Communication and Leadership in Enron
Abstract
Enron became one of the largest natural gas and energy trading companies in the world.
During the 90 's Enron was considered as an innovative company within the global business market. Enron was known for its unique innovative technologies and distinctive approach to trading in the world of e-commerce. On December 2, 2001, Enron announced the biggest bankruptcy in history and when many people hear the word, Enron they associate it with the one of the most important accounting scandals in our lifetimes rarely is it associated with a breakdown in communication. Matthew Seeger and Robert Ulmer (2003, p. 59) assert that responsible leadership is built upon three communication-based leader responsibilities. Those factors being, (1) communicating appropriate values to create a moral climate, (2) maintaining adequate communication to be informed of organisational operations, (3) maintaining openness to signs of problems. A breakdown in any of these aspects can cause varying degrees of turmoil for an organisation; Seeger and Ulmer articulate that the problems experienced by Enron were the result of a direct failure to carry out communication-based responsibilities. This paper has a specific focus on determining how the communication of Enron’s leaders contributed to its failure. Although the specific financial shortcomings are not fully addressed in this paper, the corporate communication and culture dictated the intentions of these shortcomings and therefore can be held responsible. Before attempting to analyse the concepts of Seeger and Ulmer some background information about Enron and ethics will be explored.
The key leadership figures at Enron were Kenneth Lay chief executive officer (CEO) and founder, Jeffery Skilling President and Andrew Fastow chief financial officer (CFO) (Seeger & Ulmer, 2003 p. 67). Not only are these leaders prime examples of corporate greed and corruption they are also guilty of bad leadership. Warren Bennis (2007, P. 2) has
Enron became one of the largest natural gas and energy trading companies in the world.
During the 90 's Enron was considered as an innovative company within the global business market. Enron was known for its unique innovative technologies and distinctive approach to trading in the world of e-commerce. On December 2, 2001, Enron announced the biggest bankruptcy in history and when many people hear the word, Enron they associate it with the one of the most important accounting scandals in our lifetimes rarely is it associated with a breakdown in communication. Matthew Seeger and Robert Ulmer (2003, p. 59) assert that responsible leadership is built upon three communication-based leader responsibilities. Those factors being, (1) communicating appropriate values to create a moral climate, (2) maintaining adequate communication to be informed of organisational operations, (3) maintaining openness to signs of problems. A breakdown in any of these aspects can cause varying degrees of turmoil for an organisation; Seeger and Ulmer articulate that the problems experienced by Enron were the result of a direct failure to carry out communication-based responsibilities. This paper has a specific focus on determining how the communication of Enron’s leaders contributed to its failure. Although the specific financial shortcomings are not fully addressed in this paper, the corporate communication and culture dictated the intentions of these shortcomings and therefore can be held responsible. Before attempting to analyse the concepts of Seeger and Ulmer some background information about Enron and ethics will be explored.
The key leadership figures at Enron were Kenneth Lay chief executive officer (CEO) and founder, Jeffery Skilling President and Andrew Fastow chief financial officer (CFO) (Seeger & Ulmer, 2003 p. 67). Not only are these leaders prime examples of corporate greed and corruption they are also guilty of bad leadership. Warren Bennis (2007, P. 2) has
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