June 3, 2013
For some time now, the Enron Corporation has been declining and unraveling in the media. In a three year span, the corporation and its senior executives went from professional and public applause to scorn, scandal and bankruptcy. Arthur Andersen, Enron’s public auditing firm, is a public disgrace and has basically been destroyed. Thousands of stockholders have been emotionally and financially affected. Trying to figure out who is to blame for Enron’s failure, securities brokerage, major financial services firms in banking, and insurance companies have been faced with legal battles.
Based in Houston, Texas, Enron was an American corporation. When Enron was in business, it was a major player in natural gas, electricity, natural gas, paper communications, and pulp. For a consecutive six years, Enron was Fortune magazines’ winner of America most innovative company. However, in the middle of the hype, Enron found itself swarmed with major financial scandals with Arthur Anderson, who was one of the leading companies at the time.
Enron was created by a set of problems that could not be fixed without, legislating, reforming and regulating everything from financial reporting to corporate governance. How the executives influence the lower level members in a negative sense, which in turn explains the influence and affect it had on the organizational culture is one organizational behavior theory that could have predicted the failure of Enron. It was a failure of internal leadership – a failure to establish, practice, measure, and reward the right values. It is very important to get the culture right, if not, it would not matter what else is right. It would become a sort of financial-services firm specializing in trading energy commodities instead of pushing gas through the pipelines, Far from bolstering Enron’s strategy to become “The World’s Leading Company,” they unleashed a runaway culture of individual corruption and venality that turned it into the world’s biggest
Enron lead its own employees to becoming investors on a great scale. As the company collapsed, many people realized they lost their jobs and savings. Experiencing poor profitability in their core business, many companies, including Enron turned to cosmetic accounting and went into profits of low grade debt. ("What Brought About Enron’s Collapse?," 2009, p. 1) Enron’s innovative accounting practices allowed the corporation to claim money that had not yet been discovered. This caused Enron’s stock price to rise, but also determine Enron’s fate. The organizational structure lacked the fundamental building blocks of control and ethical behavior. Instead, Enron promoted profits however they could. This organizational structure was a direct reflection of its leadership Enron’s system of accountability, oversight, ethical disclosure, and corporate priorities contributed to their demise along with corporate greed despite them being