organizational behavior theories

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Specific organizational theories could have explained the company's failure. Let us consider the organizational structure and management of Enron. Before the bureaucratic structure developed, there were flat structures, after that bureaucratic structures developed to increase control. there were vertical structures where there was high level of control and according to theories the organizational circle is moving back to flat structure. In Enron Corporation, internally it had such a highly decentralized financial control and decision making structure that made it impossible to get a clear view on the corporations' operations and activities. Along with a "decentralized" structure came a lack of corporate culture, lack of clear accountability, and lack of transparency.

Let us consider another theory, a management theory, the survival of a company depends on its capability to focus and shape its operational resources to meet the expectations of its customers. However, in case of Enron it had an operations management department which setup accounts, notified utilities, got agency agreements from customers, verified the format of invoice, setup invoice data transfer, determine the reporting requirements of the customer and so on. This 'operations management' was bound to fail.

Let us examine Enron failure from the perspective of Leadership theories. The relevant Leadership Theory to Enron was the "Great Man" Theory. Kenneth Law had the capacity for leadership, it was inherent. He was a born leader and not made. There were stockholders that believed that he was heroic, mythic and destined to rise, to great leadership when needed. Instead, he lied and deceived and this cost 4,000 people their jobs and scores of people their investments. Had there been a participative ...