ipl-logo

Enron Leadership Essay

718 Words3 Pages

Leadership is the ability to influence a group towards the achievement of a vision or set of goals. The source of this influence may be formal, such as that provided by managerial rank in the organizations. (Robbins and Judge, 2009).
Various researchers studied the company and reasons behind this downfall. While dubious accounting practices are said to be the reason for the failure, these practices were driven by the top leaders and hence bad leadership can be considered to be the reason for the organization’s failure. Kenneth Lay (Enron’s CEO and chairman) and Jeffrey Skilling (Enron’s CEO) were primarily responsible for driving Enron to its downfall as they were not ethically and morally responsible. These leaders were ruthless and engaged …show more content…

At the same time, he encouraged employees and investors to buy the stock. Lay was used Enron’s money, resources including private jets for his personal use. (Behr, 2004). Skilling was the main driver behind the inflated and over-estimated financial statements of the company. He pushed for adoption of the accounting concept of “mark-to-market” at Enron. This is said to be one of the major reasons of the collapse of Enron. Skilling, like Lay, also sold Enron shares based on inside information when an imminent collapse of the company became obvious to him.
The top leaders and senior executives were paid very high salaries when the company was going down. At the same time, the leaders engaged in every chance to make more money by took part in special entities and fake partnership.
Overall, the acts of Kenneth Lay and Jeffrey Skilling created a culture of fraud and cheating at Enron that permeated the entire organization and encouraged unethical behavior among the employees. The object of the two leaders was to make money for them. The collapse of Enron was primarily due to practices and fraud of these two

Show More
Related
167 Words | 1 Pages

In the case of Dale Emerson and Ernest Wallace I believe that Wallace was ethically in the wrong. As common small talk with family, Emerson was talking of a planned takeover of Dakota Gasworks, Inc. to his uncle on a weekend fishing trip. Unfortunately, Emerson’s uncle took the inside information from his nephew and used it to his advantage to gain large profits. As chief financial officer for Reliant Electric Co., under the SEC Rule 10b-5 act, “which prohibits the commission of fraud in connection with the purchase or sale of a security,” (Miller, 2014, pg. 618) both Emerson and Wallace could potentially be liable for the actions.

Read More
1275 Words | 6 Pages

He would entice investors to give him money, and then illegally use that money as “collateral” for multiple loans. “Investment dividends” were paid out regularly to give the impression of successful management, but this money was simply contributions from other investors. Ward, quite simply, was the Bernard Madoff of the

Read More
671 Words | 3 Pages

One example was the Credit Mobilier scandal where major stockholders of the Union Pacific Railroad formed the Credit Mobilier company and sold their shares to influential congressmen. These executives essentially hired themselves and stole taxpayer money, a very lucrative scandal. Scandals like the Credit Mobilier were widespread and executives from many other railroad companies often stole from their own companies. Many executives would manipulate the rail companies' stocks to profit greatly. Executives would often bribe influential politicians, and work together to profit themselves.

Read More
729 Words | 3 Pages

In this case, Lay as chairman of Enron makes fraud and then tried to defraud this agreement and transaction through selling company shares in a larger amount than expected amount. So, in this case, Lay must pay entire loan amounts to creditors and debt amounts recollection both as a company official receiver and internal liquidator. He tries to resolve and run the Enron with beneficial terms but not get success on this because of excess fraudulent activities and external winding-up court

Read More
467 Words | 2 Pages

The business world wasn’t the only thing corrupt but the railroads were too. With the railroad industry growing the companies knew they could charge huge rate and gain a large profit. Congressmen were paid off to be quite about the scandal and kept it to themselves. The railroads raised the stocks and were given to well-liked companies.

Read More
378 Words | 2 Pages

Bernie Madoff’s reputable stock trading business, venerable reputation as a Wall Street insider, and ingenuity as a fraudster enabled him to dupe experienced wealthy investors and bilk them for billions of dollars (Ferrell, 2009). Madoff understood how to leverage the currency of relationships to establish trust, the significance of exclusivity to attract wealthy clients, and how to covertly appeal to people’s greed (Frontline, 2009). As a result, Madoff leveraged his credibility as a Wall Street insider to disarm investors, insisted that his services could only be contracted by invitation only, and failed to charge fund management fees. Subsequently, Madoff enable feeder fund managers to make more money in fees, which resulted in more aggressive

Read More
887 Words | 4 Pages

Enron Analysis Enron is a great play which presents a dry story about business in a colorful and cartoonish way and impressed me with a variety of elements, including video, music, choreography, and dance. This is a play depicts the spectacular collapse of a Texan energy giant-Enron. As an audience, I witnessed how a business empire was built on shadows, accruing debts of 38 billion dollars and finally going bust in this two hours and thirty minutes play. In the following passage, I will describe, analyze, and interpret this play both about its script, including characters and plots, and its production, such as the videos, stage props and customs.

Read More
1393 Words | 6 Pages

As we have progressed through this course, the reoccurring theme that tends to show up is the idea of the entrepreneurs who set the cornerstones to what the United States was going to be as well as what it stands for today. However the ways they sometimes did this are considered fraudulent today but back then were seen as a way to gain a competitive advantage over the competition. In this essay, all the of the successful business powers such as John Rockefeller, Cornelius Vanderbilt, and many others used there successful entrepreneurial skills to produce economic growth as well as to gain a competitive advantage to be the best in their industry and collect the most money. With being such powerful players in their particular industries, it

Read More
578 Words | 3 Pages

This was best illustrated in the Crédit Mobilier scandal, where Oakes Ames, a congressman who had stocks in Union Pacific, gave fellow influential congressman stocks in Union Pacific so that they would ignore the wrong doings of Union Pacific and Crédit Mobilier. Most of the corruption stemmed from the Social Darwinist belief that only the fit would survive. Most companies would repeatedly look for ways to have an advantage over their competitors due to the fear that they would be beaten. The most popular way that these companies would try and gain an advantage over each other would be to have office holders in their pockets, which could get them land grants and other benefits at the drop of a dime. This was just one type of corruption that was going on under Republican office.

Read More
432 Words | 2 Pages

Organizational culture is also; only as good as the persons for which they apply Enron, Tyco, and WorldCom are all memorable. These scandals happened in 2001 and 2002.

Read More
2411 Words | 10 Pages

E.g. the decisions taken at Enron to create off-balance-sheet transactions (disguising that failed corporation’s true, deteriorating results) • When the board overpays a CEO, it’s the shareholders who lose a share of the profits which could have been either shareholder dividends or capital gains are instead going into the CEO coffers. • Though there is a divide that executives incentive plan actually motivated them to cause their companies to perform better , if company results improved for any reason (including pure serendipity), the executives received higher pay: cause and effect didn’t matter. The company’s performance itself drove the incentive compensation—whether under the control of the CEO and his team or not. •

Read More
1527 Words | 7 Pages

The Enron scandal resulted in new compliance measures and assisted in putting in place new measures to close the gaps companies have used to evade

Read More
931 Words | 4 Pages

Kenneth Lay, Mr. Jeffrey Skilling and the company CFO, Mr. Andrew Fastow .The management level of Enron Corporation had misconduct the code of ethics and fail to performing the duties of a corporation which is telling the truth of the situation of a corporation .Instead , they tried try to hide the truth of their financial status and create a false prosperity situation and make the public believe on them in order to support their shares prices . The misconduct of code of ethics by the management level by Enron corporation has led to the another question – The ultimate responsibility of a corporation towards society ? The ultimate responsibility of a corporation is to gain profit or become a stable economic unit ?

Read More
1479 Words | 6 Pages

Leadership: Definition Leadership is the process of influencing the motive of the employees and so directing, guiding them to the proper completion of the short-term goals and the mission, vision of the firm. Leadership referring to achieve a specific set of goals of the business enterprise by minimizing risk and more advantage of opportunities is also called Entrepreneurial Leadership (Rao, 2015). Today leadership is such an iterative process when the leaders should have a variety of qualities and expertise in different area of management. Here, different theories will be explained which can clearly identify the scope, the responsibilities and the area of expertise required to be successful leader.

Read More
1304 Words | 6 Pages

‘Organizations provide its managers with legitimate authority to lead, but there is no assurance that they will be able to lead effectively’ (Lunenburg, 2011). Organizational success usually requires a combination of both management and leadership. In today’s dynamic work environment, leaders are expected to challenge the present state of affairs, and to motivate and convince organization members. Managers are needed to assist in creating and maintaining a positive and well-functioning workplace. ‘Leadership and management are often considered practically overlapping concepts’ (Bohoris and Vorria, 2007, p. 1).

Read More

More about Enron Leadership Essay

Related Topics

Open Document