Examining a Business Failure

Shameka Decuir

Business Failure

August 20, 2012

Professor Lynette Grizelle

LDR/531

Business Failure

Enron Corporation was one of the world’s leading electricity companies that suffered from a financial scandal, which implicated Enron and its accounting firm. The scandal consisted of the discovery of irregular accounting procedures, which took place during the 1990s. This caused Enron to file bankruptcy in December 2001 (Thomas, 2002). There are organizational behavior theories that could have predicted or explained Enron failure. Comparing and contrasting contributions of leadership, management, and organizational structure will give insight of Enron how these contributions may have led to its failure.

Organizational behavior is a field of study that investigates the impact that individuals, groups, and structure have on behavior within the organizations for the purpose of applying such knowledge toward improving an organizations effectiveness; specifically organizational behavior focuses on how to improve productivity; reduce absenteeism, turnover, and deviant workplace behavior, and increase organizational citizenship behavior and job satisfaction´ (Robbins & Judge, 2007). The top team members of any organization are senior leadership, board of directors, internal auditors, and external auditors. All these employees play a vital part of any organization because it is impossible for one person run an organization. The CEO alone does not manage a company, but the senior leadership and board of directors is also part of all the decision-making process. The auditors are there for making sure that there is monitoring of the system. In case of Enron, these personnel neglected to do their part. The success story of an organization lies in the collective efforts and smart decisions made by these important...