Inside Job: documentary analysis and financial crisis examination

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An Assessment of Inside Job

The many excellent insights provided in the film Inside Job illustrate how tightly integrated the global financial systems are, and how the deliberate packaging of low-quality debt and securities led to the financial crisis of 2009. The most powerful moments of the firm are when it becomes clear that only two or three banks' stability stand between the solvency of the Untied States itself. If a few more banks would have failed, the country would have been plunged into financial chaos. These powerful points made are carefully constructed by showing how a lack of leadership and accountability led to the financial institutions believing they were entitled to continually higher profits and personal wealth at the expense of the individual investor. Further, there was no forethought of how these deliberately fraudulent transactions could be restructured to stabilize the economy. While watching the documentary it is clear the most powerful financial leaders of these companies abdicated responsibility for the outcomes of their decisions, clearly not even considering restructuring as a required outcome of their decisions.

Analysis of Inside Job

The paradox of leadership is very evident in the film, with the CEOs of the country's largest financial firms leading by example that greed isn't just condoned, it's encouraged by the excessive salaries, lifestyles and personal fortunate they accumulate. The leaders are summoned before the U.S. Congress and explain that they are remorseful for their acts and at one point make empty promises that it would not happen again, yet there is no contrition or even a willingness to pay back the smaller investors they intentionally defrauded with billions of dollars in worthless securities. The paradox of their leadership style is made complete when they offer up only verbal contrition, nothing material, to the U.S. Congressional Committees, then continually reward themselves and their top performers with massive financial windfalls. This paradox of greed causes the U.S. public to drive the financial industry to the lowest levels of trust of any industry included in polls measuring transparency, trust and authenticity (Marsh, 2013). The paradox of this leadership continues with the double-standard of portraying one type of leadership to the U.S. Congress and American people, and quite a different one within their own ranks and with their top financial services performers. This duplicity of leadership styles also violates many of the foundational aspects of ethical leadership as well

(Marsh, 2013).

Of the many aspects of the film that are directly related to management and leadership, the most glaring is the lack of transformational leadership evident in the leaders of these foundational firms. They seem so coin-operated and myopic, it is easy to imagine them as small retailers haggling over a discount with a supplier of just a few dollars. Instead, they are haggling over millions, and yet they lack even the self-awareness of their myopic, very short-term and transitionally-based mindset. Lacking in many of them is evidence of the ability to provide individualized consideration to their staffs who are clearly struggling with ethical decision-making, and there are also examples of many of the leaders lacking idealized influence from an ethical standpoint as well, two of the critical building blocks of transformational leadership (Marsh, 2013). The paradox of these leaders from an ethical standpoint can also be seen in how intellectual stimulation and inspirational motivation are guided by greed instead of the ethical growth of their businesses (Marsh, 2013).

Accountability is also lacking throughout the entire mindset and perspective of these leaders as well. A core aspect of ethical leadership is the ability to infuse a high level of accountability and ethical performance into any organizational culture (Bauman, 2013). One of the driving forces of the major paradox the firm presents in the lack of ethical accountability over defrauding smaller investors and knowingly driving large transactions that would lead to foreclosures. With a lack of accountability the duplicity of leaders to do what their own interests dictate overtake the ethical common good which is the very foundation of utilitarian ethics (Marsh, 2013). Without that foundation, the decisions of these financial leaders nearly crushed the economic system of a nation.