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Business - Enron

1. How did the corporate culture of Enron contribute to its bankruptcy?
2. Did Enron's bankers, auditors, and attorneys contribute to Enron's demise? If so, what was their contribution?
3. What role did the CFO play in creating the problems that led to Enron's financial problems?

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RESPONSE:

1. How did the corporate culture of Enron contribute to its bankruptcy?

Reports suggest that Enron was similar to the TV show called "Dallas." In other words, Enron's culture was "devoid of institutional morality or oversight" (http://www.newsbatch.com/corp.htm). It was decnetalized with no one knowing what the other department was doing. This contributed to a closed system of communication, with all decisions made at the top and not being questioned. At Enron, for example, it is reported that "expense reports were routinely approved without a thorough review." (http://www.newsbatch.com/corp.htm) This corporate culture allowed unscrupulous employees to act unilaterally in contributing to Enron's bankruptcy and its financial collapse. Upper management was to blame "for the absence of corporate culture, clear accountability and transparence of the company." (http://www.newsbatch.com/corp.htm)

The CEO played a large role in this type of corproate culture. For example, once a banker, Skilling (CEO) was reported as being "a brilliant and unconventional executive known for exotic "adventure" vacations. He had a decisive and uncompassionate leadership style which rewarded economic achievement over conventionality and ...

Solution Summary

By addressing the questions, this solution discusses aspects of Enron. References are included.

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