The Role and Responsibility of Company Leadership in Shaping Organizational Culture

1712 Words 7 Pages
According to (Organic Workspaces, n. d) an organization’s culture refers to the observable, powerful forces in any organization, usually constituted by the employees’ shared values, beliefs, symbols, and behaviors. The organizational culture ideally influences its decisions and actions (Tharp, n. d). (Watkins, 2013) also defines organizational culture as a consistent and observable pattern of behavior in organizations. An organization’s culture channelizes individual decisions and actions at a subconscious level, and thus, can have a potent effect on an organization’s success. Organizational cultures facilitate the existence of a common ground for all stakeholders, particularly the employees and managers in addressing various issues within …show more content…
Business ethics underscore the desire to strike a balance to service all groups that have an impact on, or are impacted by the company’s decisions and actions (Gruble, 2011). Among Enron’s business ethics requirements, was the need to follow the comprehensive, state of the art and award winning management control and governance systems (Free, Macintosh & Stein, 2007).
The successful implementation of management controls and corporate governance largely depends on an organization’s culture and top leadership. Jeffrey Skilling was required as the CEO of Enron to provide direction and leadership with regards following the management controls and corporate governance systems to the latter. He, however, did the opposite by permeating these very systems and controls by creating enabling conditions that allowed for fraud to occur.
According to (Free, Macintosh & Stein, 2007)’s fraud triangle, Skilling successfully permeated the controls by providing employees and managers alike with reasons to commit fraud, by setting overly unrealistic and unattainable performance targets; He further provided an opportunity for fraud to be committed by enfeebling the internal controls through his actions and performance expectations; and finally, he finally instilled an attitude among managers and employees alike to want to justify fraud. Skilling managed to use his leadership position to overturn the entire Enron culture and management controls thus setting the stage for