The paper "Incident Command System - Enron" is a perfect example of a business assignment. Corporate culture is organizational norms in carrying out its activities, it is evident that Enron corporate culture kept changing so fast to a point that employees could not easily adapt, the key contribution to changing corporate culture was stimulated by changing a line of business for Enron since they were previously majoring on a tangible asset but gradually adopts intangible asset dealings (Derivatives assets) which turned corporate culture into aggressive short term growth emphasis rather stable and long term growth.
This practice increased company volatility since they were depending on marking to a market approach which profit recorded today might turn to huge losses in the future because of their performance unpredictability. Management behavior is the conduct of the company’ s administration in conducting company business. It is notable that there was a great change in management behavior on both the audit and Enron, for example, Andersen changes from its professional mandate of giving an independent opinion to stakeholders such as shareholders to providing consultancy service which is a threat to the auditor’ s independence due to self-review threats (Arthur, J.
B. 1994). Therefore, corporate structure and management behavior changed turned employees of Enron to be aggressive on profits rather than understanding on risk attached to aggressive use of intangible assets. On the other hand, the Andersen team failed to understand the effect of engaging more on consultancy to its clients to development of an audit opinion. Below are various corporate culture and management behavior that led to the collapse of Enron in 2001; Directors of any company act as agents to shareholders/investors therefore, it is mandatory for the agent (directors) to act for the best of the principle (investors) leaving behind their personal interest.
Thus there is the trustee-beneficiary relationship between Enron's board of directors and stakeholders (Investors, employees, Creditors, debtors and government). Enron board of directors, therefore, shows a failure on their side to carry out fiduciary duties given to them by the company stakeholders in four ways; use of skills and prudence in administration, maintenance of diversified investment portfolio, non-adherence to the written guideline of the company and “ executive benefit rule” (Arthur, J.
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