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In this week’s assignment, we are asked to compare and contrast the executive leadership of Enron with the non-management of Enron in light of self-leadership.
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We are also asked to address how Enron’s corporate culture promoted unethical decisions and actions. We are then asked what personal lessons that I learned from reading the Enron Case Study which will mold my self-leadership.
The published key values of Enron were respect, integrity, communications, and excellence. Unfortunately, these values and policies had nothing to do with how Enron executives actually operated their company.
They ran their company using personal greed, fear, and intimidation and demonstrated that they had no business or personal integrity in their life or their business. We explored the downfall of Enron and the executives that were behind its collapse. The stated key values of the company had nothing to do with how the company was actually operated. The lessons learned from this Case Study, are that executives should ensure respect and integrity are foundations of their companies, and institutions of higher learning who are putting out these college graduates, future executives, ensure that ethics plays a larger part in their academic programs.
In this week’s assignment, we are asked to compare and contrast the executive leadership of Enron with the non-management of Enron in light of self-leadership. We are also asked to address how Enron’s corporate culture promoted unethical decisions and actions. We are then asked what personal lessons that I learned from reading the Enron Case Study which will mold my self-leadership. The published key values of Enron were respect, integrity, communications, and excellence. Unfortunately, these values and policies had nothing to do with how Enron executives actually operated their company. They ran their company using personal greed, fear, and intimidation and demonstrated that they had no business or personal integrity in their life or their business.
The many corporate corruption scandals that followed the collapse of Enron only served to hide the importance of Enron’s moral failure. The Enron collapse in 2001 was based mainly on the unethical practices exercised by their executives. Enron’s failures, which ultimately led to their collapse, stemmed from the shady business practices which were designed to keep debt off their balance sheets and helped bolster their share prices. This unethical method of doing business made them very attractive to the stock exchange, but when the stock prices began to fall, the executives were unable to keep the facade going. These corporate executives abused their power, utilized excess privilege, were deceitful in their true value (Johnson, 2003).
The biggest abuses of power were exercised primarily by the founder of the company, Kenneth Lay and his replacement Jeffrey Skilling (Johnson, 2003). The position of vice-president of the company was removed from their position frequently whenever they questioned or threatened the power exercised by Kenneth Lay. Jeffrey Skilling frequently eliminated opponents and intimidated his subordinates. Because of this open and unashamed abuse of power and intimidation, other members of the management staff were too fearful to exercise their management responsibilities. The result was that lower managers did not understand what their employees were doing or how the business was operated. Board members, who Kenneth Lay and Jeffrey Skilling answered to, failed to exercise proper oversight and rarely challenged their management decisions (The Role of the Board of Directors in Enron's Colapse, 2002).
There were many examples of excess privileges that were commonly exercised by the top management at Enron. For example, Kenneth Lay, who began life modestly, gave his wife Linda a $2 million decorating budget for a new home in Houston (Gruley & Smith, 2002). The couple borrowed $75 million from the firm that they repaid in stock, which was not worth the paper it was written on. When the company came crashing down, Mr. and Mrs. Lay owned over 20 properties worth over $30 million (Johnson, 2003).
The executives at Enron treated their employees and upper management with blatant inconsistency. The average Enron worker was coerced into investing their retirement plans in Enron stock and then when the stocks were about to fail, were prevented from selling their shares. While at the same time, top executives, were able to sell off their shares as they wished. Once the company failed, laid-off workers received only a portion of the severance pay they had been promised, while five-hundred officials received severance bonuses totaling $55 million (Barreveld, 2002).
A common practice utilized in order to keep the employees fearful of questioning the unethical and or illegal practices of the leadership was a practice referred to as the “rank and yank” evaluation system. Every six months, the employees who were ranked in the lowest fifteen percent, had just a few weeks to find another position in the company or be terminated (Johnson, 2003). Then the workers who were ranked just above the lowest fifteen percent were put on notice that they were in danger of being let go during the next review. This practice frightened the staff to the point that they were to frightened to question anything out of fear of being ranked low and let go (Johnson, 2003).
Craig Johnson, the author of “Enron’s Ethical Collapse: Lessons for Leadership Educators” lays part of the blame at the feet of college professors and academic programs. According to Johnson, ethics is taught in business programs more as an afterthought or introduced at the end of a course or book. It is his belief that ethics instead should be the foundation on which every college business program should be built and every student should be taught to hold their ethical standards to the highest standards. College educators must help their students to understand and equip them with the values, principles, and skills they need to make moral choices (Johnson, 2003).
The most ethical leaders are driven by altruism, communitarianism or servant leadership. Leaders who pursue altruism are driven by organizational goals rather than personal achievements or personal rewards. In other words, I am a successful leader in my business and employees are successful. Success is not measured in my success. These leaders are more likely to give power away. Leaders who are communitarian, emphasizes individual and corporate responsibility. Citizens and institutions have the obligation and responsibility to the larger community. Servant leadership puts the needs of the subordinates first. These leaders seek to treat others fairly and recognize they have responsibility for their care and success.
On my journey down my own path to leadership, I have learned my code of ethics from the Seven Core Army Values. In the Army, we are all taught the words Loyalty, Duty, Respect, Selfless Service, Honor, Integrity, and Personal Courage (LDRSHIP) (Living the Army Values, 2019). These values are drilled into each and every soldier during their Basic Combat Training (BCT). I have tried to live these values for the last thirty-four years of my military career. Of the Seven Core Army Values, the two that I find most relevant in this assignment are Selfless Service and Integrity.
Selfless Service, in my opinion, is the greatest of the seven core values. This is where you always put the welfare of the nation, the Army and your fellow soldiers before your own. Selfless service is greater than any one person. The foundation of selfless service is the commitment of every member of the team to go further, endure more and add to the success of the team’s mission. There is a concept, more of an unwritten rule, that no Non-Commissioned Officer will ever eat before the soldiers who are under them. I enforce this rule with everything that I do.
Being the First Sergeant, only the Commander of the Unit is over me, therefore I am always the last to eat. Over the last several years, I have chosen not to eat at all, but allow food to remain for my soldiers in case they are hungry and want seconds. This has sometimes been joked about because I get asked if I have eaten anything in weeks because they never see me eat. I think it adds to the mystique of being a First Sergeant, but one thing that I have never been questioned on is, my soldiers always come first.
The second core value applicable is Integrity. That is the concept of doing what is right, legally, morally and when anyone is looking or not. Integrity is adhering to your moral principles. As their understanding of your integrity grows, so does the trust that others place in you. Integrity is something that is very difficult to establish with others, but it is very easily destroyed. You should always try and live your life where no one ever calls your integrity into question. I will always do my best to uphold and live up to the first line on the Non-Commission Officer Creed which states, “No one is more professional than I. I am a noncommissioned officer, a leader of Soldiers”.
In conclusion, in this week’s assignment, we explored the downfall of Enron and the executives that were behind its collapse. The stated key values of the company were respect, integrity, communications, and excellence. Unfortunately, these values and policies had nothing to do with how Enron executives truly operated their company. They ran their company using personal greed, fear and demonstrated that they had no business or personal integrity in their life or their business. The lessons learned from this Case Study, are that executives should ensure respect and integrity are foundations of their companies, and institutions of higher learning who are putting out these college graduates, future executives, ensure that ethics plays a larger part in their academic programs.
What Does Selfless Service and Other Seven Core Army Values Mean To Me. (2024, Feb 26). Retrieved from https://studymoose.com/what-does-selfless-service-and-other-seven-core-army-values-mean-to-me-essay
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