ENRON CORPORATION DEBACLE

Enron Corporation Debacle

[Institutes Name]

Enron Corporation Debacle

Introduction

The following essay is concerned 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 as far as the organizational performance is concerned. 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. Enron Corporation was established in 1985 and was very successful Energy Company in the United States. In the recent past, it was being ranked position 'seven' in the market capitalizations. It was a highly rated organization and acted as the United States' government adviser. Many employees wished that they could work in this reputable company. It was guided by the principles of excellence, corporate responsibility as well as ethics. 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. 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 (Hatch & Cunliffe, 2006, 18-34).

Culture in any organization is determined 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 (Hatch & Cunliffe, 2006, 18-34).

Discussion

Culture History of 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. It was regarded to represent as one of the best 21st Century organization in terms of economical and ethical.

A company with modest start, Enron started off in 1985 with a merger of two pipeline companies in Houston. Even though, this company has faced a couple of financially challenging years, but Enron managed to deal with it. In 1988, Enron redefined its business towards “energy broker” from “energy delivery” because of deregulation in electrical power market. Enron rapidly shifted itself from a surviving one to flourishing one. Deregulation in the power sector permitted Enron to act as a match maker which eventually brings sellers and buyers at the same ...