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Much of the unethical behavior we see in abusive organizations is similar to institutional abuses observed in the past.
Enron, for example, was one of the "most admired companies" in the USA, yet collapsed.
Researchers found the leaders at Enron were unethical in six areas:
Enron, for example, was one of the "most admired companies" in the USA, yet collapsed.
Researchers found the leaders at Enron were unethical in six areas:
1. Abuse of Power.
Speaking of their CEO's, Craig Johnson writes, "Both Lay and Skilling wielded power ruthlessly. Lay routinely demoted vice chairs who disagreed with him, and Skilling frequently intimidated subordinates."
Speaking of their CEO's, Craig Johnson writes, "Both Lay and Skilling wielded power ruthlessly. Lay routinely demoted vice chairs who disagreed with him, and Skilling frequently intimidated subordinates."
2. Excess Privilege.
"Excess typified top management at Enron. Lay told a friend, 'I don't want to be rich; I want to be world-class rich' . . . he joked that he had given his wife, Linda, a $2 million decorating budget for a new home in Houston, which she promptly exceeded."
"Excess typified top management at Enron. Lay told a friend, 'I don't want to be rich; I want to be world-class rich' . . . he joked that he had given his wife, Linda, a $2 million decorating budget for a new home in Houston, which she promptly exceeded."
3. Mismanaged Information.
"Enron officials manipulated information to protect their interests and to deceive the public. Both executives and board members claimed that they weren't aware of the company's off-the-books partnerships and shaky financial standing.
"Enron officials manipulated information to protect their interests and to deceive the public. Both executives and board members claimed that they weren't aware of the company's off-the-books partnerships and shaky financial standing.
4. Inconsistent Treatment of Internal and External Constituencies.
"The company was generous with its friends."
"In contrast, critics of the company could expect retribution."
"The company was generous with its friends."
"In contrast, critics of the company could expect retribution."
5. Misplaced and Broken Loyalties.
"Leaders at Enron put their loyalty to themselves above everyone else with a stake in the company's fate . . . They also abused the trust of those who worked for them."
"Leaders at Enron put their loyalty to themselves above everyone else with a stake in the company's fate . . . They also abused the trust of those who worked for them."
6. Irresponsibility.
"Enron's leaders acted irresponsibly by failing to take needed action, failing to exercise proper oversight, and failing to shoulder responsibility for the ethical miscues of their organization . . . Neither CEO stepped forward to accept blame."
"Enron's leaders acted irresponsibly by failing to take needed action, failing to exercise proper oversight, and failing to shoulder responsibility for the ethical miscues of their organization . . . Neither CEO stepped forward to accept blame."
Source: Craig Johnson's textbook, "Meeting the Ethical Challenges of Leadership: Casting Light or Shadow."
