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Paper Topic:

Groupthink caused everyone associated with Enron to contribute to its downfall

`GroupThink ' just made the Enron problem harder to solve

I strongly disagree with the article written by Roger Brunswick and Gary Hayes The Enron Cult 'Groupthink ' caused everyone associated with Enron to contribute to its downfall . The article , stated that , But it is naive to think that culpability rests entirely with Lay , his lieutenants , and some wayward lawyers and auditors . The tragedy of Enron is that it was caused by what is known as `groupthink ' Truth be told almost everyone associated with the company contributed in some way to its collapse (Brunswick

and Hayes . The article diminishes the accountability of Lay , Jeff Skilling , Andy Fastow and the lawyers auditors and bankers in participating knowingly in the scam and in creating conditions which resulted in the `groupthink ' problem within the organization that perpetuated their unethical and illegal activities . I contend that the main problem of Enron was caused by lack of ethics of its Chairman Ken Lay and the poor decisions made by its Board of Directors in choosing Jeff Skilling and its grave omission of not developing a more sensible mission statement for the company . I will establish that the scam was mainly caused by greed and lack of ethics on the part of these people and not because of `groupthink or as Janis defined it as the pressure for unanimity which overwhelms the member 's motivation to realistically appraise the alternative courses of action Group pressure leads to carelessness and poor decisions . This eventually results in irrational thinking and action (qtd . in Brunswick and Hayes . `Groupthink ' was indeed present in Enron but it did not start the problem . It only reinforced the problem and made it difficult to stop once it started . Once the greed for money overcame any reservations these individuals may have had the presence of groupthink contributed to the inability of the Board of Directors and Executive Management to test and question the validity and soundness of Jeff Skilling 's proposal . They failed to ask themselves whether the Mark in Market and Hypothetical Future Value ' were dangerous and detrimental in the long run due to unanticipated events which can cause the `expected profits ' from the deals not to be realized

There was also an environment of no fear of punishment of wrongdoing ' in Enron . There was no motivation to be ethical and lawful . Upon notification of the illegal use of Enron 's resources by rogue traders Ken Lay did not punish them because they made lots of money for the company . If indeed it is possible that Ken Lay had no knowledge and had not directed the continuance of illegal activities in his company what could he have done to prevent this from happening The Enron Board of Directors and owner-chairman Ken Lay should have clearly defined and stated the goals of the company and its values to its Executive Management Jeff Skilling Andy Fastow and to its employees . For example , they should have defined Enron 's mission statement as creating a profitable and lawful business...

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