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The Smartest Guys in the Room – The Enron Story Essay

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Updated: Sep 12th, 2021

Introduction

The movie-the smartest guys in the room, the Enron story is a documentary movie based on a book by the same name. The book was written by fortune reporters Bethany McLean and Peter Elkind. The book is a dramatization of the study of one of America’s biggest business scandals (worldwide in general). The movie analysis the circumstances that led to the collapse of one of Americas largest corporations (Enron corporation)

Small history

The Enron Corporation was an American energy-based, corporation based in Houston Texas. It was one of the world’s leading companies in the fields of pulp and paper, electricity, communications, and natural gas. The company collapsed in 2001. According to company directors and Wall Street reports the company filed for bankruptcy in 2001 after it was revealed that its perceived financial position was mostly sustained by institutionalized and systematic accounting frauds. In the ensuing investigations, the companies involved with other companies caused serious challenges as the suit led to the dissolution of the Arthur Andersen accounting firm. In addition, the company (Enron) was heavily involved in the California energy crisis between2000 and 2001, which at one time affected more than 1.5 million power consumers in San Francisco.

Corporate culture

The filmmaker’s intended message was on the issue of corporate culture and especially the inherent problem of corruption associated with it. The movie aims at presenting two mechanisms of promoting a highly profit-driven and hugely immoral corporate culture (that of the Milgram experiment and the vitality curve). In the analysis, the filmmaker tried to show how the two concepts can be used to the benefit of the company owners but to the detriment of the workers. In this film, the filmmaker shows the audience how the vitality curve( a measurement of the proportion of production a worker provides as compared to other workers) the application of this principle was so serious at Enron that workers who could not produce almost 1000 times their salary could end up being fired. This atmosphere at the workplace caused people to, not only not care about the law but also actively compete in breaking the law.

Since the movie uses actually recorded video clips from Enron employees, viewers can actually hear as the company employees discuss how they will transfer power from California in order to cause blackouts. In so doing the company would create an unnecessary demand for the power and thus the company would ship back the electricity at a higher price.

Using the Milgram formula for increased profits, Enron employees were constantly asked to perform immoral business practices. It took a long time for the employees to ever question the moral grounds under which they performing these tasks.

The movie’s theme of exposing a negative corporate culture image is perfect since it uses a real-life example. In addition, the movie uses video and audio clips of the exact business environment. The film demonstrates clearly how a company can collapse and bring down many innocent victims with its collapse. The film visually demonstrates how other corporations in the fields of accounting, auditing, banking, or brokerages could have profited from lying to the public on the true financial position of their companies.

Deviance and social control

Deviance is the violation of cultural/social norms intentionally. It is practiced in a manner that constitutes a crime; in the case of the Enron situation, the company employees intentionally ignored work ethics in pursuit of huge profits. As it is clearly shown in the movie the employees intentionally caused power blackouts in California in order to create a nonexistent demand and later sell the power back at inflated prices.

In order to instill social control in deviant people the legal and judicial systems are employed through the arrest, prosecution, and subsequent incarceration of the involved parties as was the case with the Enron directors.

Social interaction and Social Structure

Social structure refers to groups in a definite relationship with each other in relation to behavior within a social setting. It usually involves social institutions having a set of norms that ultimately become embedded in the social system. In the case of the Enron affair the required norms were non-existence and this caused the company to negatively impact other social institutions like the Arthur Andersen accounting firm.

Social interaction is a dynamic process that involves actions between different members/groups of society. In this setting, the actions of one member/group help modify the actions of others. These influencing factors may be accidental, intentional, or regulated. In the case of the Enron affair, their actions that influenced other actor’s actions were a combination of both intentional and accidental. Through the actions of the Enron Corporation other companies got themselves involved in the mix-up either willingly or unwillingly

Critique

On the other side, the filmmaker seems to, unfortunately, fail to highlight the role of the whistleblower (Sherron Watkins) as having been heroic. Instead, the filmmaker specializes in the role of the company executives, forgetting that he would not have had the storyline in the first place if it was not for the heroic deeds of the whistleblower.

Conclusion

The smartest guy in the room-the Enron story is a movie that has been well set to drive the point home. The movie portrays clearly how company employees can be manipulated to act immorally to the detriment of their careers. In addition, the desire for huge profits at the expense of workers has also been shown to be a driving force for immoral business practices.

References

  1. Web.
  2. Richard T. Schaefer et al (2003), Sociology, McGraw-Hill, Ryerson.
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IvyPanda. (2021, September 12). The Smartest Guys in the Room - The Enron Story. Retrieved from https://ivypanda.com/essays/the-smartest-guys-in-the-room-the-enron-story/

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"The Smartest Guys in the Room - The Enron Story." IvyPanda, 12 Sept. 2021, ivypanda.com/essays/the-smartest-guys-in-the-room-the-enron-story/.

1. IvyPanda. "The Smartest Guys in the Room - The Enron Story." September 12, 2021. https://ivypanda.com/essays/the-smartest-guys-in-the-room-the-enron-story/.


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IvyPanda. "The Smartest Guys in the Room - The Enron Story." September 12, 2021. https://ivypanda.com/essays/the-smartest-guys-in-the-room-the-enron-story/.

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IvyPanda. 2021. "The Smartest Guys in the Room - The Enron Story." September 12, 2021. https://ivypanda.com/essays/the-smartest-guys-in-the-room-the-enron-story/.

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IvyPanda. (2021) 'The Smartest Guys in the Room - The Enron Story'. 12 September.

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