The current economical situation in the world experiences sharp financial recession caused by the rapid economic downturn. Numerous countries all over the world suffer inner instability; such a situation resulted in global inflation, high oil and food prices, a credit crisis, and high costs for energy. The consequences caused by the economic crisis and financial instability cover all spheres of human activities. The events of the current world economic situation can be perceived through the Enron debacle described in the movie “The Smartest Guys in the Room”.
“The Smartest Guys in the Room” is considered to be a documentary film based on the criminal business scandal widely known in American history. The movie is merely concentrated on the Enron Corporation collapse which led to criminal trials of top company’s executives. The film disclosed the Enron traders’ involvement in the electricity crisis of California. The analysis of the documentary film allows evaluating the business problems culminating in corporation bankruptcy. The main issues of the movie are the disclosure of major motivating mechanisms of corporate culture:
- Milgram Experiment;
- Vitality curve;
Speaking about the vitality curve it should be noted that the introduction of this business idea is aimed at constant competition between the company employees. The example of this method was demonstrated at the Enron Corporation. The company had to hire new and new staff for a long period; it was connected with the fact that employees were constantly fired for no making 1000 times more of their work volume. The atmosphere of constant competition disregarded the law causing people to even break the law (Enron: “The Smartest Guys in the Room”, 2008).
The introduction of the Milgram experiment meant the usage of social psychological factors in the working process. This meant that employees had strictly obeyed the top executors and managers instructing people to perform the work which contradicted their personal conscience and conflicted with their individual understanding of the principles of work. Complete obedience to the authority of the company was fulfilled through the destruction of one’s own principles. Enron Corporation used this methodic in order to get perfect business results and profound subordination. People of the company were completely aware of their lies and criminal actions; nevertheless, they obeyed as it was the requirement of authorities. Both methods were used to maximize corporate profits whatever the cost. The movie focused on the well-known Milgram experiment of 1963 in order to show how the psyche state of people influences the quality of work and what grade of obedience the authority could reach through such aspect (Ebert, 2005).
Besides “The Smartest Guys in the Room” discloses the process of electricity transference from California in order to supply it to numerous states with a surplus. After the adoption of California legislation, Enron managed to cause blackouts throughout the whole state. As a result, the electricity price was rapidly increased and Enron happened to earn billions of dollars for shipping the energy back to California. The company profit raised and even sky-rocketed immediately. Constant blackouts allowed Enron to reach enormous financial stability inside the company.
The analysis of the movie “The Smartest Guys in the Room” gives an opportunity to be involved in numerous congressional hearings, interviews of Enron former employees, and various testimonies of top company executors. It is possible to evaluate the grave business mistakes of Enron’s running. The methods used by the company authority appeared to be destructive though they brought high profits. The current economical crisis can be perceived through Enron’s financial instabilities and its causes. The world financial system of the present day suffers a similar economic situation as it was shown in the movie. Nowadays profound analysis of financial markets makes to look at the system of Enron Corporation. The collapse of Enron Corporation discloses the extreme need for financial system reform. It should be stressed that during the period of Enron’s activities thousands of innocent people suffered major financial losses. The functioning of the current banking system undergoes a similar position (McKay, 2006).
Thus, the documentary film “The Smartest Guys in the Room” highlights the collapse of the rising star. The movie underlines the methodic and failures experienced by one of the powerful American Corporations, Enron. The movie closely interacts with political and economical issues, financial system manipulation, and methods of running the staff. The effectiveness of business running appeared to be one of the greatest failures in American history. Nowadays big and small companies are completely aware of Enron manipulations in order to avoid major business mistakes. The current economical crisis at the international level is based on similar mistakes of Enron Corporation. This documentary movie can allow evaluating the financial situation in the world and finding necessary ways out of it.
References
- Enron: “The Smartest Guys in the Room”. New York Times. 2008.
- Ebert, Roger. “The Smartest Guys in the Room”. Chicago-Sun Times. 2005.
- McKay, Peter. The Enron Debacle. Business Library. 2006.