Business Failure

1124 words, 5 pages

Intro Sample...


The amounting concerns regarding business scandals within North America affecting major company’s raises a variety of questions, but the one at the forefront in people’s minds is this: Why do intelligent, experienced executives engage in behavior that is inevitably going to cause major embarrassment if it ever comes to public knowledge? It is easy to point to consistent human failures such as greed and egotism, blaming them for the shortcomings in corporate governance. (Savage, 2002) This explanation is too simple. What happened within Enron goes beyond the suspicious actions of a few individuals. It revolves around organizational system failures and handling corporate strategic change, where others within the organization turned a... View More »

Body Sample...



Enron’s culture and management information systems should have been comprised around the issues of risk for reward. Every employee should understand what Enron embraced in order to generate revenue, and those that could cause it to lose money. All of this should be directed towards the key operational areas of the business, rather than focusing on its non-core and support structures. Key performance measures should be identified and monitored, and should be reported on a regular basis. Once the board of directors is satisfied management has identified the key components of opportunity and risk and has developed appropriate key performance measures, the board can move on and focus on strategic business issues. Achievement motivation was clearly an integral issue because it is the value that changes and becomes dysfunctional when not balanced. (Payne, 2002) Other important values are needed to moderate and control the tendency of achievement motivation to assume that the end justifies any means. Uncontrolled achievement drive quickly became obsessive as past company successes were forgotten and only the next win can lessen the hunger to prove better than the next. Continuous compliance by all levels of management would balance corporate initiatives and power, guarantee accurate financial reporting, prevent management fraud, and encourage ethical corporate behavior.
Enron’s corporate governance system failed for many reasons including week or nonexistent internal controls, ineffective oversight by various committees of the BOD, and poor communication. (Whittington ...

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