Why Enron Fell: Businesses Need More Than Passion and Innovation to Succeed

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Reading The Enron Collapse case study seem more to me like reading the script of a horror movie. In the horror movies, you knew that once the kid entered the dark house in the wood, something terrible was certain to happen. Same with Enron. It was obvious that the collapse was imminent; however, the reviewer could miss the point on what really went wrong if they failed to pay attention to the subtle failings of the culture at Enron.

Enron Kenneth Lay, the premier CEO of Enron was a man of vision, passion, and courage. He was definitely innovative and adventurous. He had an eye for talent. His COO, Richard Kinder was also a man of great business insights and share many admirable qualities of Lay. Jeffery Skilling and the other staff members mentioned in the case were depicted as brilliant minds. They were aggressive, focused and not shy of exploring. The Achilles Heel at Enron was the lack of integrity.

The case study helps the reviewer understand that although passion is a required driving force to start a business and make it successful. Integrity and innovation; however, are the forces required to keep the business growing and going. While passion and innovation were present at Enron, integrity was missing. And this was the ultimate cause of Enron’s collapse. If I were given an opportunity to step in the case at Enron before it exploded, one of the things I would change was to introduce accountability, collaboration, and truthfulness into the company’s culture.

Lack of accountability at Enron created a free for all. Associated were encouraged to doctor business reports to mislead investors. Lack of collaboration created many weak links in the form of associates who soon realized they were not required to protect the image of the company. Truthfulness, where absent at Enron caused the management to dismiss the inevitable disastrous outcome of reckless business practices. These changes could have saved Enron from tanking.

In line with the submissions by the discussants in the online report, “What Really Went Wrong with Enron? A Culture of Evil?”, there are different angles to look at the result of the fall of Enron. However, one could link all those views into one of the most precise perspectives offered in the Bible in James 1: 14-15:

This statement summarizes the train of events leading to the fall of Enron.

Comments (2)

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