The Enron Of Enron's Bankruptcy

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The story of Enron’s bankruptcy, an US company that provided products and services related to natural gas, electricity and communications has been one of the most serious cases of unethical practices in the American economy. The company directors in association with their accountants and lawyers created subsidiaries in order to generated false earnings, avoid taxes, inflated assets and hide losses. Finally in 2001 the company lost the credibility in the market and the scandal was exposed affecting thousands of employees and investors. (Tonge, Greer, & Lawton, 2003) This case is an example of how leadership can influence in the development of a company or as the contrary in its decline. Also how a leader can abuse of his power to influenced and manipulated his followers in order to obtain only his own benefit. This essay shows an analysis of Enron story related to leadership, identifying the problems, theories applied and giving recommendations and solutions in order to avoid this kind of issues in other companies. Enron is one of the biggest failures of the world of business history of US and its failure was caused by the application of an incorrect leadership philosophy. According to Northouse (2013), leadership can be defined as the process influenced for an individual called “Leader” where a group called “followers” is involved to achieve a common goal. In Enron Company the leaders should follow the leadership’s philosophy, trough the promotion of ethical behaviour

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