Examining_Business_Failure_Paper

Examining Business Failure Paper University of Phoenix Professor: Diana Avery LDR531 March 17, 2010   Enron Enron Corporation a well known energy company based in Texas, the seventh largest company in America valued at over 2,500 million dollars goes down. Which started out as a small company with ethical values and beliefs suddenly loses it edge. Scandals linking crooked accounting procedures lead to this failure. Enron’s fall in value transpired after it was exposed that many of its revenue and profits were the outcome of deals made with limited partnerships which was controlled by the company. Enron was hiding its losses from the public by not reporting them in its financial statements. Enrons’ officials at this point had taken its eye off the purpose of operation and begun focusing on becoming the best energy company to exist. Enron would become part of the largest company fraud ever. Officials of Enron not only participated in the fraud of the company but encouraged its employees to go along with the scam. Executive and others would receive bonuses equivalent to base salary and above. Owners and all additional staff had the options of purchasing shares of the company at a lesser price than normal. Organizational Behavior, Leadership, Management, and Organizational Structure Organizational Behavior (OB) is the study and knowledge of how people in a group and as individuals act within an organization. According to Robbins and Judge “OB includes the core topics of motivation, leader behavior and power, interpersonal communication, group structure and processes, learning, attitude development and perception, change processes, conflict, work design, and work stress” (Robbins and Judge). Such behavior identifies the ways in which people operate in relation to the effectiveness of the business. Managers must realize that its employees play an important part in what gets done within the organization. Employees’s watch and learn the behavior of those in charge. Unfortunately everyone’s behavior is not helpful to the company. An organizations culture is made up of its influential values and beliefs. Its organizational structure as a whole is determined by how effective the leaders and employees function. The behavior of the staff has an enormous impact on the progress and growth of the company. Leadership and business ethics in today’s workplace management is struggling with the idea of whether or not to engage in unethical activities just to make the dollar and appear to be successful or be straight forward and provide the public with the truth regarding its businesses. Padding financial statements with false information or not reporting all financial activities raises red flags and creates trouble. Leadership needs to be aware that such behavior is very harmful to business. Companies operate from top level to bottom level employees and it the top is corrupt then more than likely the whole company is operating corrupt. Enron’s mistake occurred because the leaders of the company wanted to be the best at whatever cost. It did not matter to them that unethical activities would create a downfall. Managers of other companies should take a look at the mistakes made by Enron leadership and learn that no matter what, honesty and operating with ethical standards are the way to profit and success.   References Robbins, S. P., & Judge, T. A. (2007). Organizational Behavior (12th ed), Retrieved March 16, 2010 from eMaterial:www.ecampus.phoenix.edu