Examining a Business Failure
Organizational Leadership LDR 531
October 17, 2012
Examining a Business Failure
Organizational behavior is defined as a field of study that investigates the impact that individuals, groups, and structure have on behavior within the organizations for the purpose of applying such knowledge toward improving an organizations effectiveness; it specifically focuses on how to improve productivity, reduce absenteeism, turnover and deviant workplace behavior, and increases organizational citizenship behavior and job satisfaction (Robbins & Judge, 2011). There are various factors that can lead to business failure. Among them are the lacks of a proper financial management, the inability of the company to adapting in today’s markets, and an inappropriate organizational structure. This paper will be discussed the organizational behavior theories that could predicted or explained the business failure of Enron. Also will compare and contrast how leadership, management and organizational structures contribute to the failure.
Enron was an energy and communications company that grew rapidly after the 1988 deregulation of the energy markets in the United States. At that time Kenneth Lay was the Chairman of the Board and the CEO was Jeffrey Skilling. It was named “America’s Most Innovative Company” from 1996-2001. It was on Fortune’s list of 100 best companies to work for in America for the year 2000, and it was highly commended for effective management and for having good benefits for the employees. However, the good deeds public image and effective management was not real, the company had ethical, regulatory, and financial issues.
Enron sell assets and create false earnings with the help of attorneys and Arthur Andersen, one of the largest accountants firm at that moment. Offshore entities were used to avoid taxes, inflate assets and profits, and hide losses. In August of 2000, Enron stocks reach its highest values of $90....