Enron Scandal
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Enron and why it was a failure
Enron and why it was a failure
Marcus E. Tucker
University of Phoenix
Enron and why it was a failure
Enron, known today as one of the biggest business failures this country has ever seen. Enron who in the late ninety’s controlled twenty five percent of all electricity and natural gas contracts traded worldwide, and was billed by Fortune magazine as “America’s Most Innovative Company’’ for six years straight, became one of the largest bankruptcies in U.S. history in December 2001(MSN, 2008). This paper will explain how Enron failed as a company by using unethical business practices and also compare and contrast Enron’s leadership, top management and organizational structures to certain Organizational Behavior theories.
Enron failed because it lacked proper leadership and poor decision making from its top executives. Leadership is a very important component of OB; it also is a huge reason behind Enron’s downfall. Enron’s top executives were good leaders; the only problem is that they were leading the company to destruction. One of the many definitions of a leader states “Leadership is the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objectives” (). Kenneth Lay was able to accomplish this task with his people, his employees bought into his beliefs and the culture of the company. He was not only able to gain a following from his employees, but also from outsiders who were invested in his success such as the United States government. Employees were working eighty our weeks and sacrificing their today for a better tomorrow, they believed that by working for Enron that they were going to richer than they had ever imagined. If Enron’s managers had made better decisions and had stuck to OB theories such as planning, organizing, leading and controlling they should have realized that the...
Enron and why it was a failure
Marcus E. Tucker
University of Phoenix
Enron and why it was a failure
Enron, known today as one of the biggest business failures this country has ever seen. Enron who in the late ninety’s controlled twenty five percent of all electricity and natural gas contracts traded worldwide, and was billed by Fortune magazine as “America’s Most Innovative Company’’ for six years straight, became one of the largest bankruptcies in U.S. history in December 2001(MSN, 2008). This paper will explain how Enron failed as a company by using unethical business practices and also compare and contrast Enron’s leadership, top management and organizational structures to certain Organizational Behavior theories.
Enron failed because it lacked proper leadership and poor decision making from its top executives. Leadership is a very important component of OB; it also is a huge reason behind Enron’s downfall. Enron’s top executives were good leaders; the only problem is that they were leading the company to destruction. One of the many definitions of a leader states “Leadership is the process of influencing others to understand and agree about what needs to be done and how to do it, and the process of facilitating individual and collective efforts to accomplish shared objectives” (). Kenneth Lay was able to accomplish this task with his people, his employees bought into his beliefs and the culture of the company. He was not only able to gain a following from his employees, but also from outsiders who were invested in his success such as the United States government. Employees were working eighty our weeks and sacrificing their today for a better tomorrow, they believed that by working for Enron that they were going to richer than they had ever imagined. If Enron’s managers had made better decisions and had stuck to OB theories such as planning, organizing, leading and controlling they should have realized that the...