Unit 2 Discussion board - Essay Example

Introduction In its essence, power is the ability of the person to influence another and is considered as just not limited to the top leadership of the organization but at almost every level within the organization from line managers to the most senior persons in the organization. However there is a subtle difference between the power and authority as power is not authority as authority means the vesting of powers in one position or person neither power is considered as influence as someone without having the authority or power can influence others.

The power cycle within an organization comprises of these three elements of power, authority and influence. In this assignment, I am going to discuss about the episode of Enron Company and how their leadership used power to commit one of the heinous corporate crimes in the history of the world besides discussing some of the ethical lapses being committed by the organizational of Enron as well as political leadership of the United States of America.ENRON and Power CorruptionThe ENRON scandal started as an accounting scandal however behind there is a whole story of power corruption and misuse of resources and powers to conceal and misrepresent the facts.

It was discovered that irregular accounting practices which can easily be characterized as fraud were adopted in order to cover up the declining performance of Enron throughout the 1990’s decade. The major players involved in this whole fraudulent activity included not only the top management of the Enron specially Mr. Kenneth Lay, the CEO of the company and Mr. Jeffery Skilling but major role was also played by Enron’s auditors i.e. Arthur Anderson. The creative accounting behind this whole episode was crafted by opening special purpose entities or limited partnerships which Enron controlled.

Resultantly all debts and losses that it suffered were transferred to these SPEs and were not appeared on the financial statements of the Enron. With the help of these SPEs Enron not only got the freedom to move the currency besides having full anonymity which basically helped them to hide the losses it suffered by dumping them into the financial statements of these Special Purpose EntitiesApart from being the involvement of the top executives of the company there were reports which suggested the involvement of the Clinton administration during the 1990s era.

(Smith, 2002). Not only the involvement of ENRON into concealing the facts, it was also believed that ENRON executives exceeded their original mandate to involve the company into Political affairs even indicating a very significant shift in the ethical and statutory responsibilities of the Skilling and Lay to the shareholders of the ENRON and its other stakeholders.There are also numerous incidences where the use of un-ethical practices was adapted by the leadership of the ENRON. Examples include the building up of the pipeline from Mozambique to South Africa after National Security Adviser Anthony Lake threatened to withhold aid to Mozambique if it didnt approve the project.

(Rose, 2002)ConclusionThese incidents suggest that Enron leadership not only used their power, authority and influence within the government as well as at other platforms to get into un-ethical practices.ReferencesRose, Q. &. (2002, Feb 16). 50 Reasons Why the Democrats are Hypocrites when it Comes to ENRON. Retrieved March 1, 2008, from The American Partisan: http://www.american-partisan.com/cols/2002/guest/qtr1/0216.htmSmith, C. R. (2002, March 5). Enron Linked to Corruption in Clinton White House .

Retrieved March 31, 2008, from http://archive.newsmax.com: http://archive.newsmax.com/archives/articles/2002/3/4/211830.shtml