The Failed Corporate Culture of Enron

4805 WordsMar 17, 200620 Pages
The Failed Corporate Culture of Enron High risk accounting, inappropriate conflicts of interest, extensive undisclosed off-the-books activity, excessive compensation – these are some of the headings of the report prepared by the U.S. Senate's Permanent Subcommittee on Investigations titled "The Role of the Board of Directors in Enron's Collapse." (Permanent Subcommittee on Investigations, 2002) In February, 2002, Enron's former Chief Executive Officer Jeffery Skilling had testified before members of the Senate Commerce, Science and Transportation Committee that Enron was a financially sound company the day he resigned in August 2001, just months before the company's financial implosion. But the Enron debacle has, as the Houston…show more content…
The winners have been consumers, who have paid lower prices, and investors, who have seen competition force the power suppliers to become much more efficient…. Under the old regulated model of delivering gas and electricity, customers were offered a one-size-fits-all contract…. Enron pioneered contracts that could be tailored to the exact needs of the customer. To do this, Enron unbundled the classic power contract into its constituent parts, starting with price and volume, location, time, etc., and offered customers choices on each one. Again, consumers won. Enron's investors did too, because Enron earned the surplus typically reaped by inventors. Arguably, Enron is the embodiment of what economist Joseph Schumpeter called the "process of Creative Destruction." But creative destroyers are not necessarily likable, pleasant folks, which may be part of Enron's problem today. (Bodily and Bruner, 2001) Skilling has been described as Enron's "chief visionary, head cheerleader, and internal compass," a "brilliant strategist" and creator of the "in-your-face Enron culture." At the same time, many inside the corporation thought him a "terrible manager," "impulsive" and "immature." Touting the value of "intellectual capital" over "solid assets," Skilling sought to imbue the 250 or so young MBAs Enron hired each year with "the belief that they were the best and that they were on a mission to open markets across the globe in the face of entrenched,

More about The Failed Corporate Culture of Enron

Open Document