Enron is a good example of a corporate culture based on greed and deceit. View t
ID: 458567 • Letter: E
Question
Enron is a good example of a corporate culture based on greed and deceit. View this brief video:
https://youtu.be/Mi2O1bH8pvw
Pay particular attention to the espoused organizational culture of Enron by its former CEO and COO. What type of culture did Enron exemplify? Discuss what you know of Enron’s countless ethical failures, which led to its subsequent bankruptcy. Also discuss the lessons/insights that corporate America learned from Enron. What current organization can you name and describe that is the opposite of Enron’s?
Explanation / Answer
Failur of ENRON Enron used various methods of deception to appear more profitable than it really was, including through creating off-the-book entities to which Enron transferred its substantial debt (Jennings, 2005). While the company’s stock rose, so did its debt, and company leadership began using insider information and trading millions of dollars in company stock. When the scandal and impending bankruptcy were revealed, the company’s stock decreased from $90 to less than $1, a devastating hit to the financial market and numerous investors and employees (Betz, 2002) Enron’s executives allowed themselves to be motivated much more by what would benefit themselves than what would truly benefit the company. The political model of organizational behavior describes this focus on self-interest (Chima, 2005). Money, greed, arrogance, and hubris led company executives to lose focus on working for the good of the company and to act unethically (Gini, 2004) Impacts of Company Executives The executives and managers set the informal aspects of the company, such as values, attitudes, interactions, and norms Signals of Unethical Behavior In the case of Enron, warning signals about Enron’s use of unconsolidated affiliate companies for financial purposes were overlooked by the board of directors because the practice was considered one of Enron’s standard business practices. As a result, the board of directors allowed the company to omit from the balance sheet at least $27 billion, which eventually led to the company’s collapse Further Causes The Enron executives and employees were influenced by groupthink. Groupthink involves group members hiding or discounting information to maintain group cohesion. The group members collectively overestimate the group’s morality and ability, ignore contradictory information, and pressure each other to preserve conformity Enron’s collapse was devastating in many regards However, Enron's failure indicates that the "ethical deficit" of corporate America remains a serious problem For any corporation to be healthy and productive, it needs to be strong in four core areas: (a) financial capital in terms of investments and profits, (b) technological capital in terms of cutting-edge software and hardware, (c) human capital in terms of knowledge, expertise, and creativity and (d) social-spiritual capital in terms of ethics, relationships, meaning and purpose The COCA-COLA company is good governace company . A best Example opposite of it
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