Enron Scandal Case Study

Introduction:

Due to the complex global business environment, managers and leaders are under higher pressure to ensure effective management of organization. Taking the recent trends into consideration, it is observed that several organizations across the globe have failed, but some companies have clearly enjoyed the success and growth. It is deduced from the research study that the primary reason behind the success and/or failure of any organization purely depends on the management and leadership. Similarly, it is also observed from the past conducted research studies and case studies that since the volume and intensity of issues and threats are increasing, it is becoming more and more difficult for managers to ensure the

managers, shareholders, regulatory bodies and strategic partners, when it filed its bankruptcy in 2001. While reviewing and analyzing the case study of Enron, it is observed that the some of the key executives and board of directors were involved in unethical and illegal business activities such as manipulation of financial statements, expression of false financial information as well as involvements in bribery and biasness. Several research studies have been conducted to analyze the key reasons behind one of the most successful companies at times, and it was concluded that management failure, lack of control and absence of effective leadership were the core reasons. Additionally, it is also realized that ineffective managerial practices, unethical trade practices, managerial fraud in terms of accounting, weak corporate culture and ethics as a whole, are the main factors that led towards the collapse of Enron. From the research it is realized that Enron is the best example of worst managers in the history of corporate world. Within the time span of around 1 year, Enron went to zenith to zero mainly because of faulty and fraudulent practices of business managers, leaders, and unethical business activities. Within the case of Enron, it is realized that every aspect of business failed, that is mainly due to managerial fault that the company faked accountancy and financial statements, faked

in the similar manner, Hill, & McShane, (2008), argued that managers remain the most important asset of the business that drives the business towards path of development and growth. Additionally, the importance of managers, their roles and functions cannot be neglected. As the business environment has become highly competitive with market segments highly fragmented forcing business entities to adopt and integrate effective business practices that can ensure that the business is heading towards the path of competitive advantage. In this regard, it is realized that the role and function of manager has become highly indispensable. The early theory of management, as per stated by Need, (2006), argues that the core functions of manager are to Plan, Organize, Staffing, Leading, and Controlling. Augier, & Teece, (2009), within this regard stated that effective and efficient managers do not just go and perform haphazardly, in fact, good and effective managers discover their strengths, ensure they are making the most out of the existing resources and mastering the above mentioned five basic functions. The overall role of manager is highly significant, mainly because of the fact that manager while performing these five functions guide the entire business and