Organizational Culture and Ethics Essay Example | Topics and Well Written Essays - 1750 words

Organizational Culture and Ethics - Essay Example Critically evaluate this case in the context of the organization’s culture. How were Enron's business ethics and business operations influenced by the organization’s culture? Specifically, what went wrong? The company, i.e. Enron, experienced a sharp decline which ultimately resulted in its collapse. Senior executives of Enron, namely Kenneth Lay, Jeffrey Skilling and Andrew Fastow, were repeatedly found to appear in the cover story of various business magazines. Kenneth Lay was the earliest Chief Executive Officer (CEO) of Enron who was quite well known for introducing an effective innovative structure in Enron, which helped it to survive in the initial years (Scribd Inc., 2012). The visitors entering the head office of the company situated at Smith Street in downtown Houston often were attracted by a striking poster in front of the office. The banner related to the company’s R.I.C.E principle, i.e. Respect, Integrity, Communication and Excellence. It was often believed by the visitors that the principles of the company reflected its corporate culture. However, in reality Enron hardly shared any association with the stated principles. In 1985, Enron was formed by the merger of two natural gas companies situated in Houston. This union was mainly debt-financed, which implies that Enron initiated its corporate life with a large amount of debt. Therefore, from the beginning, Enron was considered as a company which exemplified high risk. Enron operated under high business risks which were mainly encountered from the highly competitive and deregulated natural gas market. Subsequently, the company also witnessed a high financial risk owing to the merger which was persuaded by heavy debt loads (Macmillan, 2005). The business functions of Enron were operated by freshly hired business management graduates from the leading business schools of the United States. These skilled employees promised the company instant earning of profits as well as carried out the business under advanced form of operations. The Performance Review Committee (PRC) developed and sustained Enron’s corporate culture (Scribd Inc., 2012). Enron Corporation was a leading American energy company situated in Houston, Texas. The company operated with 21,000 workers and was one of the largest international providers of natural gas, electricity, pulp & paper along with communication. Enron performed quite well in the market and earned $110.9 million in 2000. The company enjoyed a high value or price for its shares along with gaining an effective position in the market. The various workers and staff of the company were quite satisfied and it was also found that qualified and skilled individuals preferred to work with Enron. Enron earned a higher degree of success which further gave rise to grave issues within the organizational operations. Enron made the decision of transforming their organizational structure by recruiting new employees in the higher positi ons, who were entitled to make big decisions regarding the company’s business operations, which entailed the chances of directly