Enron’s Lessons on Ethical Leadership in Business

Subject: Business Ethics
Pages: 2
Words: 422
Reading time:
2 min

Enron began to develop a code of ethics for its employees, which included a special dress code, rules of conduct in the team, and a set of beliefs and views of the authorities, which each employee had to follow. In practice, it was rather a code of aesthetics: the behavior of Enron employees should be appropriately presented because it is one of the factors of the formation of public opinion. It was a bright, attractive cover, hiding an endless fear of leaders and mutual distrust.

Enron created a Corporation of ‘an appropriate’ selfishness; that is why there could not be any coherent and efficient system. Such shock therapy could accelerate the development of the company and increase its performance only for a short time. A stable, long-term growth should be based on trust and mutual respect between managers and subordinates, as well as among colleagues.

Enron’s experience shows that leadership in manufacturing companies is not only a privilege but also a huge responsibility for all the actions of the organization and its employees. Only the development of psychologically right strategies for team building and rational use of the asset can ensure the company’s stable development and respect among partners and investors. It is also the responsibility of the competent executive to take care of the rights and interests of those who work for him or her because sincere respect, not fear, is the best incentive to improve the quality of work.

The system of imposing values that existed inside Enron sought to destroy the sense of the importance of employees’ ideas, replacing them with the ideas of the organization. As a result of such agitation, people turned into indifferent subordinates with no opinion at all. Universal individualism leads to a gradual disappearance of a personality, paradoxically, because greedy and jealous people are easier to attract with convincing promises of reputable millionaires.

The personal beliefs and values of employees should not be suppressed; they should be directed in such a way that they inspire people to do their work efficiently and honestly. After the collapse of Enron, it would seem that these conclusions should have become visible, but now many companies, although implicitly, still try to practice an authoritarian policy of leadership. The indestructibility of the desire to dominate and the inability of many people to cope with their ambitions create many large companies where fear and competition are the basis of running a business.