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You will complete 2 Case Assignments from Business Ethics: Ethical Decision Making and Cases
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Running head: ENRON’S CORPORATE CULTURE
Enron’s Corporate Culture
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ENRON’S CORPORATE CULTURE
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How did the corporate culture of Enron contribute to its bankruptcy?
The corporate culture of Enron company consisted of a high level of aggressiveness
and arrogance; however, the company was not like that initially. Enron was formed after a
merge of InterNorth Corporation and the Houston Natural Gas in 1985. After the merger,
Willis Straus was the acting chairman with a positive attitude and loved by all the employees.
Straus was free with the employees and engaged freely with them. Straus successor was Sam
Segnar who happened to be arrogant and full of pride unlike the past chairman(Ferrell,2017).
Therefore, Enron quickly went from a company with a strong corporate culture to one where
titles were everything.
Enron’s culture supported unethical employee’s treatment without any question as
long as there was monetary gain. After the merger of the companies, the board of directors of
both firms were combined with Kenneth Lay as the board chairman. Kenneth Lay had a
positive work attitude which was not adhered to by his successor Jeff Skilling. Skilling
introduced the “rank and yank system” by bringing workers’ reviews every half yearly with
the lower 20% forced out of a job(Ferrell,2017). The corporate culture recognised
innovations and punished those deemed as week rather than advocating for moral values of
integrity and respect.
The rank and yank system created a hostile work environment which eventually led to
the cover-up of many wrong decisions. The employees abandoned the company’s values and
visions and were focused on competition among each other(Dibra,2010). Kenneth Lay was a
strong advocate of a conducive work environment consisting of integrity, respect and
excellence. However, his successor made the corporate culture to be one of punishment rather
than appreciation.
The cut-throat c...