Enron Essay

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Integrative Case – The Downfall of Enron

Part I

1.     Ken Lay served as CEO and chairman and Jeffrey Skilling also served as CEO. They both were responsible for planning, organizing, controlling and leading the company. They set goals for the company and organized how they would be achieved. Kay’s role was as the figurehead and the leader. He also served as the spokesperson for the company and made many of the decision on the future of the company. As CEO’s they both possessed effective communication skills, where decisive, which was evidenced by their vision for the company and refusal to admit wrong even at the end, and visionary. Throughout Lay’s tenor the company continued to grow and prosper at a fast
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The downside to this approach was that these individuals were inexperienced and prone to taking large risks.
2.     Enron employees were motivated by vanity and greed. Management used promotions, hefty raises and bonuses to motivate their employees. The focus was placed on meeting financial needs. It was effective in motivating those who were extremely ambitious and did not have concerns for ethical practices but put their focus on earnings and acquiring wealth.
3.     Enron used a 360-degree feedback performance management system (PMS). Performance was directly linked to rewards. The system can be beneficial to managers because it typically gives them a much wider range of performance-related feedback than traditional evaluation provides. The disadvantage to this type of PMS is that if used inappropriately the focus can be placed on individual biases and politics. That is, if an employees peer dislike them, the PMS can be used as a means to hurt that individual. Enron should have more closely managed their PMS so that its focus remained on constructive rather than destructive criticism. Also, they could have removed the link between the PMS and rewards.

Part III – The Leadership

1.     Lay and Skilling can be characterized as highly educated, extraverted, over achievers.

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