Enron was a company in the energy industry founded in 1985 by Kenneth Lay. Enron was based in Huston, Texas and employed approximately 20,000 people. In 2001, Enron filed for bankruptcy after many years of lying, fraud, and dishonesty with their financial books. Enron was pretending to be a huge, successful company when in reality, it was in a financial hole so deep there was no way of getting out.
Discuss and analyze the culture at Enron. In what way was it effective? In what ways was it the catalyst towards Enron’s collapse?
The culture of Enron was influenced by a variety of factors. The combination of executive greed, a lack of corporate social responsibility, no ethics and get-it-done attitude contributed to Enron’s collapse. In addition the deregulation and lack of governmental oversight contributed to Enron’s wild business practices. This coupled with strong political lobbying, questionable ties with high level governmental official brought Enron to its knees. The company promoted a culture of deceit, getting results and getting ahead without concern for ethics or well-being of the employees and other market players. The compensation packages made people behave irrationally even if many of them were aware of what they were doing. The executives belived that main component of success is to motivate employees through high bonuses, commissions stock options and other kinds of monetary compensation. That kind of culture generates sales, but the financial position of the company was all a lie which at the end could no longer be covered. The culture at Enron was very competitive. The competitiveness came out in different ways. Employees would do whatever they could to get ahead, not caring who they hurt as long as they got to the top. The Milgram’s Experiment was created to prove so. The experimentee had to memorize a list and every time the experimentee got something wrong, the experimenter flipped a switch that sent an...
Cited: Griffin, Ricky W. “Charismatic Leadership”. Fundamentals of Management 6th Edition. Melissa Acuna. Mason: South-Western Cengage Learning, 2012. 347. Print.
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