The Fall of Enron

The fall of Enron

Tyler N. Elliott

Organizational Communication

3/2/14

Enron was a multi-million dollar company that had everything going for them. They were highly successful and looked as though they would be a powerhouse company for many years to come, or so it seemed. This paper discusses the fall of Enron, the collapse of a giant because of horrible decisions made by the upper management of the company. Ken Lay and Jeff Skilling were the top dogs of Enron, and were two of the most influential players in the scam that caused the company to capsize. Throughout this piece I will discuss how and why the company ended up in shambles, as well as connect concepts and theories from our text that relate to the situation. Two concepts that stood out most when writing this paper were the concepts of the Machine Metaphor, the flow of communication, and Blake and Moutons Managerial styles. Each of these helps to explain the structure that Enron had built itself on, and why that structure did not hold the weight of lies.

Summary:

This documentary examines the rise and fall of the former corporate juggernaut that went by the name of Enron. The film breaks down every angle of the fall of Enron and goes back as far as 1987 to describe how Enron’s chairman, Kenneth Lay, apparently encouraged risk taking and profit skimming of two oil traders in Enron’s Valhalla office because they were bringing a lot of money into the company. Enron also had an “aggressive accounting” philosophy that truly started to take hold once CEO Jeff Skilling was hired. The documentary explores the extensive lengths that the company went to in order to appear profitable. Enron bribed financial analysts with huge contracts for their firms, they hid debts by basically having the company loan money to itself, and they also used California’s deregulation of the electricity market to manipulate the state’s energy supply. This film ultimately reveals how Lay, Skilling and...