based on weighting the criteria to rank alternatives:
= (-1)(Cost) + 1 (Benefit to customers) + 0.75(Time for Implementation) + .6(Accept
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