ENRON: The Smartest Guys in the Room film reflection According to Ritzer, (2004). “The process of rationalization causes society to put a great deal of emphasis on efficiency, predictability, calculability and control”. Progressive rationalization can actually result in some irrational consequences. ENRON was superior at energy deregulation and became one of nation's ten largest companies. However, its collapse affected thousands of employees and bankruptcy left investors with worthless stock. ENRON’S aggressive culture and risk taking contributed to their collapse. In addition, ENRON’s use of efficiency, calculability, predictably and control, which are the four dimensions of McDonaldlization helped them succeed in the business world
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Enron was an energy, stock exchange, and services company. Gibney, (2007) stated that Ken Lay grew up poor but he learned the value of hard work. Lay had ambition and knew his life could be better, his ultimate goal was to become rich. This type of work ethic coincides with efficiency our first dimension of McDonaldization. An additional example of efficiency by Enron was inflating the numbers which provided the desired efficiency and predictability that investors wanted. They also used the future value of potential profits to drive profits up for the current day which should have been against the rules due to the ethical standards of business. Similarly, to maintain efficiency, the company took the rationality of the workplace and made it into irrationality by manipulating the stock market. Ritzer (2004) stated that there was danger in progressive rationalization and it can become irrational when a company loses sight of their ultimate …show more content…
Gibney (2007) stated that Skilling encouraged the aggressive culture and risk taking. The Enron Corporate retreats were often involved engaging in extreme sports and the tough guy persona was rewarded in the company. On the trading floor at Enron, employees would work twelve hour days and they often stepped on each other to get ahead and receive bonuses. Skilling was controlling the employees and the traders. Secondly, Enron proved time and time again that the executives were unethical, and were involved in unethical behavior. For example, during the California wild fires executives were said to have chanted “burn baby burn” while they were stealing money from the people who were paying unaffordable and high utility bills. Enron was actually controlling the cost of power by abusing California's deregulated market where they created false power surges to increase pricing of energy costs. Equally important, The Enron Corporation appeared to be a financially sound company to outside world, but internally it had perfected a decentralized financial control structure, this made it difficult to get a good understanding of the company’s daily activities and how it actually operated. Enron had to maintain control in order to succeed in the stock market. Next, the dimension of predictably describes Enron’s use of the performance review committee. Gibney (2007) stated Jeff Skilling brought a corporate
Enron was an energy, stock exchange, and services company. Gibney, (2007) stated that Ken Lay grew up poor but he learned the value of hard work. Lay had ambition and knew his life could be better, his ultimate goal was to become rich. This type of work ethic coincides with efficiency our first dimension of McDonaldization. An additional example of efficiency by Enron was inflating the numbers which provided the desired efficiency and predictability that investors wanted. They also used the future value of potential profits to drive profits up for the current day which should have been against the rules due to the ethical standards of business. Similarly, to maintain efficiency, the company took the rationality of the workplace and made it into irrationality by manipulating the stock market. Ritzer (2004) stated that there was danger in progressive rationalization and it can become irrational when a company loses sight of their ultimate …show more content…
Gibney (2007) stated that Skilling encouraged the aggressive culture and risk taking. The Enron Corporate retreats were often involved engaging in extreme sports and the tough guy persona was rewarded in the company. On the trading floor at Enron, employees would work twelve hour days and they often stepped on each other to get ahead and receive bonuses. Skilling was controlling the employees and the traders. Secondly, Enron proved time and time again that the executives were unethical, and were involved in unethical behavior. For example, during the California wild fires executives were said to have chanted “burn baby burn” while they were stealing money from the people who were paying unaffordable and high utility bills. Enron was actually controlling the cost of power by abusing California's deregulated market where they created false power surges to increase pricing of energy costs. Equally important, The Enron Corporation appeared to be a financially sound company to outside world, but internally it had perfected a decentralized financial control structure, this made it difficult to get a good understanding of the company’s daily activities and how it actually operated. Enron had to maintain control in order to succeed in the stock market. Next, the dimension of predictably describes Enron’s use of the performance review committee. Gibney (2007) stated Jeff Skilling brought a corporate