Unethical Leadership at Enron

Unethical leadership at Enron
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Executive Summary
The essay is about Enron, a telecommunication, and energy company. The company had been performing so well until the senior management initiated unethical business practices. Some of the immoral practices included inflation of profits to earn high bonuses and stealing company assets through imaginary subsidiaries. The essay explains how these practices ruined operations in the organization and how eventually senior management benefited by conning the public to buy shares at inflated prices. The essay criticizes the administration for their actions and recommends better ways they should have used to manage the company. The article further explains how the current management should be restructured to avoid repeating mistakes committed by the former regime. Finally, the essay explains how the trait theory is relevant to the Enron case study on bad ethics in leadership.
Statement of the problem
Poor ethics in leadership is the main problem ailing Enron Company. The problem began when the conflict of interest rule was bent to benefit top leadership of the organization. Senior management sold assets for the organization and made false earnings. Furthermore, the employees reported false profits to earn huge bonuses, and all this contributed to the fall of Enron.
Causes of the problem
The top executives of Enron created subsidiaries and used them to sell assets and gain false earnings in the name of partnerships. Furthermore, the senior management used offshore companies to evade payment of tax, inflate profits and assets and ended up hiding losses incurred by Enron under their leadership (Yukl, 2013). Other problems set in when the executives intentionally initiated risky ventures like Enron online, a web-based business service so that they could buy, sell and trade energy contracts for their sake at the expense of Enron.
The top management also used false financial statements to create the illusion that the company made billions in profits and hence raised share prices to the tune of $90 per share. All these were schemes to enrich the top management at Enron. The failure of Enron also resulted when employees and senior executives collaborated to exaggerate profits to be realized from future earnings so as to earn high bonuses (Yukl, 2013). Approximately 20 percent of employees were laid off annually for failures to cooperate with instructions of raising sales. All these indicate that the failure of Enron as a telecommunication company resulted from unethical practices of the top leadership.
Solutions attempted, and alternatives suggested
When they realized the company was incurring losses, the senior management opted to sell their company stock to new investors in millions of dollars. They did that by deceiving investors that the company shares were going to rise. However, that was not the best action to take. The management ...