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Fall Of Enron Essay

994 words - 4 pages

The Fall of Enron is a perfect example of management failure. Enron started off as a merger between Houston Natural Gas and Inter-North. A few years after the merger, Enron started changing the strategy and structure of the organization. Enron went from a raw materials management company to a company selling energy commodities. Enron proceeded to change from an energy company to a risk management firm that traded everything from commodities to derivatives.
Enron failed for many reasons, ranging from organizational leadership, conflict of interest, and the off-book financials, which created an ethical disaster for the organization. Various organizational behavior lessons have learned from ...view middle of the document...

This was like a little white lie that snowballed, and could not stop it until someone or something was hurt in the process.
The strength of a company is the reflection of leadership, vision, and the employees. Regardless of the size of a company, the company will not survive without efficient management and sincere leaders. Leaders must initiate structures that define themselves and goals of the company. Enron’s leaders, Kenneth Lay, Jeffrey Skilling, and Andrew Fastow betrayed the trust of the stakeholders by creating a structure of lies, scams, and manipulation. Confidence turned into arrogance, which led to the demise of the organization ("Enron 101," 2002, p. 43).
Enron’s leaders failed to implement a strict code of ethics. If a strict code of ethics had been followed Enron would have taken a few steps back in the sense of progress but could have tightened processes to make a comeback in an ethical manner and would still be around today. As a group the leader’s arrogance grew shadowing the morality and ability to lead the company. Kenneth Lay misused his ability to motivate other leaders. Employee-motivation is very powerful and Kenneth Lay recognized the manipulation potential and chose to use it in a negative manner. He rewarded Jeffrey Skilling’s behavior for falsifying reports showing that the company making exceptional growth. Andrew Fastow conveniently turned a blind eye in showing favorable performance on the balance sheets. These are some of the examples of how the leaders of Enron were misusing their leadership to manipulate who was involved in the falsification of legal documents.
The Demise of Enron is an example of how leaders can either help to lead in a positive manner or negative manner. Employees in this situation feared for their jobs so those who speculated that things were not right did not speak up. Top managers and board of directors in any organization are responsible for the development of an ethical culture in the organizations they run and in this particular example this was not a...

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