Examining a Business Failure Essay Example | Topics and Well Written Essays - 1250 words

Examining a Business Failure - Essay Example In simple terms, business failure can be defined as a situation whereby a company or an organization ceases operations due to inability to make profit or because it can no longer be able to bring in sufficient revenue that can cover the expenses it incurs. Studies have shown that business failure can be caused by the following factors: increased competition; poor implementation of strategies; outdated technology; poor management; poor leadership; financial problems; and economic challenges (Hatch, 2006). In order to have a better understanding of business failure, this paper will discuss the failure of Enron Corporation. Enron Corporation was one of the leading players in the energy market; actually, in the year 2001, it was the United States ’ seventh Largest Corporation in terms of revenues (Mclean and Elkind, 2003). However, it suffered a catastrophic collapse as a result of financial scandal (famously known as Enron Scandal) which involved its accounting firm (Arthur Ander sen), Enron’s management and leadership. The scandal involved fraudulent accounting procedures and practices which occurred during the 1990s and the beginning of 21st century. These fraudulent activities included manipulation of the Enron’s stock price. This scandal eventually led the Corporation to file for bankruptcy in December 2001 (Fox, 2003). Robbins (2004) argues that whereas events leading to business failure of an organization often take different dimensions, the contribution of the organization’s management, leadership, and organizational structures towards the failure cannot be ruled out. As a matter of facts, he notes that this contribution is usually central to business failure in any given organization. So, how did Enron’s leadership, management, and organizational structures contribute to the failure of the organization? Fox (2003) observes that the trials relating to Enron scandal showed that, indeed, the Corporation’s leadership co ntributed to its failure. Enron executives were charged with criminal acts that include insider trading, money laundering, and fraud. What became clear was that the Corporation’s leadership only focused on influence, greed, power, and profits and paid little attention to the Corporation’s Code of Ethics (Mclean and Elkind, 2003). Their focus made them to make wrong and deceiving decisions, as well as conspiring with Arthur Andersen auditors to engage in illegal accounting activities and methods. Jeff Skilling, Ken Lay and Andrew Fastow are the most notable top-level leaders of Enron whose behaviours greatly contributed to the collapse of the Corporation (Fox, 2003). For example, Andrew Fastow who was the Corporation’s chief financial officer engaged in improper partnerships, fraud, and money laundering activities. Jeff Skilling engaged in conspiracy, insider trading, made false financial reports, and in fraud. Ken Lay made misleading statement and got involved i n fraudulent activities (Mclean and Elkind, 2003). As leaders of the Corporation, Fastow, Skilling, and Lay were expected to adhere to and uphold Enron Code of Ethics that called for integrity, excellence, communication, and respect. However, they engaged in activities that challenged the Corporations ethics code’s foundational values. The top leadership as well as the Corporation’s senior management contributed to the failure by attempting to create a conglomerate in the energy industry that was aimed at increasing the

Case study Assignment Example | Topics and Well Written Essays - 1000 words - 6

Case study - Assignment Example Lieutenants were appointed and they were given specific works. The intelligence and scouting division was headed by Will Scarlet. He always kept a track of the Sheriff’s moves. He continuously gathered information about the travel procedure of merchants and tax collectors. Discipline among the band members was maintained by Little John. He also made sure that archery of the band was maintained to the level that their job demanded. The finance division was taken care by Scarlock. He did the job of converting ransack to cash. He also looked for appropriate secret storage places for the surplus cash. The Miller’s son named Much served the intricate task of meeting the needs of the band members which was continuously increasing (Gerring 67). In the current scenario, Robin Hood needs a new plan of action. It may even significantly modify and design alternative strategies to fight against the sheriff. The old plan has now become obsolete and thus needs to be enhanced for better results. There has been a change in the external and internal environment and therefore the old ways of generating revenues are not working any more. An alternative has to be planned to avoid the financial crisis that the band is going through. The organization of the band has to be restructured to reinforce discipline within the band. The band members should not misalign from the goals that they are supposed to achieve. Thus a new mission has to be designed to overcome the current problems that the band is facing (Pahl and Richter 143). The expansion of band’s operations to other unexplored parts of Sherwood Forest can be an effective strategy. This could help the band to mitigate some of the difficulties faced by the band. This would help the band to significantly grow in size. Revenue generation will be enhanced and the resources obtained from the Sherwood Forest will be sustainably maintained. Some other alternative method of revenue generation