Analysis of Enron
“What Went Wrong at Enron?”
Trident University International
Phillip M. Cherry
Module 5 Case Assignment
ETH 501: Business Ethics
Dr. Michael Garmon
March 1, 2012 3/1/2012
Introduction In this paper I will provide a critical evaluation of the Corporate Culture at Enron, explain how the business ethics and operations were influenced by the corporate culture, and what went wrong. In addition, I will describe what leadership’s roles and responsibilities were, how key leaders worked to negatively reshape the culture, and the adverse consequences as a result of their behavior. Lastly, I will discuss how Human Resource Management could have impacted the “moral compass” at Enron and affected a positive outcome. Let’s begin by looking at the events leading up to the formation of Enron.
The Creation of Enron Willis Straus had been a long time chairman of InterNorth Corporation and was characterized as beloved, a father figure, who was powerful, but not arrogant (Madsen & Vance, 2009). It is a shame he did not stay on in some capacity after the merger with Houston Natural Gas which gave birth to Enron. He sounds like the type of leader that took a page out of the British Empire’s book on business. In the old days of the British Empire managing agents conducted business in a “gentlemanly” way. Confidence and collaboration rather than cutthroat competition marked their doings (Stadler, 2010). Strauss had created an egalitarian corporate culture, where honesty, integrity, and compassion mattered. Unfortunately, Will Strauss left, Sam Segnar took over, and this is as we will see was the beginning of Enron’s demise. Segnar was the exact opposite of Strauss, although it did not matter since he was not chairman for long after the merger was complete. Ken Ley was the chairman of Houston Natural Gas, and it did not take him long to attract other board members to his side
Trident University International
Phillip M. Cherry
Module 5 Case Assignment
ETH 501: Business Ethics
Dr. Michael Garmon
March 1, 2012 3/1/2012
Introduction In this paper I will provide a critical evaluation of the Corporate Culture at Enron, explain how the business ethics and operations were influenced by the corporate culture, and what went wrong. In addition, I will describe what leadership’s roles and responsibilities were, how key leaders worked to negatively reshape the culture, and the adverse consequences as a result of their behavior. Lastly, I will discuss how Human Resource Management could have impacted the “moral compass” at Enron and affected a positive outcome. Let’s begin by looking at the events leading up to the formation of Enron.
The Creation of Enron Willis Straus had been a long time chairman of InterNorth Corporation and was characterized as beloved, a father figure, who was powerful, but not arrogant (Madsen & Vance, 2009). It is a shame he did not stay on in some capacity after the merger with Houston Natural Gas which gave birth to Enron. He sounds like the type of leader that took a page out of the British Empire’s book on business. In the old days of the British Empire managing agents conducted business in a “gentlemanly” way. Confidence and collaboration rather than cutthroat competition marked their doings (Stadler, 2010). Strauss had created an egalitarian corporate culture, where honesty, integrity, and compassion mattered. Unfortunately, Will Strauss left, Sam Segnar took over, and this is as we will see was the beginning of Enron’s demise. Segnar was the exact opposite of Strauss, although it did not matter since he was not chairman for long after the merger was complete. Ken Ley was the chairman of Houston Natural Gas, and it did not take him long to attract other board members to his side
References: Edelman, D., & Nicholson, A., (2011). Arthur Anderson Auditors and Enron: What happened to Their Texas CPA licenses? Journal of Finance and Accountancy, 8, 1-9. Retrieved February 17, 2012, from Accounting & Tax Periodicals. (Document ID: 2560466541). Kello, J., (2011). Seven Crucial Leadership Skills. ISHN, 45(12), 24. Retrieved February 17, 2012, from ABI/INFORM Trade & Industry. (Document ID: 2537780951). Stadler, Christian., (2010). What We can Learn from the History of Outstanding Corporations. Palo Alto, CA, USA: Stanford University Press. Retrieved from: http://site.ebray.com/lib/tourou/docDetail.action?docID=10459577 Zanibbi, L., (2011)