...Examining a Business Failure - Tyco International Ltd Organizational behavior is defined as the study of the behavior of individuals, groups and structure and the impact to an organization. Organizational behavior uses the information gathered from this study to improve the organization’s effectiveness (Robbins, 2011). Organizational behavior focuses on a number of areas including the behavior of leaders, inter-personal communication, processes and structure within the organization, conflict and employee motivation. The behavioral disciplines of psychology, social psychology, sociology and anthropology form the basis for the study of organizational behavior. Psychology and social psychology studies the impact of conditions in the workplace and the impact to the employees’ performance. Within these sciences, learning theorists also studies the impact of change and how to reduce the challenges of change in the work environment [ (Robbins, 2011, p. 12) ]. According to the authors, sociology, and anthropology contributes to the study of organizational behavior by focusing on the relationship of employees as a group and the impact to the organizational structure. The culture and group dynamic of the employees will direct the level of motivation that in turn will negatively or positively impact the performance of the organization [ (Robbins, 2011, p. 12) ]. Psychology evaluates changes in individuals’ behavior and the impact to learning, Emotions, leadership, and decision-making...
Words: 1292 - Pages: 6
...Examining a Business Failure: Enron Examining a Business Failure: Enron Most people today have heard of the big Enron scandal through various different forms of entertainment such as television, radio, and the internet. Even those business people that never have time to watch the news heard some bits and pieces of the rise and fall of Enron. The basic issue that got Enron in trouble to begin with was the lack of good leadership and management. We know that insider trading is an unethical business practice. With that said, the big business executives and other members of the administration team at Enron had unethical business practices, and only one of those being insider trading. This paper will discuss the contributions of leadership, management, and organizational structures that led to the demise of Enron. Leadership, Management, and Organizational Structures Leadership has many definitions. According to Yuki, (2006) “leadership is behaviors, influence, interaction patterns, role relationships, and occupation of an administrative position” (p. 2). With this definition in mind, the average person can see the clear issues behind the fall of Enron. Csorba (2006) states that Enron’s management was built based on deception and lies. Even though some of the Enron leaders knew fraud and deception was taking place, like lifting conflict of interest rules for the CFO, they continued to look the other way and continued their employment and working dishonestly. One of the many...
Words: 707 - Pages: 3
...Examining a Business Failure - Enron Patricia Davis LDR531 May 14, 2012 Thomas Ach Examining a Business Failure - Enron * Organizational behavior is defined as a field of study that investigates the impact that individuals, groups, and structure have on behavior within the organizations for the purpose of applying such knowledge toward improving an organizations effectiveness; specifically organizational behavior focuses on how to improve productivity; reduce absenteeism, turnover and deviant workplace behavior; and increases organizational citizenship behavior and job satisfaction (Robbins & Judge, 2007). This paper will summarize the Enron scandal that caused the company to fail and show how organizational behavior theories could explain the failure. * According to Wikipedia - The Free Encyclopedia, retrieved on May 13, 2012, “Enron was formed in 1985 by Kenneth Lay after merging Houston Natural Gas and InterNorth. Several years later, when Jeffrey Skilling was hired, he developed a staff of executives that, through the use of accounting loopholes, special purpose entities, and poor financial reporting, were able to hide billions in debt from failed deals and projects. Chief Financial Officer Andrew Fastow and other executives not only misled Enron's board of directors and audit committee on high-risk accounting practices, but also pressured Arthur Andersen, their outside accounting firm, to ignore the issues” (Enron Scandal). * To make Enron’s shares...
Words: 880 - Pages: 4
...Examining a Business Failure G. L. Ivie University of Phoenix Organizational Leadership LDR/531 Rodney Walton, M B A. March 18, 2012 Examining a Business Failure This paper is a brief examination into how different variables both dependent and independent in relation to various theories of organizational behavior played a significant role in the failure of the once profitable and prominent Swiss Air Airline company. It provides specific examples of how certain organizational behavioral theories if applied before the company’s insolvency might have predicted the airlines impending bankruptcy. It also compares and contrasts the different aspects of the company’s leadership, management, and corporate structure, and the significant role that these organizational behavioral variables played in the company’s downfall. Swissair The year of 2001 was not only noted for the terrorist attacks of 911, but it was also the year that the world witnessed the collapse of Swissair, one of the world’s most successful airlines and the first to officially fly the Swiss Flag as a national carrier. In October of that year the airlines was forced into filing Sweden’s form of Chapter 11 in an effort to protect itself from its creditors. Several organizational behavioral theories and their associated variables could have predicted the likelihood of the failure based on the behavior of the corporation’s top leadership and the management of its subsidiaries as the company began the strategic...
Words: 1232 - Pages: 5
...Examining a Business Failure The Chrysler Group LLC was established from a not so successful merger between Daimler and Chrysler in 1998. It was in 2007 that Damiler sold Chrysler to Cerbus Capital Management. After filing for Chapter 11 bankruptcy, Chrysler Group LLC, formed in 2009 to establish a global strategic alliance with Fiat S.p.A., produces Chrysler, Jeep, Dodge, Ram, Mopar, SRT, and Fiat vehicles and products. With the resources, technology, and worldwide distribution network required to compete on a global scale, the alliance builds on Chrysler Group’s culture of innovation, first established by Walter P. Chrysler in 1925, and Fiat’s complementary technology that dates back to its founding in 1899 (Chrysler Group LLC, 2012). This paper will show what organizational behavior theories could have been used to predict the company's failure. Reasons For The Chrysler Failure A partnership is a mutually beneficial and continual relationship between seller and a buyer. Partners prefer to be based on dependence to each other than to behave as adversaries. Both will lose if any of them would abandon the partnership (Gherasim, 2001). Partnerships came in various forms such as mergers, acquisitions, or joint ventures. A company in trouble may utilize any given one as an option to achieve organizational growth or a global presence. Chrysler's reason for failure was that the partnership began solely on financial and economic information. What was not taken into account...
Words: 971 - Pages: 4
...Title of Paper : Examining a Business Failure Name: Steven Turyahika Course: LDR/531 Organizational Leadership. Date: 05/08/2010 Instructor Name : Professor Paul Wallace Introduction This paper examines a business failure that occurred at Enron Corporation, an American energy company based in Houston, Texas. The corporation was formed in 1985 by Kenneth Lay after the merger of Houston and InterNorth natural gas pipeline companies. In the early 1990s when the federal government deregulated energy production, the company was able to thrive due to expanded markets that enabled the corporation to sell energy at high prices. By 1992, Enron had become the largest merchant of natural gas in North America and the gas trading business became the second largest contributor to Enron’s net income, with earnings before taxes and interest of $122million (Wikimedia Foundation, Inc, May, 2010 ). In an attempt to achieve further growth, Enron pursued a diversification strategy and by 2001, Enron had become a conglomerate that both owned and operated gas pipelines, pulp and paper plants, broadband assets, electricity and water plants internationally. The corporation also traded in financial markets for the same types of products...
Words: 1675 - Pages: 7
...Examining a Business Failure The following paper will examine WorldCom and how the business failed. It will also compare and contrast the contributions of leaderships, management and the organizations structures to how the organization failed the way they did. WorldCom began as a small long distance telecommunication company and progressed into one of the largest telecommunications in the world and the second largest long distance company. It began as a small company in Jackson, MS by Bernie Ebbers and grew to become a darling of the new economy and of Wall Street. Failure within a large organization WorldCom was the number two long distance provider, in July of 2002 WorldCom file bankruptcy. This was the largest bankruptcy ever in U.S. history with a $41 billion dollar debt load, and more than $107 billion dollars in assets and equipment (Ramero and Atlas, 2002). Bernard John “Bernie” Ebbers the former CEO of WorldCom grew the company into one of the largest communications providers in the world. In light of his resignation from WorldCom in 2002 a Securities and Exchange Commission investigator found out that Ebbers and WorldCom admitted that he had inflated $3.8 billion and it also uncovered some $11 billion in fraudulent accounting practices that had fueled WorldCom’s rise. Ebbers entered the telecommunication industry providing long distance services in 1983 with a Jackson, Mississippi company formally known as LDDS. Ebbers grew the organization with a series of...
Words: 1085 - Pages: 5
...exaExamining a Business Failure: Enron Examining a Business Failure: Enron Most people today have heard of the big Enron scandal through various different forms of entertainment such as television, radio, and the internet. Even those business people that never have time to watch the news heard some bits and pieces of the rise and fall of Enron. The basic issue that got Enron in trouble to begin with was the lack of good leadership and management. We know that insider trading is an unethical business practice. With that said, the big business executives and other members of the administration team at Enron had unethical business practices, and only one of those being insider trading. This paper will discuss the contributions of leadership, management, and organizational structures that led to the demise of Enron. Leadership, Management, and Organizational Structures Leadership has many definitions. According to Yuki, (2006) leadership is behaviors, influence, interaction patterns, role relationships, and occupation of an administrative position (p. 2). With this definition in mind, the average person can see the clear issues behind the fall of Enron. Csorba (2006) states that Enron’s management was built based on deception and lies. Even though some of the Enron leaders knew fraud and deception was taking place, like lifting conflict of interest rules for the CFO, they continued to look the other way and continued their employment and working dishonestly. One of the many...
Words: 707 - Pages: 3
...Examining a Business Failure: ENRON LDR 531 Organizational Leadership December 5, 2011 . Examining a Business Failure Effective managers and leaders contribute to the organizational success of an organization. Companies lacking strong managerial leaders failing to enforce the ethical code of conduct of an organization are prone to organizational failure. Yukl (2006), states, “One viewpoint is that leadership occurs only when people are influenced to do what is ethical and beneficial for the organization and themselves” (p. 4-5). The notorious Enron scandal created a historic impact to the organizational culture and processes of businesses in the United States. The following paragraphs will address organizational behavior theories, which could have predicted Enron’s failure. Furthermore, a comparison of management, leadership, and organizational structures is scrutinized to determine the influence each had on Enron’s failure. Who was ENRON? Enron was founded in 1985 when Kenneth Lay merged Houston Natural Gas and InterNorth creating Enron (CBCNews, 2006). In the early 1990s Kenneth Lay commenced the sale of electricity at reasonable prices. However, Congress deregulated sales of natural gas. As a result, Enron’s earnings increased and became the largest retailer of natural gas. To expand, Enron diversified and incorporated gas pipelines, pulp and paper, broadband services, water, and electricity plants. Furthermore, the deregulation allowed Enron executives...
Words: 899 - Pages: 4
...Examining a Business Failure University of Phoenix Organizational Leadership LDR/531 Kenya King January 25, 2010 Examining a Business Failure Seven years ago a very successful business man named Vince McMahon wanted to expand his business but in an innovative way. Mr. McMahon was and still is President of the World Wrestling Entertainment (WWE). He has successfully taken a product and marketed it worldwide. His primary demographic is 12-24yr olds but WWE has hooked a much broader crowd. The irony in the success is the wrestling matches are scripted and a winner is pre-determined. The fans, though they know this, don’t seem to care. After all, it’s called WWE. In 2000, Mr. McMahon set his sights on buying the Canadian Football League but was thwarted when the governors of the CFL didn’t support the buyout. Thus, the XFL was born as a joint venture between the XFL and NBC. The XFL was a single entity league meaning that all teams were owned by the XFL. There were 8 teams total, games were played on Sat nights and televised on NBC, and players were made up of former NFL players and athletes from all over the world. The XFL would play immediately after the NFL Super Bowl and play 10 games over a 2 month period. Player salaries were structured based on position played with bonuses going to winning teams. Since this was a football league Mr. McMahon knew he had to have a strategic change to differ his league from the NFL. For example, there was no longer...
Words: 337 - Pages: 2
...Examining a Business Failure University of Phoenix LDR 531 Organizational Leadership May 10, 2010 Examining a Business Failure For a business to grow and become successful it needs to have a good organizational structure, leaders, and management. Without these items it is very hard for a business to grow and to maintain is status. When a business becomes very successful and forgets about these items, the business will then beginning to have problems. Once a business begins a downward spiral it is very hard to break free from it. WorldCom Inc. was one of those companies in which rose to fortune and fame but came crashing down once these elements were blurred or forgotten. Although the company did try to stay afloat, it was too late to reverse the damage. History WorldCom Inc. was developed by Murray Waldron and William Rector in 1983 by planning to create a discount long-distance provider named LDDS (Pandey & Verma, 2004). Then in 1985 Bernard Ebbers became CEO of LDDS, in which by 1989 it merged with Advantage Companies, Inc, and then in 1992 it merged with Advanced Telecommunications Corp. With these two mergers WorldCom Inc. grew into a large company with in the US and globally as well (Pandey & Verma, 2004). It was not until WorldCom Inc merged with MCI Communication Corp. that it began to have business with over 280 countries and locations worldwide (Pandey & Verma, 2004). WorldCom was listed as one of the Fortune 500 Company in Fortune magazine...
Words: 911 - Pages: 4
...EBF 2 Abstract The following article will discuss the failure of the organization known as WorldCom. It will determine the reason for the fall of the company failure comparing and contrasting what could have been done by management and leadership. The organizational theories that could have predicted the failure of management and the impact of the company’s structure EBF 3 The company knows as WorldCom was one the leading telecommunication giants of its day. WorldCom achieved its position as a significant player in the telecommunications industry through the successful completion of 65 acquisitions. Between 1991 and 1997, WorldCom spent almost $60 billion in the acquisition of many of these companies and accumulated $41 billion in debt. Two of these acquisitions were particularly significant. The MFS Communications acquisition enabled WorldCom to obtain UUNet, a major supplier of Internet services to business, and MCI Communications gave WorldCom one of the largest providers of business and consumer telephone service. By 1997, WorldCom's stock had risen from pennies per share to over $60 a share. Through what appeared to be a prescient and successful business strategy at the height of the Internet boom, WorldCom became a darling of Wall Street. In the heady days of the technology bubble Wall Street took notice of WorldCom and its then visionary CEO, Bernie Ebbers (Moberg, Romar, 2003). Acquisition after acquisition led to started to warrant...
Words: 626 - Pages: 3
...Examining a Business Failure Paper Rhonda Ellis-Thomas LDR/531 May 30, 2012 Dr. Felicia A. Bridgewater Examining a Business Failure Paper 2002 has witnessed its share of scandals. Enron, WorldCom, Tyco, and Global Crossing are just a few names to mention. WorldCom, the nation’s No. 2 long-distance phone company, filed for Chapter 11 bankruptcy protection in July 2002, approximately one month after it publicized that it had indecorously booked $3.8 billion in expenses (Beltran, 2002). The purpose of this paper is to describe how specific organizational-behavior theories could have predicted or explained the company’s failure and compare and contrast how leadership, management, and organizational structures contributed to the failure. From 1991 to 2002, WorldCom has efficaciously acquired 65 companies in which 11 of the companies were established in the first six years. WorldCom was the second largest long distance telecommunication company being succeeded by AT&T. The company has accrued over $40 billion of debt (Moberg & Romar). During this time, WorldCom was headed by Chief Executive Officer (CEO) Bernard Ebbers and Chief Finance Officer (CFO) Scott Sullivan. The CEO and CFO generated a structural philosophy, or belief, where the leaders and the managers are not to be suspected or questioned (Scharff, 2005). These behaviors lead to unethical and deluded activities that would later cause the fall of...
Words: 973 - Pages: 4
...Running Head: ENRON BUSINESS FAILURE Examining a Business Failure Paper Enron Rachel Y. Pointer University of Phoenix LDR/531 Ernest Price, Instructor January 17, 2010 Enron Business Failure One of the world’s most catastrophic business failures was Enron. Unveiled in October 2001, this scandal involves the renowned energy company Enron in conjunction with the accounting, auditing and consultancy schemes of Arthur Andersen. Enron disgraces ultimately lead the organization to a scandal that resulted in the biggest economic failure in United States history (TIME Enron, 2001). The Enron scandal also destroyed one of the foremost accounting agencies in the world, Arthur Andersen. Enron’s downfall was the result of their choice of accounting practices, in particular target entities and poor financial reporting. Enron’s accounting structure had so many loopholes that it was unproblematic for Andrew Fastow, the organization’s chief financial officer, to mask billions in debt from failed transactions and schemes. Fastow and other main executives purposely misinformed the organization’s board of directors and audit commission. The U.S. Securities and Exchange Commission (SEC) began an investigation into Enron after the organization’s stock price began to plummet and Dynegy offered to purchase Enron at a price much lower than normal market price. When the Dynegy deal did not happen, Enron filed for bankruptcy on December 2, 2001 under Chapter 11 of the...
Words: 1022 - Pages: 5
...Examining Business Failure 1 Abstract The author of this paper will present an examination of the business failure of WorldCom Incorporated and also compare and contrast the leadership management and organizational structures and failures. Examining Business Failure 2 Introduction WorldCom was the second largest long distance provider and on July 19, 2002 filed the largest bankruptcy ever in U.S. history with its $41 billion dollar debt load, and more than $107 billion dollars in assets. In 1999 WorldCom’s profits began to decrease when WorldCom reduced budgets on telecom services and equipment. The former CEO of WorldCom, Bernie Ebbers, submitted his resignation from his position. Being CEO, he was the leader of WorldCom, and as such, should help an employee feel supported and safe enough to discuss openly or acknowledge the problem he or she is responsible for. When he resigned from the company, it raised questions because Ebbers had about $366 million dollars in personal loans from the company. Upon the revealing of his resignation to the employees, they were alarmed that something important was happening within the company, but had not yet been exposed. Bernie Ebbers started out in the telecommunications industry in 1983 providing long distance services in Jackson, Mississippi at a company formally known as LDDS. Over the years, the company grew through a series of business deals. In 1995, the name of the company was changed from LDDS to WorldCom...
Words: 1130 - Pages: 5
