Rise and Fall of Enron
The rise and fall of Enron is a company that was lead to its own demise by it’s own leadership and ill business decisions. The motivational theories explained from the readings of Organization Behavior can correlate with the failure of Enron’s internal organization. Even though a company may appear to display successful business practices, the influence of leadership through management can ultimately lead the company to fail.
Enron’s code of ethics prided itself on four key values; respect, integrity, communication, and excellence. Codes of ethics should be a reflection of what the owners, investors, and employees work towards as an organization. Executives overlooked those values as they deliberately corrupted Enron by engaging in money laundering, accounting fraud, falsifying income, and other conspiracies. Employees continued to work their scheduled routine hours and showed loyalty by working through lunches and doing overtime, unaware that their invincible company would soon go under leaving them scrambling for answers. As the company struggled and faced financial ruin, executives betrayed their dedicated employees by informing them that Enron’s foundation was solid and continue to be profitable and had not allowed them to sell their stock in the company. At the same time, executives sold their share of the company and received millions of dollars before filing for bankruptcy and being investigated by the United States Justice Department. The unfortunate employees believed that they helped Enron develop into a successful company that it was and saw everyone as family. A combination of motivation and influential theories can explain Enron’s ultimate failure.
Enron’s failure as an organization can be described in the theories of motivation. Employees need somewhat of an inspiration to lead their efforts to attaining a solid goal. Edwin Locke’s goal-setting theory and self-concordance can both be brought to explain Enron’s failure. Edwin Locke’s
Enron’s code of ethics prided itself on four key values; respect, integrity, communication, and excellence. Codes of ethics should be a reflection of what the owners, investors, and employees work towards as an organization. Executives overlooked those values as they deliberately corrupted Enron by engaging in money laundering, accounting fraud, falsifying income, and other conspiracies. Employees continued to work their scheduled routine hours and showed loyalty by working through lunches and doing overtime, unaware that their invincible company would soon go under leaving them scrambling for answers. As the company struggled and faced financial ruin, executives betrayed their dedicated employees by informing them that Enron’s foundation was solid and continue to be profitable and had not allowed them to sell their stock in the company. At the same time, executives sold their share of the company and received millions of dollars before filing for bankruptcy and being investigated by the United States Justice Department. The unfortunate employees believed that they helped Enron develop into a successful company that it was and saw everyone as family. A combination of motivation and influential theories can explain Enron’s ultimate failure.
Enron’s failure as an organization can be described in the theories of motivation. Employees need somewhat of an inspiration to lead their efforts to attaining a solid goal. Edwin Locke’s goal-setting theory and self-concordance can both be brought to explain Enron’s failure. Edwin Locke’s
References: Robbins, S. P., & Judge, T. A. (2011). Organizational behavior (14th ed.). Upper Saddle River, NJ: Pearson Education. The Organization | July / August 2007 by Clinton Free, Mitchell Stein, and Norman Macintosh MANAGEMENT CONTROLS: THE ORGANIZATIONAL FRAUD TRIANGLE OF LEADERSHIP, CULTURE AND CONTROL IN ENRONhttp://www.iveybusinessjournal.com/topics/the-organization/management-controls-the-organizational-fraud-triangle-of-leadership-culture-and-control-in-enron