Enron: The Smartest Guys in the Room Organizational Movie Paper
Enron Corporation’s failure in the year of 2001 has become a depiction of unethical corporate behavior for years to come. After having watched Enron: The Smartest Guys in the Room; I found many organizational communications course concepts could be brought to our attention within the documentary. To further our understanding, I will offer my insight as to how class-related concepts connect with the documentary by discussing how Enron developed strong organizational values by identifying certain heroes and their stories that developed their sense of strong risk taking as well as discussing Enron’s “rank and yank” system that can be asserted with F.W. Taylor’s work within
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Although Miller (2014) includes all four key components, I am going to focus attention on the first two,
1. Values are the beliefs and visions that members hold for an organization.
2. Heroes are the individuals who come to exemplify an organization’s values. These heroes become known through the stories and myths of an organization.
This theory can be described as a way in which organizational members collectively interpret the organizational world around them in order to define the importance of the organizational happenings. Upon watching the documentary, one could conclude that Enron’s bosses created a culture of pushing limits and taking risks. From the movie, we understand that Jeff Skilling was known to be a nerd as well as others within Enron. It seemed as though Jeff had woken up one day and decided to change himself by wearing contacts instead of glasses, changing is wardrobe, and doing some modeling. As he changed, so did others who worked under him for the fact that they saw Skilling as their hero. With time, it has been noted that Jeff became some sort of tragic figure. He became a man who was radically different than how he portrays himself. It was known that Skilling was a huge risk taker and he often talked about, and then started to manifest in trips that he began to lead with small groups and customers that were often times dangerous. These
Before going into an analysis on the organizational culture at Enron, I will first elaborate on the severity of the unethical behavior that existed at Enron. The problem can best be shown in the words of an Enron employee who said “If I’m going to my boss’s office to talk about compensation, and if I step on some guy’s throat and that doubles it, then I’ll stomp on that guy’s throat”(Enron: The Smartest Guys in the Room). This culture of greed and corruption can also be seen through Enron’s mark to market accounting system, in which Enron cashed in on ideas and “future profits” without actually making anything. Furthermore,
They were skilled communicators who developed a comprehensive and captivating vision for their company. They had referent power; their employees, stock analysts, and shareholders trusted them. Analysts were blinded by the company’s fraudulent practices because they took the financial statements from the management on faith. In “Enron: The Smartest Guys in the Room,” Amanda Martin, a top executive at the company, described Skilling saying, “Jeff was like the prophet. He came in and said there 's a whole new world out there...The excitement was palpable. You cannot imagine how proud we all were to be there, and then, of course, we had a leader who imbued us with a sense of confidence.” Skilling controlled his employees using rational persuasion and inspirational appeals. He used logic but also appealed to their values, further blurring the line between the achievements of employees and the subsequent success of Enron. Skilling and Lay were clearly charismatic leaders but it was their lack of other leadership skills, including altruism and integrity, that exposed the dark potential of charismatic leaders.
In its wake, Enron’s CEO, Ken Lay, wanted Enron to be a company which cultivated a culture that allowed employees the opportunity to reach their full potential. Lay wanted to make Enron a company that had high integrity and moral values, but as time progressed Enron became a company which pushed its integrity aside to engage in fraudulent behavior so that the executives could earn more profit (Ferrell, p. 487). Enron’s corporate culture would be best described as very proud and arrogant. The company even displayed a banner in their lobby which stated, “The
Heroes do what's right, even if they put themselves in danger. For example, in everyday life, people like firemen, paramedics and soldiers risk their lives for the common people every day. Heroes are willing to give something up for the greater good of others.
This now bankrupt company, misappropriated investments, pension funds, stock options and saving plans after deregulation and little oversight by the federal government. However, with deregulation an increasing competitive culture emerged as the CEO Jeffry Skilling motto to his organization was to “do it right, do it now, and do it better” this was the rally cried that pushed ambitious employees to engage in unethical behavior as Enron use deceptive “accounting methods to maintain its investment grade status” (Sims, & Brinkmann, 2003, pp.244-245). As Enron continued to flourish and received accolades from the business community this recognition drove executives to continue the façade of bending ethical guidelines before their public fall from
Heroes are selfless and go out of their way to save other people. For example, teachers who spend their lives educating students so the
A hero is somebody who inflicts an unforgettable act of positivity, either for their community or towards the world. Heroes require certain qualities that will cause them to be their very best. These qualities include extreme willpower, durability, and independence. Although many people think it’s difficult being a hero, there have been many ordinary men and women throughout history that have influenced the society we live in today. The people chosen are leaders not just in America, but around the globe.
As with much of Enron, their outward appearance did not match what was really going on inside the company. Enron ended up cultivating their own demise for bankruptcy by how they ran their company. This corrupt corporate culture was a place whose employees threw ethical responsibility to the wind if it meant financial gain. At Enron, the employees were motivated by a very “cut-throat” culture. If an employee didn’t perform well enough, they would simply be replaced by someone who could. “The company’s culture had profound effects on the ethics of its employees” (Sims, pg.243). Like a parent to their children, when the executives of a company pursue unethical financial means, it sets a certain tone for their employees and even the market of the company. As mentioned before, Enron had a very “cut-throat” attitude in regards to their employees. This also became one Enron’s main ethical falling points. According to the class text, “employees were rated every six months, with those ranked in the bottom 20 percent forced to leave” (Ferrell, 2017, pg. 287). This system which pits employees against each other rather than having them work together will create a workplace of dishonesty and a recipe of disaster for the company. This coupled with the objective of financial growth, creates a very dim opportunity for any ethical culture. “The entire cultural framework of Enron not only allowed unethical behavior to flourish,
On the superficial level, the attitudes and motives behind the events and decisions causing eventual downfall seem simple enough: collective and individual greed created in the atmosphere of corporate arrogance. As Enron's reputation in the global environment grew, the internal culture of the organization began to worsen significantly. Skilling, Enron Chief Executive, founded the Performance Review Committee, PRC, which gained the reputation of the harshest employee-ranking system in the whole country. Theoretically, this review system was based on the values of Enron - respect, integrity, communication and excellence (RICE). But at the end of the
LJM1 ignored some of Enron’s entries in the books that were missing. Outsiders owned less than 3% of the Special Purpose Entities equities. There was an error made by Arthur Andersen to let LJM’s financial statement to remain unconsolidated. If the financial statements had been consolidated, some of the errors could have been found. They may have even had some time to correct these errors before that had gotten so far out of control. There was not governing controls in place and fraudulent activities were unlimited. Andrew Fastow created LJM1 to handle investments with Rhythms NetConnections, high-speed Internet service provider. The stock that they bought at $10
I was first introduced to the world of business through a book called Pipe Dreams: Greed, Ego, and the Death of Enron. At the time, though I had difficulty understanding all the complicated underlying causes for the energy giant’s collapse, I was struck by the fact that Arthur Andersen, Enron’s auditor, failed to fulfill their obligations to conduct proper audits, and ultimately lost their CPA licenses. This made me interested in the role of auditors and the reasons behind their significant—though not always positive—influence. It also motivated me to learn accountancy at the University of Hong Kong upon graduating from high school.
The corporate culture in Enron was poor, and had a direct influence on its management acting unethical. Enron’s destruction will be looked at through the lens of consequentialist, deontological and virtue ethical frameworks. The main point of reference for this essay is the documentary “Enron: The Smartest Guys in the Room”. In a Consequentialist ethical framework, decisions are made based on the results or punishments outweighing the costs (MAGILL 2017).
Enron was an educational production about the infamous business scandal of the American energy corporation. Enron was originally written by Lucy Prebble, directed by Rodney Lee Rodgers, and produced by the College of Charleston’s Department of Theatre and Dance. An interesting story enfolds about the tremendous scandal during the 2000’s which led to the inevitable downfall of the company and leader, Jeffery Skilling. Rodgers emphasized the corruption of money and the plummet of a once powerful man, Jeffery Skilling, Enron required some level of knowledge about the historical scandal and the stock market. The audience endured three hours of this business production. With little knowledge or interest in business and corporations, I personally struggled to connect with the cast and stay in touch with the plot because of the many distractions dancing about the stage. However, the acting, set design, and the direction produced a wonderful, informative production.
A hero is someone who is looked up to for their admirable qualities. Heroes come in all different shapes and sizes and we all have them, whether they are police officers, firefighters, soldiers, or even family members. When we were little, our idea of a hero was a bit different, we tended to look up to fictional superheroes such as superman, batman, and the x-men. We all loved to see them kick their enemies’ butts episode after episode or page after page in a comic book. These individuals were great inspirations to kids all around the world. But many of us forget, that not all heroes work alone, some work as a group.
Research has shown that companies with poor financial performance and financial uncertainty are more likely to commit illegal acts (Lawrence & Weber 77). After several unsuccessful attempts to make a profit through spending billions of dollars building a power plant in India and entering the bandwidth market, Enron aggregated a debt of 30 billion (Enron: The Smartest Guys in the Room). Under high pressure to generate profit and keep the stock price up, Enron controlled the power they supplied to California residents. Enron reduced the power supply by exporting supply to other states. Consequently, electricity prices were driven up, forcing Californians to pay more. Moreover, traders at Enron realized that by simply shutting down some of Enron's