Leadership Movement/Issues Leadership Moment Summary Research Paper

Download this Research Paper in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Research Paper:


G. Lack of Strategic Vision

A strategic vision defines the desired or intended future state of an organization or enterprise in terms of its fundamental objective and/or strategic direction. It represents a long-term view of how things should be. Without a strategic vision, a company may achieve short-term tactical success, but is likely to struggle in the long-term (Greenfield, 2000).

Indeed, Salomon had been successful for many years as Gutfreund assumed the role of "senior statesman and public spokesman" for the bank. As such, his focus was constantly changing. He was rarely at headquarters due to his frequent international travel to support the company's growing investment banking business. A more strategic focus would have realized the importance of compliance in the financial services industry that demands strict adherence to the letter of the law and the company would have responded through the creation of a vision that embraced corporate ethics. This vision would have then been reinforced with appropriate policies and organizational structure.

III. Leadership Strengths and Weaknesses

Although Gutfreund had his strengths, weaknesses were plentiful. He had been with the company for many years and surrounded himself with a competent management team. In fact, it was Gutfreund who has sought out the leadership skills of Warren Buffett to get Salomon out of the mess Gutfreund had helped create. He was aggressive and no doubt doing what he thought was in the best interest of his company. He appears to have personal integrity, but he fail short because he did not require the same of his employees. His leadership style created a culture that was too short-term profit oriented and that took on too much risk. He was also indecisive, too secretive and irresponsible.

Eventually, Gutfreund's weaknesses outshined his strengths, causing him to do the wrong thing which had serious implications for the company's executives as well as Salomon. The following sanctions were imposed on the executives:

Gutfreuned was banned for life from serving as a chairman or CEO of a securities firm and fined $100,000.

Strauss was suspended from the securities business and fined $75,000.

Meriwether was suspended from trading for three months and fined $50,000.

Mozer received a four-month prison sentence and a $1.1 million fine. He was barred from the securities business for life.

For Salomon, Gutfreund's decision to do nothing resulted in an expensive $290 million settlement, an estimated $4 billion in lost trades from being barred from bidding, a plummet in shareholder equity of $1.65 billion in thirty trading days, and $400 million in lost business because potential customers driven away by Salomon's poor public image following the scandal.

In hindsight, Gutfreund could have made different choices that would have enhanced his position of leadership. He could have implemented many of the procedures Buffet did to prevent noncompliance such as forming a board compliance committee among Salomon directors, appointing a chief compliance office, moving compliance officers out of their offices onto trading floors, building compliance into the corporate culture, extending risk analysis to regulatory, credit, operational and environmental hazards, segregating trading functions to perpetration and concealment of improper acts and requiring legal staff to review all correspondence with the Treasury and Federal Reserve.

If the above measures had been implemented and still had not been successful, Gutfreund should have pursued a zero tolerance policy for employees who did not abide by Salomon's policies and the law. Mozer should have been immediately terminated Mozer. Gutfreund's next steps would have been to launch an internal investigation to understand any other issues with Mozer's conduct and to pursue full disclosure to Salomon's board and legal staff as well as the Federal Reserve Bank. Gutfreund would also need to promise full cooperation with any Federal investigation, acknowledge responsibility and issue an apology.

IV. Personal Statement

From reading the Leadership Moment, I've learned a lot about my own leadership traits. I believe the area where I would struggle with the most is creating a culture other than one of short-term profits and unacceptable risk taking, especially in the investment banking industry which seems to thrive on these very attributes. I also do not fully understand how to create an appropriate reward system for traders that would not encourage undesirable behavior. This appears to be standard practice and I am not aware of alternatives. However, unlike Gutfreund, I believe that I would have realized that decisiveness, transparency and responsibility are part of the leader's job description. Therefore, with my lack of knowledge of culture and reward systems, I believe it's entirely possible that I would have had to deal with a similar situation as the one Gutfreund had to confront. but, I believe I would have had a far more favorable outcome because I would have taken immediate action to do the right things such as terminating Mozer, reporting the incident to internal and external stakeholders, and holding myself accountable. Now, after reading the paper, I know that I need to learn the leadership skills that will instill a corporate culture that has a strong value system and a reward system that promotes compliance with desired actions.

In conclusion, these are five questions regarding leadership that I had before reading the Leadership Movement paper and the answers I've gleaned after reading the material:

Question: Who is responsible for corporate malfeasance?

Answer: Certainly, the person who has violated the law will be held accountable for his or her actions. In addition, it appears that any employee in an organization has the responsibility to disclose noncompliance and will be held just as accountable as the person who has violated policies and laws, particularly if that person is an executive who is expected to do something about the situation.

Question: Why does noncompliance occur?

Answer: Cultures that tolerate small excesses, cut corners and sanction gray areas lay the foundation for increasing abuse. Inaction is a breeding ground that fosters undesirable values that will inevitably cross the line of corporate norms. This is why companies need to have a zero tolerance policy for conduct that is not in compliance with company policies and/or legal regulations.

Question: What should an executive do upon discovering compliance issues?

Answer: An executive needs to dismiss the offending employee, conduct a full internal investigation, and engage in full disclosure with relevant company executives, legal staff and board members. The executive will also need to notify relevant external parties and promise full cooperation. The leader must acknowledge responsibility, express remorse and take corrective actions to make sure the situation does not happen again.

Question: Why is immediate action so important in issues involving noncompliance?

Answer: The executive needs to take immediate action so that additional damage does not occur and so that the executive and his team are not perceived as participants in a cover up. The faster the company acts, the better it can protect its image which could result in a loss of shareholder value and the loss of customer trust.

Question: Do companies really profit from questionable ethics and breaking the law?

Answer: Evidence in the case suggests that the gains are few and the costs will quickly dwarf any profit. In Salomon's instance, it received only a three percent gain from its improper Warburg bid. but, the costs were extraordinary in terms of settlement fines, lost trades, loss in market capitalization, and lost customers. If it wasn't for Buffet's quick turnaround strategy with the Federal Reserve, the company could have been forced out of business.


Cunningham, T.M. (2002, August 27). Leadership 101: Integrity. http://www.withthecommand.com/2002-Aug/MD-TMC-leader-integ101.html

Greenfield, G. (2000, December). Achieving tactical success without a strategic vision. http://www.internationalviewpoint.org/article.php3?id_article=727

Leadership styles and bases of power. http://www.enotes.com/management-encyclopedia/leadership-styles-bases-power

Montana, P., and Charnov, B. (2008). Management (4th ed.), Barrons Educational Series, Hauppauge: New York.

Prosch, G. Transparent leadership. http://excelsior-greg-prosch.blogspot.com/2007/02/transparent-leadership.html

Subramanian, R. (2009, March 9). The mark of a decisvie leader. http://www.mydigitalfc.com/opinion/the-mark-a-decisive-leader-003

Winston, B.E. (2006, March 22. Toward a new understanding of leader accountability: Defining a critical construct. Journal of Leadership & Organizational Studies. http://www.allbusiness.com/human-resources/employee-development-leadership/417985-1.html[continue]

Cite This Research Paper:

"Leadership Movement Issues Leadership Moment Summary" (2009, October 23) Retrieved October 23, 2016, from http://www.paperdue.com/essay/leadership-movement-issues-moment-18349

"Leadership Movement Issues Leadership Moment Summary" 23 October 2009. Web.23 October. 2016. <http://www.paperdue.com/essay/leadership-movement-issues-moment-18349>

"Leadership Movement Issues Leadership Moment Summary", 23 October 2009, Accessed.23 October. 2016, http://www.paperdue.com/essay/leadership-movement-issues-moment-18349

Other Documents Pertaining To This Topic

  • Leadership in International Schools

    Leadership Skills Impact International Education CHALLENGES OF INTERNATIONAL EDUCATION Practical Circumstances of International schools THE IMPORTANCE OF LEADERSHIP IN EDUCATION What is Effective Leadership for Today's Schools? Challenges of Intercultural Communication Challenges of Differing Cultural Values Importance of the Team Leadership Style LEADERSHIP THEORIES Current Leadership Research Transformational Leadership Skills-Authority Contingency Theories APPLYING LEADERSHIP IN AN INTERNATIONAL SETTING Wagner's "Buy-in" vs. Ownership Understanding the Urgent Need for Change Research confirms what teachers, students, parents and superintendents have long known: the individual school is the key unit

  • Leadership Nursing Question 2 Response

    This really helped me to remember why it was I became a nurse, and demonstrates the true needs of patients that I was helping to care for and not simply trying to cure. These moments also made the more mundane and laborious elements of the job seem more worthwhile, and I was definitely feeling less stress and more satisfaction upon the completion of my shift than I had the

  • Applying Servant Leadership Within a

    Initially, I had to point out when people were saying things that would indicate a connection between group members. However, once those connections were established, the group members moved rather rapidly towards directly relating with one another. Another result of the group meetings is that the group members initially appeared very focused on the past. Small groups tend to do postmortems of old failures, archaeologizing (digging in the past for

  • Contemporary Issues in Education the Ways Education Is Constructed...

    Education -- the ways education is constructed and presented Contemporary Issues in Education Afghan Girls, Back in the Shadows The article presents a situational description of the dangers facing schools, its teacher and students in Afghanistan. The article describes how learning in Afghanistan has been hampered by an up rise in insurgents. The remedial measures by government and non-governmental organizations encouraging education in the region are also highlighted. It is observed that

  • Organizational Design Management Issues Communication

    The relatively small degree of economic displacement during this recession has prompted the rise of the Tea Party and (to those who are not a member of this movement) incomprehensible fury against the federal government. (By noting that the economic pain now is "relatively small" I do not in any way to mean to suggest that many people have been not been devastated by the recession, merely to make

  • Disability Politics and the Disability Movement in Britain

    Census Bureau in the United States, there are about 54 million Americans that have some sort of disability. Out of these persons, 26 million persons have a severe disability. While employment rates are concerned, it should be seen that 82% of the people in America without a disability have a job or some sort of business. Keeping this in mind, it should be seen that the employment rate of

  • Classroom Behavior Management Policies Title

    According to Bales, 1999, the concept behind SYMLOG is that "every act of behavior takes place in a larger context, that it is a part of an interactive field of influences." Further, "the approach assumes that one needs to understand the larger context -- person, interpersonal, group, and external situation -- in order to understand the patterns of behavior and to influence them successfully." With SYMLOG, measurement procedures are

Read Full Research Paper
Copyright 2016 . All Rights Reserved