MGT 3354 Case 20 – Enron
This discussion deals with Enron Read the Case Study, then reflect on the following Case Study Questions:
- How did the corporate culture at Enron contribute to its bankruptcy?
- What role did the CFO play in creating the problems that led to the now-defunct company?
Instructions
- Read the textbook’s Case 20 – Enron
- Post Initial thoughts regarding Unit 4 Discussion questions, due by Friday night at 11:59 p.m.
- Post Response due by Sunday night at 11:59 p.m.
MGT 3354 Case 20 – Enron Answer
- How did the corporate culture at Enron contribute to its bankruptcy?
The corporate culture at Enron was described as “arrogant.” There was even a large banner in the lobby at corporate headquarters that proclaimed Enron as “The World’s Leading Company” and Enron executives believed that competitors had no chance against it. The company’s CEO, Jeffrey Skilling, even went so far to tell the utility executives at a conference that he was going to “eat their lunch” (Ferrell et al., 2019, p. 575). His favorite book was Richard Dawkins’s The Selfish Gene, which was an indication that he viewed ruthless competition as a way to get ahead. They believed that their employees could handle increased risk without danger. Enron’s corporate culture also reportedly encouraged flouting the rules in pursuit of profit. Also, Enron’s executive compensation plans seemed less concerned with generating profits for shareholders than with enriching officer wealth.
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