Question

Enron Documentary Reflection of the Bankruptcy

1. Describe the three levels of Enron culture?

A. Assumptions

B. Values

C. Artifacts

2. How did the leaders at Enron influence the organizational culture?

3. Who were the agents and principals?

4. Explain the agency problem with regards to knowledge and incentives?

Answer 1

3 Levels of enron culture
A.Assumptions
Assumption was made that the money is motivation.
Lack of culture and accountability

B.Values
Ignorant manager
Focus on monetary benefits
Ignorant of Business Ethics

C.Artefact
Manipulation in financial accounting
Mark to market accounting
Bribery for Enron's auditor
Exercise bonus system for the top management.

2. Leaders at enron influence the organisational culture by forming a team of manager that could manipulate the financial statements.
Leaders demonstrated greed and pushed the employees to follow the same. Negative competition was induced due to Rank and Yang system where 20% of poor performers were forced out of the company.

3. The agent and principal was arthur andersen which is one of the largest Audit and accountancy partnership that help Enron to manipulate accounting loopholes and financial reports.

4. Agency that is Arthur andersen was paid million of dollars per week as a compensation or bribery in return for the mistrepresented financial information and manipulation of financial report.