This study will provide a review of Barbarians at the Gate: The Fall of RJR Nabisco, by Bryan Burroughs and John Helyar. The study will include a brief summary of the principal points made by the authors; a description and discussion of the economic, social/cultural, legal, political, and technological environments affecting RJR Nabisco at the time of the leveraged buyout attempt; and a consideration of the strategic options for RJR Nabisco, along with which option was actually chosen.
From the title of the book, we understand immediately and clearly that the authors of the book feel that greed is the overriding force at work in the story of RJR Nabisco. Indeed, the book is an extension of the title in the sense that the story told by the authors is not a story of business, but a story of money. It is not a story of products, or of technology, or of services (except for the service of making money), but rather it is a story of money itself.
As the authors write on the last page of their book, "The founders of both RJR and Nabisco would have utterly failed to understand what was going on here. It is not so hard, in the mind's eye, to see R.J. Reynolds and Adolphus Green wandering through the carnage of the LBO war. They would turn to one another, occasionally, to ask puzzled questions. Why did these people care so much about what came out of their computers and so little about what came out of their factories? Why were they so intent on breaking up instead of building up? And last: What did all this have to do with doing business?" (Burrough & Helyar, 1990, p. 515).
With respect to the process of the leveraged buyout itself, it is implicit that the authors feel there are numerous profound problems with the leveraged buyout process, but they deliberately skirt a final conclusion: "Those looking in these pages for a definitive judgment of leveraged buyouts on the American economy will no doubt be disappointed. It is ...