The Ethical Economics
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Executive Suite (1954)

This is a classic movie with an all-star cast from the early years of motion pictures. It was nominated for 4 Academy awards. This film offers one of the most effective arguments for ethical behavior in business. It accomplishes that with a plot involving the sudden death of the CEO of a large furniture maunfacturing firm and an ensuing battle to decide upon a successor from among a group of executives with a wide range of abilities and characteristics.

There are two key contenders for the job. Loren Shaw (Frederic March), the company CFO, and Don Walling (William Holden) a younger vice president for design and development.

Shaw is cold, careful, and calculating. He believes that the primary goal of the corporation is to maximize shareholder returns and that production and sales are simply the means to that end. He brags that he was able to substantially reduce the company's tax liabilities by negotiating with the government for a change in the tax accounting rules. He epitomizes the modern technocrat who believes that financial innovations are the key to business success. He is also highly ambitious and intent on using any means possible, including blackmail and a little accounting fraud, to secure the CEO position.

His key opponent, Don Walling, also aspires to greatness but wants to achieve it through creativity and innovation. He believes that the strength of the company comes first and foremost from the quality of its products and the satisfaction it provides to its customers. He also believes that the assembly line workers will be more highly motivated if they know they are producing a great product at a fair price. Walling has a broader "stakeholder" perspective on company success that extends beyond the next earnings report to the long term health and vitality of the company and to maintaining a strong reputation.

Walling's impassioned speech at the end secures the CEO position for him. Ethical capitalism wins the day. The furniture company will have a chance to return to its former glory under the stewardship of a young, dynamic and visionary leader.

But keep in mind, Walling's larger stakeholder view of the company does not mean that he doesn't care about making a profit and securing a good return for the shareholders. Rather, he is willing to sacrifice some profit and investment return in exchange for something else ... Pride! Walling wants his customers to be satisfied and he wants the workers to feel proud of the products they are making. To do that means the company shouldn't try to use tricks, either accounting or physical, that undermines the integrity of their products and processes. Pride comes from operating in a fair and just manner, not from the application of fraudulent and deceptive practices.

Simply contrast the sentiments of the workers under Walling's vision, with the workers in the film Glengarry Glen Ross, which may well be the end point if Shaw's vision for a company were to win out.

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RELATED VIDEOS

Executive Suite - Trailer

 

Executive Suite - Climactic Scene

 

Reflection Questions

  1. What do the different characters, especially George Caswell, Loren Shaw and Don Walling, believe are appropriate ways to make money?
  2. What methods does Loren Shaw use to help secure his nomination for CEO? Are these acceptable practices?
  3. What methods does Don Walling use to help secure his nomination for CEO? Are these acceptable practices?
  4. How does the film use personal family relationships to convey moral character?
  5. In a heirachical business organization, seniority is often used as a way to determine a successor. What does the movie suggest about the appropriateness of seniority in leadership decisions?
  6. Loren Shaw's negotiation with the government for a tax advantage is presumably legal. Is it an ethical practice as well?
  7. What are some ethical actions that Shaw undertakes that show strong potential stewardship for the company?