Organizational Behavior
Movie Analysis
The Wolf Of Wall Street
Jessica Young, Michael Counihan,
Ana Tineo, Nancy Chang, Aziz Alsuhaim
The Wolf of Wall Street, directed by Martin Scorsese, is a 180-minute thrill ride
through the life of infamous stockbroker Jordan Belfort. During his tenure on Wall St,
Jordan Belfort was known for his antics and for the unconventional way he conducted
business. His brokerage firm, Stratton Oakmont, was home to the most abrasive and
uncouth employees ever to work on Wall Street. The “Strattonites”, as Jordan had so
appropriately titled them, were the pawns in his great money-making machine. These
individuals were often High School or College dropouts with a thirst for the big bucks
and would stop at nothing to fulfill their lust for power and money. They pledged their
undying allegiance to Jordan and Stratton in return for a shot at material success. With an
army at his disposal, Jordan Belfort took Wall Street and the American Financial System
by storm, making such enormous profits that it turned the heads of many larger financial
institutions and regulatory boards. After years under the spotlight, Jordan Belfort was
indicted and found guilty of Stock manipulation and money laundering, ultimately
causing the downfall and eventual closing of his brainchild, Stratton Oakmont.
As budding Organizational Behavior theorists, we were asked to apply OB
principles to our examination of the rise and fall of Stratton Oakmont. Based on our
observational findings of this company, we have come to the conclusion that
irresponsible management was the root cause of the firm’s ruination. Had we had the
opportunity to evaluate this company prior to its implosion, we would have made several
recommendations regarding structural, organizational, and cultural changes. Since the
company is no longer in existence, we will examine the role of management at Stratton
Oakmont, their code of conduct and the overbearing influence they had on their
employees and how this shaped the ethos of the corporation; the reasons how and why
the employees bought into the management’s philosophy; and lastly the resulting effects
of subscribing to the inherently flawed company. Following our assessments we will
provide a brief recommendation as to how these problems might have been avoided or
corrected in a timely fashion.
Management plays a vital role in the workforce largely in part because they set
the direction in which their employees move. Journal of Experimental Psychology says
that, “Leaders in organizations often use visions- aspiring articulations of an
organization's purpose and direction- to motivate employees. Scholarly work on vision
has associated it with followers’ sense of collective identity, enthusiasm, and
commitment to their group or organization.”
In the case of The Wolf of Wall Street this statement holds true. Stratton Oakmont’s
management team consisted of Jordan Belfort and his accomplice Donnie Azoff, who
was Jordan’s closest friend and most loyal companion. Before touching upon how Jordan
chose to lead his band of misfits, it is important for us to highlight where his respective
management philosophies were developed.
Early into the film, the audience is introduced to a variety of Jordan’s addictions:
drugs, sex, and, most importantly, money. Categorizing Jordan’s motivation proved to be
a simple task, as McClelland’s Theory of Needs, particularly the need for power and
achievement, defined Jordan’s ambitions. One could argue that his need for achievement
subsequently developed his need for power. As he rose through the ranks of stockbrokers
on Wall St, his motivation shifted from becoming a successful securities broker to
becoming THE one and only most successful securities broker. This motivation
ultimately led him to develop a Machiavellian-esque personality, where he saw
employees and customers as cogs in his ponzi-scheme.
An example of this can be seen in two instances, the first is with the customers he
chooses to focus on. When the brokerage first opened, Jordan provided an exact script for
his employees to use when on the phone with potential customers, but not without first
proving its effectiveness. In this particular scene Jordan cold called an individual, who
Jordan deemed as wealthy, and proceeded to recite the deceitful script, manipulating the
customer into purchasing stock about which he knew nothing about. This act of
persuasion truly highlights the manipulative nature of Jordan Belfort and is further
highlighted in the next example.
One can see how Jordan manipulated his employees by his management style. He
chose to lead through example. How does one lead through example? In the case of
Jordan he simply insisted that their employees live outside their means and do whatever it
takes to solely focus on shallow and materialistic possessions. This is evident in the IPO
monologue delivered by Jordan prior to the release of Steve Madden. He urged his
employees to focus on “big tits”, and “$10,000 suits and gold watches”. At this point,
employees were not interested in whether the means to an end were ethical; but rather
how they could live up to Jordan’s expectations. Why this is so detrimental to an
organization is because:
“Ethical behavior is needed in an organization because employees are likely to
regard their employing organizations as the legitimate source of right and wrong
within the business environment. As a consequence, ethical behavior will be
defined using the organization as the arbiter of what is morally correct.”
An organization, such as Stratton, who blatantly disregards ethical behavior often run the
risk of destroying their business. Examples of this can be seen with Enron in 2001 and
the Lehman Brothers scandal in 2008.
Employees were ambitiously engaged in such extent that did not realized the way
they were associated in morally wrong actions. They would follow every step Jordan and
the other leaders would take. Jordan hammered home his point by stating “If you say that
I’m materialistic go work for McDonalds, you worthless (expletive).” By having his
employees live outside their means it enabled him to motivate them to work harder and
continue working ruthlessly to maintain their standard of living. Ultimately, one can see
the inherent flaws with Jordan’s managing style. This management style was not one of
camaraderie and employee satisfaction. Jordans management style was used to further his
personal ambitions and to manipulate his employees into thinking that they were helping
themselves, rather than solely benefitting him.
Now one must ask, “Were there negative repercussions of this management style
on his employees?” The simple answer is, yes. Due to Jordan’s manipulative nature, he
was able to persuade his employees that they were the makers of their own destiny and
that through his expertise they could live the quote-un-quote “rich life”. Because of this,
employees joined Stratton and took on large sums of debt to buy cars, clothes, etc to live
this lavish lifestyle promoted by Jordan. As a result of this the employees were trapped.
They could continue to work and live a life they could not afford, or quit and default on
the loans they had taken out. Unfortunately, due to their lack of education and experience
in the industry, they were oblivious. Scorsese alludes to this in the penny stock scene
when Jordan talks about motives for getting on the phone. Jordan is well aware of his
band of misfits financial situation, but does nothing to stop it. In the eyes of the
employees, they were making tons of money and living the American dream; in reality it
was the paycheck from Jordan that kept them afloat.
In addition to persuading employees to live a lavish lifestyle, Jordan’s type A
personality and manipulative management style pushed employees to be competitive,
impatient, and aggressive. Employees were focused on making as much money as
possible and they didn’t like the idea of leisure time. Jordan’s impact on his employees is
exemplified in the Steve Madden IPO scene. During the scene, one employee was
cleaning his fish bowl a few minutes before Steve Madden Co. was to be publicly traded.
The senior vice president, Donnie Azoff, approached him and yelled at him for taking
leisure time even though he had finished all his work. This scene successfully portrays
how Jordan’s personality impacted his employees.
Jordan’s personality not only impacted the behavior of his employees, Jordan’s
personality also shaped employee perceptions of themselves. Employees deemed
themselves much more important in their new office locations than they felt when they
were working in the garage. Jordan was able to change employee perceptions of self
worth by transforming employees from average salesmen to potential CEO’s. Jordan told
his employees that their hard work would lead them to own their own brokerage
companies under his guidance. Additionally, Jordan had his employees suit up in order to
change their perceptions of their jobs. He even allowed tailors to come to the office.
The organizational culture at Stratton Oakmont is easily identifiable given the
strong characteristics that conform it. As mentioned previously, the Stratton Oakmont
management team sought to create a culture that is shaped by a high encouragement to
innovate and maximize outcomes. Undoubtedly, ambition plays an important role in the
values that mold the employees attitudes. By disregarding the smallest sign of unethical
practices, they continued to take risks driven by the obsession for money: A means to an
end. This self-interested approach of working was inherited by Jordan Belfort and the cofounders. The managers jointly introduced a passion for exponentially growing their
profits by doing whatever it was necessary. With such a strong personality coming from
upper management, the employees’ perception of the company’s culture was easily
influenced and adapted to suit the overall set of goals. Since organizational culture
“refers to a system of shared meaning held by members that distinguish the organization
from other organizations”, at Stratton Oakmont it gave a strong personality that rapidly
caught the attention of the market. This strong culture became the unbreakable link that
everyone within the company shared; and that eventually developed devotion and
unconditional loyalty. This sentiment grew by the effects of organizational climate,
reinforced by a common perception towards Stratton Oakmont.
Stratton Oakmont’s organizational culture also played an important role in the
continuous development of the company. A strong organizational culture is one where
the majority of employees hold the same basic beliefs and values towards their respective
organization. A strong culture that engages employees and changes their view of work
will bring extreme amount of benefits to the organization. Employees with high, core
self-evaluations believe in their inner worth and work ability. These employees will have
higher job satisfaction since they are more likely attracted to a challenging job with their
ambition. Stronger companies with constructive cultures often have a strong sense of
unity and vision within the company.
Ritual is another key to reinforce values of the organization. It creates a shared
identity among employees of an organization. In the movie, Mark Hanna meets Jordan
for lunch and performs a ritual by humming and beating his chest. This performance is
considered a warm up ritual for Mark that serves as a source of encouragement and
motivation for Mark and his employees.
Rewards can also serve as encouragement for employees. Rewarding employees
helps to create a positive organizational culture and outcome. Janja Lalich argues that,
“Cult leaders also make it difficult for people to leave. They set up interlocking
systems of influence and control that keep followers obedient and prevent them
from thinking about their own needs. Cult leaders may offer "rewards" sometimes material, more often ephemeral - that keep followers committed to the
leader and to the organization's goals.”
In the movie, Jordan makes sure to encourage his employees with rewards. He
encourages his employees by rewarding them with a grand celebration after they achieve
a new goal. For instance, in the beginning of the movie, Jordan throws a celebration party
with midgets, women, and other entertainment features. Not only did this celebration act
as a reward for the employees, the celebration served as a way to reinstate the peculiar
personality of Stratton Oakmont.
This celebration party also emphasizes the loyalty and dedication of the
employees within the company. During the party, the secretary agrees to shave her head
for $10,000. The secretary was willing to shave her head because she needed the $10,000
for plastic surgery. Throughout the scene, the woman is holding the money in her hands
as her head is unevenly shaved. Ultimately, this scene exemplifies how effective
leadership can enhance the performance and job satisfaction of subordinates through
motivation. Jordan Belfort enjoyed the process of persuading employees, from query to
trust. His ultimate goal was to control his employees with supreme power. In this scene,
the woman expresses how satisfied she is with her job. This job satisfaction gives her the
courage to make the decision to shave her head. In the end, her decision is based on her
faith and trust in Jordan and the company.
An excellent example of the employees’ devotion to the organization and worship
to its’ leaders is found towards the end of the movie when Jordan gave his resignation
speech. In this scene, Jordan starts by saying that the day has come when he has to move
on. From the beginning of the speech, the spectator can automatically infer that Stratton
Oakmont’s employees are not pleased with the decision the CEO seems to have made.
Nevertheless, they show approval of the direction the company will go and the
managerial adjustments made. As the speech takes an extremely sentimental path,
sentiments of confidence and trust start to flourish while applauses and tears are noticed
among the crowd. Suddenly, Jordan retracts himself by deciding not to leave the
company triggering an explosive and collective reaction of euphoric celebration.
Although there are several scenes in this move where strong positive sentiments towards
the company are evidenced, this one in specific seems to expose them with greater
emphasis.
As described in the aforementioned sections, we see the inherent flaws associated
with Jordan Belfort’s management style. In response to this we have provided a
suggestion to point Stratton Oakmont’s moral compass in the right direction. Our
suggestion would be to implement a board of directors or overseers to watch over the
direction that senior management is taking the company. This board of directors would be
responsible for approving: all company business transactions; weekly, monthly, and
yearly brokerage sales meetings and speeches; and lastly company sponsored events. This
would ultimately reduce the ability of management (Jordan) to influence the workforce.
Diminishing Jordan’s influence on the sales staff would take away Jordan’s confidence,
bringing him back to the state in which he entered Wall Street. Monica M. Sharif and
Terri A. Scandura state that,
“Research has found ethical leadership to predict employee satisfaction with the
supervisor, dedication, willingness to report job problems to management, and
perceived leader effectiveness.”
This finding supports our recommendation to hire a board of directors . Ultimately, if
employees are no longer under the manipulative control of Jordan, they would realize the
implications of their business practices and could work to make appropriate changes.
Due to Jordan’s autonomous nature and sole ownership of Stratton Oakmont, it is
unlikely that our suggested solutions would be successfully implemented. It is unlikely
that Jordan would be willing to step back as a leader and allow a board of directors to
micromanage his company. Although, a board of directors may provide the best route for
Stratton Oakmont, Jordan’s self-pride is likely to get in the way.
To conclude, Jordan’s manipulative management style had a huge impact on the
company’s employees, as well as, the company's culture. Jordan was able to lead by
example and train his employees to follow in his footsteps. Employees were led to live
lavish lifestyles and were taught that money is the answer to all problems. These lavish
lifestyles led employees to become dependant on their jobs which fueled employees
loyalty to Jordan and Stratton Oakmont. Our analysis concludes with one final point.
Ultimately, Jordan’s manipulative management style caused many ethical, as well as,
legal implications that led to the demise of Stratton Oakmont.
Reference Page:

Sharif, M., & Scandura, T. (2013). Do Perceptions of Ethical Conduct Matter
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Lalich, J. (2004). Watch Your Culture. Harvard Business Review, Volume 82(1).
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