Enron, the company was a model of a learning organization when it exploded onto
ID: 392122 • Letter: E
Question
Enron, the company was a model of a learning organization when it exploded onto the business stage. Over time it went oh so bad. New Federal laws were enacted, lives were ruined, people lost their retirement savings, and corporate executives went to jail. On pages 358 and 359 you will find a case study with 2 questions that I would like for you to answer:
1 How can the theories in Chapter 13 and information about leader influence on culture be used to explain the unethical practices at Enron?
2. What can be done to reduce unethical leadership? Does it simply require laws to prevent this kind of thing from not happening in the future or is there something that is fundamentally missing from our culture writ large? LEADERSHIP IN ORGANIZATIONS EIGHTH EDITION GARY YUKL
Explanation / Answer
Enron's organisation structure was the core a reason of the fall. Their organisational structure allowed them to misrepresent earnings as well as to modify their balance sheet for providing information to the shareholders about favourable performances. This type of approach directly points towards creating an organisational culture which is made for scanning. This is specific process lead to the bankruptcy of the company and this is a direct effect of actions of Kenneth lay, rebecca mark as well as jeffrey skilling.
If an individual inside the organisation have lower standards of ethics then it would definitely affect the overall working structure at his personal level. Bing dishonest to your organisation can lead to several implications as well as problems including many critical situations where employee has to be fired from the organisation for betterment. In this the specific case many ethical standards inside the organisation were totally different and this type of approach lead to the fall of the organisation rather than being focused at any individual. This to separate different type of ethical levels are highly influential and can leave very bad impact on the organisational level.
Mission of a lousy code of conduct was the main reason of such a specific practices in enron, if the code of conduct should have been implemented a strictly from the very beginning this is specific type of situation have not been occurred for the organisation as it directly decrease the overall available opportunities and increase the chances of scam and scandal. This type of approach also reduced the level of control over the organisational efforts as the top management was also involved in the specific scamming process.
Lax has proven to be one of the best companies with a great ethical culture which involves a strong code of ethics and conduct in Operation. Lax and company has definitely been a role model for many other companies operating in the similar environment. If enron has adopted such a specific strategy then the processes including wrong approach for modifying the balance sheets and other factors involved in the specific scandal.
Reason of an electronic monitoring system as well as transparency in the organisation using high standards in code of conduct and ethics would have saved enron from this specific scandal. This type of approach would have also created more intuitive working platform for the employees saving enron from such a specific scandal.
P.S. - Please leave a comment if any explanation is needed.
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