Jeffrey Skilling of Enron: Leading a Corporate Cukt

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Enron was a company that fully intended to dominate the world market but instead magnificently crashed and burned as the largest corporate failure in global history. What is seldom acknowledged is that Enron had a comprehensive, state-of-the-art and award winning management control and governance system in place. The failure of Enron provides a blueprint of how insufficient attention to changes in leadership and culture can undermine such a state-of-the art management control system (Free, Stein & Macintosh, 2007, p. 1). The effectiveness of leadership controls is highly dependent on a company’s culture whose development is guided by its leaders. Skilling has been compared to a charismatic cult leader and Enron a corporate cult. This is a disturbing yet accurate comparison since a cult is a “group exhibiting excessive devotion to some person or idea, and employing unethical manipulative techniques of persuasion and control…designed to advance the goals of the groups’ leaders (Tourish, n.d., p. 2). This accurately describes CEO Jeff Skilling’s leadership at Enron. Skilling’s leadership style emerged over the years. Even in high school he was not only known as an intellectual but as someone who had a proclivity for risky activity (Free, Stein & Macintosh, 2007, p. 3). When Skilling was appointed as CEO in 1996, Enron’s culture began a drastic change. The company had the panache of proper management controls that included a formal code of ethics, an elaborate performance review and bonus regime, a Risk Assessment and Control group (RAC), and the conventional powers of boards and related committees. However, Skilling advocated a corporate culture that overrode their management controls and the importance of carefully balancing core concepts of leadership, organizational culture and control within Enron (Free, Stein & Macintosh, 2007, p. 2). Skilling used several methods for reshaping Enron in order to exploit and “bend the rules” often through sedition of...
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