Business Failure in Enron

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Business Failure in Enron and The Organizational Behavior Theories That Explain the Company’s Failure
Institutional Affiliation Enron Corporation was one of the world’s top electricity corporations that underwent a financial indignity, which involved Enron and its bookkeeping company. The scandal comprised of the detection of unbalanced accounting techniques, which occurred through the 1990s. This resulted in Enron filing for insolvency in December of 2001 (Thomas, 2002). The aim of this paper is to define how organizational behavior theories could have anticipated or illuminated Enron’s failures.
Organizational behavior, is described as an area of study that explores the influence that groups, individuals, and structure have on performance inside the organizations for the aim of applying such information toward refining an organizations efficiency; precisely organizational behavior concentrates on how to increase output; decrease absenteeism, turnover and unusual workplace conduct; and raise organizational loyalty behavior and job fulfillment (Robbins & Judge, 2007).
The key players of any business are senior management, board of directors, in-house auditors and external auditors. In case of Enron, all the stakeholders were unsuccessful in playing their parts. Enron failure was mainly because of Enron’s managerial team trying to make an enterprise which would raise riches amongst their owners.
Nevertheless, when it was exposed that Enron’s stock prices were less desired, definite aggressive accounting procedures were needed. To make Enron’s shares more favorable, the managerial team depends on an enlarged quantity of new capital, but had to hide the risks to the new financiers. Once Enron started this new type of accounting maneuver, the need to increase this type of dishonesty increased with each financial year. Enron wanted to ensure they kept…...

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