Examining a Bussiness Failure - Research Paper Example

The present study would try to analyse the organizational behaviour aspects that could be interrelated with the company’s failure in the recent years. This would include an analysis of the aspects of management, leadership as well as organizational structure towards the unfolding crisis that occurred in the organization. Leadership Leadership is perhaps one of the main drivers of a business. A business essentially thrives on the aspect of the vision of the leader of the organization. One of the main reasons for the crisis situation at Enron can be held accountable to the improper leadership of the organization.

The lack of proper vision of the company’s leadership can be traced to the fact that its CEO Jeffrey Skilling resigned from the company that was just beginning to see the light of the crisis situation. Another interesting fact was that the CEO while putting down his papers did not cite reasons for resignation which reflected the negative mindset and lack of leadership skills of the leader of the organization (Jickling, 2002, p.2). An effective leader in this case could have saved the organization from the crisis that has led to the eventual downfall of the company.

An effective leader should have realised the malpractices in the company and should have taken corrective measures and should have displayed visionary traits that could have saved the organization. The role theory of leadership states that leaders must act in a manner so as to set goals for others (Changing Minds.org, 2011). The case at Enron reflects a bad picture as the leader displayed complete lack of responsibilities as he left the firm when it was in the midst of a severe crisis and set a very bad role example.

Management The management of an organization comprises of the top management board including the top shareholders and the top executive management of the company. The poor state of management of the organization can be easily identified from its actions as the top management reflected its existence only on paper. The management indulged in corrupt malpractices that ultimately led to the downfall of the organization (Worldlink, 2007, p.2). The top management of the organization defected from its basic responsibility of ensuring compliance in corporate management in an attempt to protect the interests of the existing shareholders of the firm.

The top management showed a complete mismanagement as it allowed the CFO of the organization to allow him to do private based partnerships for undertaking business with the organization that was largely against the basic rules of corporate governance. The management of the organization was largely selected through internal preferences where the executive management had a final say. Independent directors largely acted as puppets of the top management of the organization that largely defeated the basic purpose of having independent directors on the board of an organization.

Enron should have followed the corporate governance ethics and the management should not have been allowed to have a say on the appointment of independent directors. If the company had adopted a democratic and impartial selection of the independent directors, then the malpractices would have been identified long before and would have