Leadership Case Study
Running head: LEADERSHIP CASE STUDY
Leadership Case Study
Susan Walters
Grand Canyon University
Enron’s corporate culture and unethical leadership led to its demise. Schuler (2002) writes that individuals are responsible for their actions regardless if they are symptoms of a systematic problem. He goes on to describe Enron’s corporate leadership and culture exemplified values of risk taking, aggressive growth, and entrepreneurial creativity, all good traits but then Enron became arrogant. Schuler (2002) points out that eventually risk taking and creativity lead to aggressive partnership arrangements, unethical dealings in the market, and abusive in their levels of greed and deception. This kind of cultural climate eventually killed Enron. A Fortune survey named Enron “The Most Innovative Company in America,” an apt description, for the fifth year in a row. It was also ranked number 24 among the “100 Best Companies to Work for in America,” and the Energy Financial Group ranked Enron the sixth largest energy company in the world based on market capitalization (Clayton, Scoggins, and Westley, 2002). Enron’s demise was a result of unethical issues, filled with warning signs and behaviors. Pelletier and Bligh (2008) described many of the unethical practices of the Enron including, unethical decision making as a function of hierarchy, lack of ethical behavior modeling, hypocrisy, and distrust of top leaders and elected officials. Pelletier and Bligh (2008) goes on with examples of organizational politics, including nepotism and cronyism, giving preferential treatment, typically in hiring, or promotion actions of relatives, spouses, or members of the in-group. Furthermore, the old boy network, which comprised primarily of men functioning to promote and protect male’s interests in the top leadership of the organization. These men received perks simply by being members of the male network. In contrast, Pelletier and Bligh (2008) points out that lower
Leadership Case Study
Susan Walters
Grand Canyon University
Enron’s corporate culture and unethical leadership led to its demise. Schuler (2002) writes that individuals are responsible for their actions regardless if they are symptoms of a systematic problem. He goes on to describe Enron’s corporate leadership and culture exemplified values of risk taking, aggressive growth, and entrepreneurial creativity, all good traits but then Enron became arrogant. Schuler (2002) points out that eventually risk taking and creativity lead to aggressive partnership arrangements, unethical dealings in the market, and abusive in their levels of greed and deception. This kind of cultural climate eventually killed Enron. A Fortune survey named Enron “The Most Innovative Company in America,” an apt description, for the fifth year in a row. It was also ranked number 24 among the “100 Best Companies to Work for in America,” and the Energy Financial Group ranked Enron the sixth largest energy company in the world based on market capitalization (Clayton, Scoggins, and Westley, 2002). Enron’s demise was a result of unethical issues, filled with warning signs and behaviors. Pelletier and Bligh (2008) described many of the unethical practices of the Enron including, unethical decision making as a function of hierarchy, lack of ethical behavior modeling, hypocrisy, and distrust of top leaders and elected officials. Pelletier and Bligh (2008) goes on with examples of organizational politics, including nepotism and cronyism, giving preferential treatment, typically in hiring, or promotion actions of relatives, spouses, or members of the in-group. Furthermore, the old boy network, which comprised primarily of men functioning to promote and protect male’s interests in the top leadership of the organization. These men received perks simply by being members of the male network. In contrast, Pelletier and Bligh (2008) points out that lower
References: Behr, P. and Hilzenrath, D. (2002). Top executives blamed in Enron 's fall: Internal investigation details failure to supervise partnerships. Washington Post. Retrieved on May 3, 2009 from Washingtonpost.com. Clayton, R., Scroggins, W., and Westley, C. (2002). Enron: Market exploitation and correction. Financial Decisions 1. Retrieved on May 3, 2009 from financialdecisionsonline.org. Culpan, R. and Trussel, J. (2005). Applying the agency and stakeholder theories to the Enron debacle: An ethical perspective. Business & Society Review,110(1),59-76. Retrieved on May 1, 2009 from Ebsco database. Department of Finance, Economics and Schuler, A. J., (2002). Enron’s corporate culture: Does corporate culture matter? AJ Schuler Solutions. Retrieved on May 3, 2009 from ajschuler.com. Gudikunst, A. (2002) Enron a study of failures. A Bryant University Publication. Retrieved on May 3, 2009 from Bryant.edu. Kulik, B. (2005). Agency theory, reasoning and culture at Enron: In search of a solution. Journal of Business Ethics, 59(4), 47-360. Retrieved on May 1, 2009 from Ebsco database. Pelletier, K. and Bligh, M. (2008).The aftermath of organizational corruption: Employee attributions and emotional reactions. Journal of Business Ethics, 80(4) 823-844. Retrieved on April 27, 2009 from Ebsco database.