The Rise and Fall of Enron: Relationship between Strategic Management and Leadership

Learning Outcomes and Assessment Feedback

Name of the Assessor

Learning Outcomes
Assessment Criteria (AC)
Assessor Feedback
LO 1

Understand the relationship between strategic management and leadership
1.1 Explain the link between strategic management and leadership

1.2 Analyze the impact of management and leadership styles on strategic decisions

1.3 Evaluate how leadership styles can be adapted to different situations LO 2

Be able to apply management and leadership theory to support organizational direction
2.1 review the impact that selected theories of management and leadership have on organizational strategy

2.2 create a leadership strategy that supports organizational direction Overall Result/Grade

Internal Verification Report
Internal Verification
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Date
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Contents

Contents 2
Executive Summary 3
The Corporate Culture 5
The Leadership of Kenneth Lay 5
Contributing Factors for Enron’s Debacle 7
Power Abuse 7
Fraudulent Accounting Practices 7
Employees and Board members 8
Investors Grief 9
Auditors and external regulatory agency 9
Conclusion 9
The debacle of Enron, led not only the company to bankruptcy but also its employees and shareholders. Unethical leadership and vested interests played a significant role in its imminent failure. Very few had the courage to challenge authority and leave when faced with ethical violations. No member of the firm had the courage to report the misbehavior of Lay and other executives to the attention of the public before the crisis erupted (Cruver, 2002). Enron’s board also disregarded the fact of Arthur Anderson, who served as auditor and consultant to Enron did not discourage them from carrying out fraudulent activities and practices. 9
References 10

Executive Summary

In the winter of 2001 just about 2 weeks before Christmas, American

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