Essay On Enron And Their Fast Downfall. - Organizational Behavior - Research Paper

1258 words - 6 pages

Amber Thomas
Intro to Organizational Behavior
Short Paper #2
Enron Corporation was known as the biggest energy company but even the biggest and
best companies have internal problems. They went from being named the most innovative
company in America six years in a row to being a part of the largest investigation in the blink of
an eye.This energy company was the center of the largest public accounting scandal. One
moment they were on top of the world and the next they were declaring bankruptcy. Overall
Enron was filled with a large proportion of unethical acts that took place daily. Although, the
company was very innovative in itself the people working for the company could only be
described as competitive and greedy. One employee even went as far as to say “If I’m going to
my boss’s office to talk about compensation, and if I step on some guy’s throat and that doubles
it, then I’ll stomp on that guy’s throat.” This quote illustrates the extent to which employees
would go for financial purposes and just how unethical and corrupt Enron was at this particular
moment in time. This same sense of unethical behavior can be seen in Enron’s accounting
system. The system is known as the mark to market system where Enron employees came up
with ideas and plans or what can only be described as a “future moneymaker” and cashed out on
these ideas before they even came to life in order to disguise the financial problems Enron was
facing. These small problems within the company began to add up to large problems eventually
resulting in a scandal which stemmed from the overall issue concerning Enron’s flawed
organization culture.
Organizational culture is defined as being a system shared by members that distinguishes
the organization from other organizations. In this case, Enron is the main organization that
needed to be set apart from other organizations. Organizational culture played a large role in
quick downfall of Enron. The documentary revealed a lot of key facts but one that was very clear
from the beginning was how interested people were in the value of stocks concerning the energy
company because people knew they could get wealthy off of the stocks. People who worked for
the company took up the ideal of doing whatever is needed to keep the stock value rising through
whatever means necessary. Some of the employees would often go as far as to falsify documents
concerning financial performance.Enron’s culture in many ways supported these wrongdoing
throughout the company and that can be seen in their organizational culture.
Enron’s culture can be summarized in seven varying factors. Enron was ranked high in
innovation/risk taking, outcome orientation, and aggressiveness. The company ranked low in
attention to detail and stability.
Concerning the company’s characteristics, the one that stood out the most throughout the
documentary was the idea of innovation/ risk taking and stability. According to the textbook,
Risk taking is described as the “degree to wh...

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