Enron Case Study

Enron
Enron Corporation (former NYSE ticker symbol ENE) was an American energy, commodities, and services company based in Houston, Texas. Founded Omaha, Nebraska, United States (1985) Kenneth Lay: Chairman, and Chief executive officer

It was one of the world's major electricity, natural gas, communications, and pulp and paper companies, with claimed revenues of nearly $101 billion during 2000.

At the end of 2001, it was revealed that its reported financial condition was sustained substantially by an institutionalized, systematic, and creatively planned accounting fraud, known since as the Enron scandal.

As was later discovered, many of Enron's recorded assets and profits were inflated or even wholly fraudulent and nonexistent. fraudulent records was during 1999 when Enron promised to repay Merrill Lynch & Co's investment with interest in order to show profit on its books. Debts and losses were put into entities formed "offshore" that were not included in the company's financial statements,

ISSUES
The reward system within the organization was also changed. (opportunity to receive many bonuses and stocks)

This new system was to be controlled by an internal controlling authority.

the people who were reviewing and those who were being reviewed were working on the same levels and this caused them to form alliances among themselves. They all looked out for each other and were not honest with their reviews, and everyone was given good reviews. finally they all became yes men.

Division of Workers and Executives

Enrons earlier organizational structure based on constructivism. But the new system failed because it gave too much authority to the new and young managers. This culture led to socialization being rare and mentoring being nonexistent.

Social Implications
Many of them to act as entrepreneurs as well as intrapreneurs. The hierarchy was also dissolved within the organization and the junior manager had just the same powers as a senior manager.

Rather than being constructive, Enrons organizational culture can be described as being aggressive-defensive.

Conclusion
Things should have been handled differently at Enron. The employees should have been encouraged them to interact with others and to work on tasks and projects in ways that will assist them in satisfying their needs to grow and develop. The employees should have been encouraged to gain enjoyment from their work, develop themselves, and take on new and interesting activities. They would also be motivated to work not only to make huge bonuses and impress the senior authority but would also have worked for the betterment of the company.

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