Organizational and Leadership Issues at Enron Persuasive Essay by Nicky

A brief discussion on how the leadership and organizational culture at Enron led to its collapse.
# 150986 | 734 words | 4 sources | MLA | 2012 | US
Published on May 15, 2012 in Business (Companies) , Business (Management) , Accounting (Fraud)

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The paper explores Enron's exclusive reliance on charismatic leadership of a totalitarian-style executive management regime, its cult-like nature of a ruthless organizational culture and performance management style, and the gradual erosion of appropriate ethical business standards and practices. The paper demonstrates how once executive leadership set out on a course of corporate fraud and corruption, the prevailing organizational culture virtually ensured the eventual collapse of the entire company.

Contributions of Charismatic Leadership and the Failure of Enron
Contributions of Organizational Culture and the Failure of Enron
Contributions of Totalitarian Management and the Failure of Enron

From the Paper:

"Long before the corporate collapse of Enron, company president Jeffrey Skilling and CEO Ken Lay had established a leadership style that was somewhat unusual in corporate America. That is because they relied exclusively on charismatic leadership in a highly-skilled field normally dominated by the transactional leadership model. Ordinarily, charismatic leadership is considered better suited to relatively unskilled work where personal motivation and identification with the organizational culture and mission are more important than technical expertise (Bass, 1997; Daft, 2005). Generally, charismatic (and transformational) leadership styles are considered to be too emotionally intense and draining on employees in industries where low turnover is expected. They are better suited to sales-oriented ventures in which relatively high turnover is expected (Bass, 1997; Daft, 2005).
"However, the principal issue with the Enron leadership style was that charismatic leaders are often extremely narcissistic, prone to excessive self-promotion, and intense competition even at the expense of ethical principles (Tourish, 2005). Likewise, charismatic leaders are often unreceptive to criticism or to any difference of opinion; in the case of Enron's leaders, Lay and Skilling established a corporate culture that was profoundly unreceptive to any views contradicting those promoted by executive leadership and more likely to result in punitive retribution up to and including dismissal for any intellectual dissention (Tourish, 2005)."

Sample of Sources Used:

  • Bass, B. "Does the Transactional/Transformational Leadership Transcend Organizational and Motivational Boundaries" American Psychologist, Vol. 52 (1997).
  • Daft, R. (2005). Management Mason, OH: Thomson South Western.
  • Olson, T. "'Slippery slope' led to Enron, CMU, Harvard researchers find." Pittsburgh Tribune-Review; August 29, 2007.
  • Tourish, D. "Charismatic leadership and corporate cultism at Enron: The elimination of dissent, the promotion of conformity and organizational collapse." Leadership, Vol. 1, No. 4, (2005).

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