Enron

Introduction

Enron is a remarkable story of the creation and destruction of value in a company. Enron was born in 1985 and began in the United States as a natural gas pipeline company that started trading energies, and launched into new markets, to include metals, electricity, weather, and bandwidth (Bartlett, 2002.) During the late 1990s and early 2000s it seemed that everything Enron touched turned to gold, Enron was a trading powerhouse. Enron attracted the best talent, from within the energy industry, and Wall Street. Unfortunately, in 2001, the Enron Empire collapsed (Li, 2010) and could not recover from the decisions its leaders established and as a result, the company went out of business. The purpose of this paper is to describe the behaviors the organization displayed and how leadership, management, and organizational structures contributed to Enron’s business failure.

Enron's Managerial Organization

The collapse of Enron is known as one of the biggest corporate scandals in the twentieth century, lead by greed, lack of leadership, and bad investment practices. Employees of Enron lost their jobs, retirements, and investments because of the top executive’s poor business decisions; there was moral failure from the top down. Much of the blame for what happened at Enron is on the founder of the company Kenneth Lay, his successor Jeffrey Skilling, and chief financial officer Andrew Fastow (Bartlett, 2002.) Each of these men failed to meet important ethical challenges of leadership to include; abuse of power, excess privilege, and dishonesty, conflicting treatment of internal and external constituencies, broken loyalties, and negligent behavior (Li, 2010.) There were no boundaries at Enron; the main focus in the company for everyone was achieving high profits regardless of the consequences. By the end the Enron tragedy not only affected the market but also left investors, employees, and anyone associated with the company with feelings of mistrust...