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Symbolic frame wenqian shao
Symbolic Frame
Wenqian Shao

What Happened at Enron

What is the purpose to run a company? How to shape the enterprise culture and values directly affects the strategic management decision makers. If enterprise culture management is ultimately determined by enterprise strategy management, the decision makers of Enron obviously ignored the rationality of corporate culture management.
When talking about the bankruptcy of Enron Corp, Welch, the former CEO of GM pointed out the Enron’s despise on corporate culture: " Enron is a first-class petroleum and natural gas supplier, but later they turned to the trade field, which they are completely not familiar with, and then they hired a lot of new staff. They changed their enterprise culture."
This kind of contempt of enterprise culture is the consequence that Enron changed their "focus strategy" and transferred into financial investment and so-called innovative business. In 1997, Enron's business expanded to natural gas derivative financial products transactions. In 2000, the "commodity exchange" accounted for nearly 90% of Enron’s sales. These contracts include interest rate swaps, derivatives and other complex financial products. However, this so-called "innovation" lies in the fact that the traditional accounting system is very difficult to confirm these new contract revenues. This is the "Enron trap". There is no doubt that Jeff Skilling had reversed the corporate values of Enron, especially in 1997, Andy Fausto was appointed as the CEO of Enron, started a new round of "unconventional" expansion under a limited market demand situation. At this time, Enron has already changed from a large energy company to a company engaged in energy derivatives transactions.

Analysis on the symbolic frame of Enron
About the reasons of the bankruptcy of Enron Corp, public opinions are divergent. But be sure, this causes by many factors. The failing culture and symbolic frame should be the main reason that leads to the failure of

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