4. Individual Reputation Unhinged from the Firm: Hardly Anybody Goes Down with the Ship

This chapter describes how individual reputation has become distinct from firm reputation. First, it presents the fall of Salomon Brothers as one final example of how the old reputational model used to work. Under that model, unethical or illegal behavior resulted in the collapse both of the firm and of individual employees’ careers. Next, this chapter introduces Michael Milken and Drexel Burnham Lambert to highlight three false assumptions of the old model. First, the old model assumed that cheaters never prosper; however, Milken and his colleagues walked away from the wreckage of Drexel with many millions of dollars. Second, it assumed that employees always ...

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