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Enron's Collapse

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Submitted By demarim
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Enron's Collapse
LDR 531
December 12, 2011
Thomas Ach

Enron's Collapse Enron was considered to be one of the largest scandals in American history. Americans were shock to find out about the unethical practices that were carried on by leaders and employees of the organization. Enron used many methods of trickery to appear more lucrative than the company really was. While Enron’s stock ascended so did its debt. Individuals within the company decided that they were going to trade millions of dollars in the organization’s stock. When the company’s bankruptcy was discovered, the organization’s stock decreased tremendously. This was a demoralizing hit to investors and also the economic market. While many individuals were shocked from these unethical practices from Enron, many organizational behavior theories can explain how this was permitted in the workplace.

Organizational behavior is described as a “field of study that investigates the impact that individuals, groups, and structure have on behavior within organizations, for the purpose of applying such knowledge toward improving an organization’s effectiveness” (Robbins & Judge, 2011). Enron’s executives were motivated much more by how they could benefit from this and not how they could make the company more prosperous. The organizational theory that focuses on self-interest is the political model. Executives having greed and arrogance lead them to focusing only on the good for themselves and not the company, which led to acting unethically. Enron’s executives and managers impacted the direction in which the company was headed. When companies tend to lack moral leadership, ethical standards and principles will not be sustained because it breaks down the company’s corporate structure.

In many cases some signs of unethical behavior are not considered immoral because when an

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