Examing a Business Failure-Enron

Examining a Business Failure

ENRON

Holly Nowikowski

LDR 531/ Organizational Management

September 21, 2010

Instructor: Angela Guest

Abstract

Organizational behavior, or OB, “is a field of study that investigate the impact that individuals, groups, and structure have on behavior within organizations, for the purpose of applying such knowledge toward improving an organization’s effectiveness” (Robbins & Judge (2007). p. 6, para. 4). In this paper, I [Eliminate first person (I, we, our) in academic essays unless you are writing about a personal experience.] will explain how organizational behavior theories could have forecasted the failure of a large organization such as Enron. Enron was the nation's largest wholesale buyer and seller of natural gas and electricity. Revenues grew to $7 billion, and they were expanding the "gas bank" idea to any products people would buy. Throughout my research of Enron’s demise, it is apparent that the failure of this organization was due to poor management. Managers engage in many managerial activities. Those of which include, but are not limited to:

“Traditional management: Decision making, planning, and controlling, Communication: Exchanging routine information and processing paperwork, Human resource management: Motivating, disciplining, managing conflict, staffing, and training, Networking: Socializing, politicking, and interacting with outsiders” (Robbins & Judge (2007). p. 5, para. 4). I will discuss the importance of organizational behavior and the largest bankruptcy in U.S. history in the case of Enron and how poor business ethics, leadership, management, and organizational structures contributed to the failure.

Business Ethics

In any organization, it is important for there to be honesty in business dealings. Whether the key players are internal or external, all involved should be performing their duties ethically. According to Phil Corrado (2009) business ethics can not be discussed enough when referring to...