Barbarians at the Gate- Movie Overview

Within the study of the different leadership styles, it is important to take a closer look to

cases illustrated by literature and movies. There is not a perfect leadership approach, many of the

theories conclude that a variety of factor determinate whether to apply one or other style.

However, there is consensus about how and when each leadership style (supportive,

participative, and achievement-oriented) can generate the best outcome. In the movie Barbarians

at the Gate, viewers can observe examples how a leadership styles do not always fit to confront

particular situations, and the consequences of implementing them whit a mislead perception of

outsiders can generate a negative result.

The movie begins showing the story of a young boy who being a highly persuasive sells

man becomes CEO of a company named RJR Nabisco. His name is Ross Johnson, and he was

facing a down-swing because for a questionable period, the company’s stock price has not arisen.

The company has a Tabaco and food division, and the movie continues to show different events

that he has planned in order to enhance the perception of the company and attract buyers and

investors. In this fraction of the movie it is seen that Johnson unnecessarily expend the money of

the company in expensive parties and gifts for the attendants, and this attitude concerns to the

manager of the food division. Johnson is also under the expectancy of the launch of a new type

of cigarette in which the company has spent a lot of money, and whose testing result will

challenge his personality and generate an unfavorable situation that comes to show viewers

Johnson’s leadership style cons.

In the middle of the movie, Johnson has to face the failure of the smokeless cigarettes and

his hope of delivering an outcome that bring the stock price up. Premiers, the name of the new

cigarettes, cannot be launch within the period previously announced because the test result
showed that people think they test like crap. At the same time, Johnson has received a proposal

to make a leverage buyout of the company using a new financial figure that will allowed him and

the eventual partner to have total ownership over the shares. However, this buy out is based on

high leverage and at some point Johnson would has to be under this eventual partner control.

Thinking about the leverage buyout as a scape for further control, and knowing that he will not

be able to introduce the new cigarettes Johnson decided to do this project the himself. Johnson

tells David, president of the food division, about his intention, guaranteeing him he will not harm

the company or his division, and that in any case David will get away with a lot of money. David

does not seem to like this decision, especially because it did not include him, so what seemed to

be a way to keep control for Johnson, finally drove him to lost his job and the possibility of

owing the RJR Nabisco.

Within the process of getting the board’s approval for the buyout, Johnson and his

friends, one of whom is part of the financial institution articulating the buyout agreement,

confronted many obstacle, somehow the information is known by outsiders including the initial

interested Henry Kravis, who seemed to have a lot of financial power and a wild understanding

of the financial system, and who watching his idea put on place by someone else without giving

him any credit, made a higher proposal to the board. While Johnson’s team has proposed to buy

the company at $75 dollars a share, Henry offered to buy it at $90. At this point, Johnson tried to

partner with Henry requesting to remain in control. Henry denied this petition and maintain his

offer. With two groups trying to buy the company, and the negative perception from the board of

directors, Johnson continued the fight to acquire the company making a final proposal for $112

dollars a share; however, Henri has more financial power and obtained the company at $120

dollars a share.
 Ross Johnson management style embodies an excess of confident, having succeed for

over 30 years with a seller personality built his character as someone able to persuade everybody

disregarding the situation. When the company was facing a low stock price, Johnson devoted his

effort to provide a solution by acting upon his personality as a sells man. According to Bill

Saporito and his reporter associates Cynthia Hutton and Rosalind Klein Berlin, Johnson was

always trying to sell a good deal that would raise the company stock price: He was trying to

merge the company with his main rival Philip Morris; additionally, he tried until the end to at

least be part of the deal with KKR1. The critical situation turned everybody against to him. As a

CEO, he was call to remain calm, the failure of a product and a persistent low stock price can be

alarming, but Ross clearly showed loss of emotional control. Once can describe his leadership

style under the trait theory, and define his behavior using the consideration approach, according

to which a leader is friendly, approachable, supportive, and show concern for the employees.

Yet, those qualities were put in a second place when the goal was no longer the benefits of the

company and shareholder but preserve his privileged position as CEO.

The image of Ross Johnson presented by the movie is the picture of a leader who was

unable to adapt his behavior to an existent contingency. Fiedler contingency theory is

exemplified by RJR Nabisco situation during 1980, Johnson leadership style did not match to

confront that current situation, and his overconfidence keep him away from making the right

decision. Being erroneously sure that he would accomplish his goal, he denied the president of

the food division’s involvement. The reality behind the leverage buyout decision was the failure

of cigarettes premier, and only Johnson and the president of the Tabaco division knew this part

of the story. Acting toward his personal benefits, Johnson broke subordinate commitment:

1
Available on: http://archive.fortune.com/magazines/fortune/fortune_archive/1989/04/24/71880/index.htm
Johnny Cranes, president of Nabisco, and whose interest toward the company were never

considered while making the leverage buyout decision, made Johnson’s rival KKR strategy easy.

He provided the information KKR need in order to evaluated the range of the proposal. Johnson

not only failed on handling the contingency but he did so on not applying the normative theory

decision rules.

Three benefits of being a relationship oriented manager are that people generally trust

them, they find initial support, and stablish a good imaged to outsiders. The chairman Johnny

Hugo is one of the person that initially trusted and supported Johnson on his decision, despite his

responsibilities with the board, he seemed to be on Johnson side half of the movie. Additionally,

the stock price, although concerned people, did not seem to be a reason to des prestige Jonson

image.

However, there are three cons of being a relationship oriented manager. Contingency not

always play in leader’s favor, trust not always stand when performance does not bring good

result, and information management cannot go alone with people intimacy. When the stock price

of RJR Nabisco remained low, people stared to question Johnson’s leadership style, information

about his unnecessarily expenditures was revealed and the president of Nabisco could not hide

his discomfort. The publication of the buyout agreement, which contend Johnson’s gains from

the deal, easily changed people perception of Johnson, he moved from being a friendly

concerned man to be a greedy and selfish person.

It is important to understand that as humans, leaders are not always objective or

perceiving situations in the right direction. Fiedler approach recall that matching leadership

styles to the situation using the Less Preferred Coworker questionnaire won’t work if leader

changes are intending to fit in a perceived leadership style and not in a real leadership style. Ross
Johnson leadership style was not applicable to confront those conflict, buying does not request

the same qualities that selling, and the lack of real concern toward the desires of others

determinate his ultimately outcome.