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Essay / Research Paper Abstract
This 4-page paper discusses how organizational behavior theory predicted the Enron failure. Bibliography lists 4 sources.
Page Count:
4 pages (~225 words per page)
File: AS43_MTenroorgt.rtf
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Unformatted sample text from the term paper:
into bankruptcy, liquidation or both. Though stakeholders professed surprise that firms such as Enron, Tyco, WorldCom, Adelphi and others would fail and fail so spectacularly, its the contention of this
paper that organizational behavior, and organizational behavioral theories could have explained the companies failures. In this paper, well examine the Enron scenario,
because it was the most spectacular and the one that was publicized most widely. Because it was so widely publicized, we have a unique opportunity to examine the organizational behaviors
that led up to the companys collapse. Its been said that ethical behavior and an ethical culture needs to come from
the top. Conversely, governance without ethics also is a top-down scenario. In the case of Enron, management forced an aggressive accounting policy to boost earnings (Hamilton, 2004). Led by chairman
Kenneth Lay and CEO Jeffrey Skilling, the company was encouraged to "translate any deal into a mathematical formula" that could be traded or sold to the special-purpose entities that were
set up to take on debt (Hamilton, 2004). Whats even more interesting is the organizational composition - Rebecca Mark, president of
Enron International and Azurix Water, said Enron employees consisted of ex-military, Harvard Business School and ex-entrepreneurs (Schepers and Gardberg, 2004). This type of environment led to an exaggeration of Vrooms
Expectancy Theory; not only were expectations to be met for rewards, but people were expected to go above and beyond - and they were rewarded handsomely for their efforts.
Meanwhile, the companys CEO Kenneth Lay described the culture as a creative one, in which human capital would help future growth (Schepers
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