Leadership for Conflict of Interest-MyAssignmenthelp.com

Question: Discuss about theLeadership for Conflict of Interest. Answer: The scandal of Enron was disclosed in 2001. The scandal of the company led the company to bankruptcy and Arthur Andersons dissolution remained among the largest five auditing and accounting firms globally (Hasso, Duncan, 2013). In the history of America this was the largest bankruptcy that is recorded and the scandal was the largest audit failure at that point of time. The complex structure of the industry was not known by much of the outsiders. Eventually the company was founded in the year 1985 and later in 1990s it became one of the most reputed company in the history of America (Coxe, 2016). In the initial stages of 2001 it was found that the companys financial position had been continued through many fraudulent activities of the system and it had been carried out in a creative way. The loss of the shareholders were over $11billion and the issues behind this have been found in the case study. The issues are as follows, Conflict of Interest Engaging with unethical accounting firm Unethical culture inside the organization Lack of transparency Lack of principled executives and senior managers It can be assumed that the companys hiring and firing system was directed to enhance fraudulent activities (Ng, 2008). The analysis of the case study is mainly based on the leadership approach and ethical issues while looking at the organizational structure of the company. The paper will also take a close look on the approaches of leadership through which the unethical issues are reduced inside the organizational environment. Findings Leadership Impact on the Workplace Culture of Enron Leadership has its impact on the workplace culture of Enron. Enron faced a major problem where lack of transparency took its place inside the environment of the organization ("Lack of transparency", 2013). The leaders of the company failed to make the status of the company transparent while the full concentration was in protecting the image of the company. The main acts of the leaders include trust and full disclosure of the business process to the employees. Here in the case of Enron the CEO of the Company told the employees and the stakeholders that the price of the stock would rise where actually he started to sell the stocks of the company. The stakeholders came to know that the CEO sold his part of stocks when bankruptcy took its place. Transparency in leadership theory carries the sign of trust and the leaders actually require to exercise morality and openness in all the actions those are taken inside the organization (Striebing, 2017). The major failure in the structure of Enr on was lack of transparency. Conflict of interest in the field of Enron was a major issue where the company faced all kinds of trouble to make the business continued. The main cause of the failure was lack of proper oversight of the company management (Tracy, 2014). The board of directors of Enron expected to work based on the interest of the shareholders. The shareholders were expected to guard the ethical code of the firm and this did not happen. In this scenario the boards failed the shareholders. The manipulation of the company in the field of financial account went unnoticed (Read, Mati, 2013). It happened because of the conflict of interest. With the help of the lawyers and accountants the leaders of the company was able to create subsidiaries. These companies were looked like they were in partnership with Enron and this helped the companies to sell all the assets of the company in the time of posting false earnings. Through the aspect of conflict of interest it was possible for the top officers of the co mpany to make benefits from the ventures of the business and this was questionable. This is so because the ventures always tend to drag the fund of the company and this was harmful for the company. In this cases the leaders were not ethical and effective where they should be. The acts of the leaders must be supported with moral intention while employing the competence. Engaging unethical accounting firms is another leadership impact in Enron. Arthur Anderson came into headlines after the bankruptcy of Enron (Altenburg, 2012). The accounting firm with whom the company was involved allowed massive accounting errors. The company actually made it possible for Enron to be engaged in financial manipulation in a continuous basis. It can be said that the employees of Anderson damaged the documents of the company and for which there are no evidence of employment for the employees. It actually represents a leadership approach which was ready to help the companys employees. In this case the leadership approach Anderson played were unethical. The moral standard of leadership in the accounting firms were low in comparison with the other approaches. The firm had to go through different stages of closure since the time the company had lost its credibility. The leaders in this case must be ethical while making any kinds of decision in the field of business. Ethica l leaders are supposed to think about the consequences of the actions through helping the company in fraudulent situations. The leadership approach in this case was unable to influence the value of ethics in this case and that is why the company had faced difficult situations (Ortmeier, Davis, 2012). The behaviors of the leaders were the main reasons behind all these. Lack of Principled Executives and Senior Managers The senior management is considered to be expected as the key factor of firm ethical culture. The set values of the company were not successfully implemented by the senior managers in the field of the business. That is the reason why Enron could not continue their business process in the field. Trust and ethics are the most crucial factors in the business scenario where the senior managers and the leaders must be ethical to control the employees of the business in proper mannerism (Chermack, 2011). If the trust and the ethics are lacked in this scenario then the followers of the leaders as in the employees will face difficult situation in the field. Unethical Culture Yes, the leadership of Enron shape the culture of the workplace. The culture of Enron was based on some important fact of individualism, relentless and innovation of profit. The ethical behaviors and the cultures of the company influenced the employees in many ways and they performed according to the culture and awards was given to the employees. The main motto of the culture is to encourage the employees to make profit for the organization. It can be said that the organizational process must be related with the cultures of the company which must be maintained effectively by the employees (Hiriyappa, 2009). The culture of Enron ensured that the culture and the performance evaluation of the company were rigorous and threatening to the employees of the company. The low level employees got fired and incentives were there for the senior level officer where the incentives should be for the stakeholders in order to give them the benefit accordingly. Poor organizational culture is the main reason for the organization failure. It is mainly based on the leadership approaches that the leaders or the managers take to control the organizational scenario. It is highly recommended that the importance of the ethical culture must not be underestimated (Mohamad, 2010). Discussion The major problems that led Enron to bankruptcy and collapse can be understood through different scenario of the case study. The organization actually lacked in the field of transparency among the stakeholders. There were conflict of interest among the company management and top executives. Arthur Anderson also played a big role in the fraudulent activities of Enron. The outside accounting and auditing firm helped Enron in manipulating the financial part of the company where the employees completely destroyed the documents of the company (Till, 2013). The management of the company and senior executives did not carry the principles of the leaders effectively. The organizations employees were rewarded for their performances where the culture of the company was encouraged as fraud. The culture of the company was risk taking where the intent was to make maximum profit out of it. It has been discussed earlier that the senior level managers were rewarded for their activities and the stakeh olders are neglected in providing the profits. This was against the culture of actual leadership where the company went against the ethics and principles ("Special Issue Leadership Journal: Indigenous Leadership", 2014). The actions were marked as downfall for the firm and everything was based on poor ethical strategies of the culture. Conclusion The case study has stated that if the ethics in leadership theory are not followed properly then the whole scenario of the organization breaks down. It has been witnessed in the case of Enron and it has been seen how the company went form the top to bottom in the company list. The analysis has shown that the company has many audit failure. The organization also got involved with fraudulent activities where the situation led Enron to bankruptcy. Lack of transparency, conflict of interest, unethical engagement of Arthur Anderson, poor organization and lack of principled leadership actually took the company in the most difficult situation. Unethical practice and fraudulent activities are the main two significance of the case study. Recommendation The outlined solution it can be assumed that avoiding unethical practice might have helped the company to avoid bankruptcy, audit failure etc. It is the responsibilities of the leaders where they must be ethical enough to avoid all fraudulent activities. It is their significance of working that can avoid all complicated situation inside the organizational environment in order to make flow of work continued. Fraud policy is the best option to detect all frauds inside the organizational environment. The policy could have made the management department more responsive and regular in the field. It could have also guide the management department of the company to take full responsibility for irregularities and misappropriation. Fraud policy is the only way to detect fraud activities inside the organizational environment. This can be considered as one of the greatest move in the organizational environment in order to make the whole scenario of the company ethical. The recommendation is to use fraud policies that does not allow any fraudulent activities in the field of business. It can be said fraud policies are the best way to handle the organization and it can increase the transparency and ethics of the leaders in effective ways. The fraud policies will also ensure that everybody in the organization will be responsible and principled. Implementation The fraud policies can be implemented by the management department of the company. It must be made public for all the employees of the company. There must be a background of the fraud policy based on which the company will implement the policy inside the structure of the company. It can be said the leaders and the managers of the company must come into play in this kind of situation and they must follow all the ethics and regulations of the company while implementing the fraud policy. The documents and the drafts must indicate the person for whom the reports are prepared. The authority of the organization must approve the fraud policy in order to make it effective in the organizational environment. It can be said that the fraud policies are the best option to remove all fraudulent activities inside the organizational environment but the policy must get its platform to be implemented. The policy actually indicates that the officers who will conduct in the process of investigation are the one who will actually be guilty in this case. This is how fraudulent activities can be implemented as recommendation. References Altenburg, A. (2012). Bankruptcy (1st ed.). New Brunswick, N.J.: New Jersey Institute for Continuing Legal Education. Chermack, T. (2011). 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