The Leadership Styles Of The Executive Staff

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“Was Enron the Work of a Few Bad Men or Dark Shadow of the American Dream?” In August 2000, Enron, an American energy corporation, stock had reached a high of $90.75 per share. However, by November 2001, the price had plummeted to less than a dollar amidst the collapse of one of analysts’ most highly recommended investments. On December 2, 2001, Enron became the largest American corporate bankruptcy to date. The company was deceptive, even fooling Fortune Magazine into naming it “America’s Most Innovative Company” for six consecutive years. The leadership styles of the executive staff fostered a cutthroat and unethical business subculture for the climate which inevitably led to Enron’s demise. Two of Enron’s fearless leaders…show more content…
They were skilled communicators who developed a comprehensive and captivating vision for their company. They had referent power; their employees, stock analysts, and shareholders trusted them. Analysts were blinded by the company’s fraudulent practices because they took the financial statements from the management on faith. In “Enron: The Smartest Guys in the Room,” Amanda Martin, a top executive at the company, described Skilling saying, “Jeff was like the prophet. He came in and said there 's a whole new world out there...The excitement was palpable. You cannot imagine how proud we all were to be there, and then, of course, we had a leader who imbued us with a sense of confidence.” Skilling controlled his employees using rational persuasion and inspirational appeals. He used logic but also appealed to their values, further blurring the line between the achievements of employees and the subsequent success of Enron. Skilling and Lay were clearly charismatic leaders but it was their lack of other leadership skills, including altruism and integrity, that exposed the dark potential of charismatic leaders. Lay and Skilling also were transactional leaders, “leaders who guide or motivate their followers in the direction of established goals by clarifying role and task requirements” (TB). They implemented strict work schedules to ensure that each employee was maximizing
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