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Enron's Failure

In: Business and Management

Submitted By daphinec
Words 1055
Pages 5
Enron’s Failure

Daphine Carter

Leadership -LDR/531

July 18, 2012
Lorinzo Foxworth, DM

Enron’s Failure Abstract Enron was the world’s top electrical, communications, pulp and paper, and natural gas company. Unfortunately, due to poor leadership and unethical decisions Enron failed to remain a stable and productive company. Enron due to a misrepresentation of funds found itself on the brink of bankruptcy. The company stock was worthless and within a short period of time has gone down by 89.00 per share. A scandal was revealed that involved the companies own accounting firm, Arthur Anderson, and Enron. The unethical practices of Enron were discovered in 1990 resulting in an investigation, which included finding out why stock prices being manipulated. This paper will identify the failures of the management and leadership of this company, how correct and positive organizational behavior and leadership of the management team would have affected the configuration of the now disgraced company. (Cernusca, 2011). Organizational Behavior Theories Enron’s failure could easily be predicted if the company ensured that the accountants and leaders were following the code of ethics set forth by the company. They adopted unethical practices like using unconsolidated affiliate companies for financial purposes and omitted expenses that were in the amount of billions of dollars. Enron misused their motivation tactics by hiring and promoting individuals who were driven by monetary incentives and rewards. This provided Enron the opportunity to entice their employees to take excessive risks and earn profits by any means. This resulted in Enron’s employees doing whatever was needed to reach their performance goals (Bills, n.d). The leaders and shareholders within the Enron...

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