Casting Shadows at Enron APA Case Study Research Paper Example

Casting Shadows at Enron

"In your opinion, was this a case of greed or just bad business decisions leading to an illegal cover up?"

From the Enron case study on of the attitudes and behaviors I find most offensive is the mismanagement of information by the company’s leaders. For instance, the leaders manipulated information to protect their personal interests and deceived the public. The board and the executive members claimed that they did not know about the company off books partnership and unstable financial standing, but in the real sense, they knew the company was hiding deficits.  Enron’s leaders were warned that the organization’s accounting tactics were suspicious and they continued lying to the investors and public. I find this behavior offensive since the business leaders with held vital information from the investor sand members of the public. The leaders knew that the organization did not have enough outside investors and created special purpose entities allowing the employees the organization’s investments to make money at the expense of the organization. This vital information was withheld from the investors despite its importance to the investors (Johnson, 2011, 36).

         The second offensive behavior from the Enron’s leaders is being irresponsible. The company leaders  acted irresponsibly  by failing to take the needed action after discovering  the organization did not have enough outside  investors. In addition, the company leaders failed to exercise proper oversight and failed to shoulder responsibility for the ethical miscues of the company CEO who overlooked the warnings of the financial improprieties. The leaders were irresponsible despite the fact that they knew that some of the company board members did not understand the organization’s operations. The irresponsibility was also reflected when the company managers who left the employees to their own devices and encouraged them to achieve financial targets by any means (Johnson, 2011, 37).

           In my opinion, the downfall of Enron was just a bad business decision leading to an illegal cover up. According to William Thomas, the downfall of Enron was accelerated by the attitudes and motives of the company decisions makers. The market euphoria and corporate arrogance also played a major role in the company collapsing since the company leaders and employees wanted to believe that the organization was too good to be true (Thomas, 2002, p.1). I strongly believe that the company collapsed because it was losing money and it was losing money for some time. This fact coupled with the wrong decisions made by the employees in charge of the organization investments led to its collapse. The management of the organization played a key role in the company collapse. For instance, Skilling replaced fifteen percent of the workforce every year a strategy that created fierce competition within the workforce and paranoia within the employees. Secrecy was also part of the business and as result, the company employees made some illegal investments against the best interests of the company (Thomas, 2002, p.1).

         I believe the management of the organization led to its collapse because the salaries and stock options received by the company executives were relatively high in relation to the qualities of their performance. The errors made by the management especially by allowing the employees to their own devices led to unjustified overconfidence, which in turn affected the performance of the company. In conclusion, I believe the collapse of Enron was because of bad business decisions coupled with other mistakes within the management and the employees. Individual mistakes especially in the management, corporate arrogance and market euphoria also contributed to the company collapse.


Johnson, C. E. (2012). Meeting the ethical challenges of leadership: Casting light or shadow. Thousand Oaks, Calif: SAGE.

Thomas, C. (2002, April 1). The Rise and Fall of Enron. Retrieved February 26, 2015, from             http://www.journalofaccountancy.com/Issues/2002/Apr/TheRiseAndFallOfEnron.htm


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