ORGANIZATIONAL CULTURE

Organizational Culture

Organizational Culture

Introduction

This paper presents with the critical analysis of the organizational culture that led to the debacle of Enron Corporation-the collapse of Enron Corporation provides a case of organizations that have felled as a result of scandals by their leaders in the recent past. The manner in which a leader behaves during the conduct of the business has an impact when it comes to organizational performance. A leader has the effect of developing either a good organizational culture that will lead to success or an unethical one that will contribute to organizational failure.

Discussion

The principles of excellence, corporate responsibility and ethics were the hallmarks of Enron's business strategy. However, the crisis started when the organization was using questionable accounting practices in an effort to ensure that its credit rating maintained. The organizational culture was to blame for the debacle of Enron Corporation. It is thus important to define what an organizational culture entails before examining its effect on Enron debacle. Organization culture refers to the shared ideologies, beliefs, assumptions, attitudes, expectations and norms (Hatch, 2006).

Organizational culture enables managers to; support organizations' business strategy, make staffing decisions, set performance criteria, guide the nature of acceptable interpersonal relationships in organizations and select appropriate management styles. Organizational culture provides consistency to an organization by integrating diverse elements into a coherent set of beliefs, values, assumptions and consequent behaviors. One can determine culture in any organization by the following factors; history of organization, types of leadership, size of organization, technology in use, goals and objectives, environment as well as, people in the organization (González, 2009).

Organizational Culture at Enron

Throughout its existence, Enron Corporation signifies the extremes of an organization working in a global context and capitalist economy. Within less than a year, the firm departed from being a sign of “the most innovative company” model of ethics, social responsibility, and success driven, most focused and benevolent to an indication of greed, mismanagement and deception (Sims, Brinkmann, 2003).

Deregulation in the power sector permitted Enron to act as a match maker which eventually brings sellers and buyers at the same platform. Enron made profits from exchanges, and from the differences in the prices of buyers and sellers. The same deregulation let Enron be innovative and creative, for the very first time, a firm requires to work within the limits, allowing innovating and operating beyond the limits. With the passage of time, Enron's contract's turned out to be increasingly diverse and drastically more complex and complicated. The firm's culture developed and progressed along with its product and services.

Jeffery Skilling, company's former president and CEO, enthusiastically refined a culture to push limits with his mantra of,” Do it right, do it now and do it better”. He supported and pushed employees to be innovative, independent and assertive. “Enron's Transformation”, case study of Harvard Business Review, employees figured out as saying, “You have to act and deliver to a standard that was continually rising,” the only thing that mattered was adding value," and "It was all about ...