Enron was the subject of the study. Enron Inc. is a Texas-based energy company. There were 30,000 people employed by the company. To maintain shareholder trust and high shares values, management presented altered numbers to stakeholders in an attempt to hide its financial information. In 220, however, the value of the company’s shares fell from $95.75 to $0.26 after an internal exposé of manipulation and corruption. Insolvency and liquidation of the company was caused by conspiracy between the CEO and its leadership (Edwards, et al. 2019, 2019). One of the main conspirators was the CEO. The company was also fined $35,000,000 for the damage. This organization was involved in colluding to provide inaccurate financial information to stakeholders.
Enron offers profile management planning
Companies that are objective create detailed regulations and rules to regulate obligations for management personnel. The policies also determine how structural layers are connected and involved. These policies not only define the purpose and vision of the business, but also the strategic goals and objectives. The corporate vision, mission and strategic objective are all defined in the organization’s policies. The highest levels of management will make informed choices that are consistent with the strategic objectives. Policies are the guidelines that encourage transparency and accountability among stakeholders. The code of ethics, which outlines acceptable conduct at work by employees and managers, is also part of the organization rules. Enron illustrates a company whose top leadership ignored regulations and made financial and strategic decisions while disobeying them. It was not possible for senior managers to base decisions on reliable and accurate information. Jacoby, 2020. The comprehensive business strategy of the company was affected due to its reliance upon skewed financial records. As a result of dishonesty by its management, the institution’s share prices plummeted from $ 90.75 down to $0.26.
Enron leadership relied more on subjective perceptions than company rules when making decisions about strategic strategies. Subjective and incorrect judgments are not as effective at managing environmental uncertainty. To make smarter decisions and be more effective, the company should have easy access to trustworthy information in an ever-changing environment. Managers were not able to make complicated judgments because they did not have reliable information. Management also created bureaucratic structures that prevented seamless information flow across and between the organograms. The main obstacle posed by bureaucratic structure is that it generates superfluous layers that impede effective involvement and information flow (Armstrong & Taylor, 2020). Not only does it discourage transparency and accountability, but bureaucracy also makes access to important information more difficult. They created a bureaucracy to be able to fabricate data without having it questioned by shareholders.