Cultic Studies Review, Vol. 5, No. 1, 2006, Page 54
which the role of Enron‘s leaders was consistent or otherwise with the characteristics
identified. Finally, the discussion is located in the context of the changing roles of CEOs
more generally, and the extent to which what can be defined as corporate cultism is
becoming a more common characteristic of organisational life.
This paper draws on the academic literature on the cultic phenomenon, which has, however,
rarely been applied to the corporate world. Information on Enron is derived from the vast
archive of material now published on the organisation – in particular, on the key accounts of
former employees, as exemplified by Cruver (2003), Swartz and Watkins (2003) and
Watkins (2003a.b.). Other accounts have proliferated in the mass media and business
press, and are broadly consistent with the sources highlighted in this analysis. Organisations
can be viewed as narrative spaces, in which stories and accounts are employed by all
participants to facilitate the process of sensemaking (Gabriel, 2004). It is therefore useful to
examine the narrative structures developed by former Enron employees, to ascertain both
their understanding of what facts matter most and identify the most pertinent
interpretations they attach to those facts. As Gabriel (2000) has also pointed out, narratives
are constructed with the aid of a number of interpretative devices or poetic tropes that are
concerned with attribution – e.g. the attribution of responsibility, blame and credit, the
attribution of causal connections and the attribution of agency. Thus, the accounts of
organisational actors cannot be read simply to discover an invariable and unyielding
objective truth about organisations, but rather to explore their meaning for the actors
involved. However, in line with interpretivist approaches to organisational discourse,
interpretations of texts, stories and narratives are also informed by such factors as ―the
interpreter‘s own frame of reference‖ (Heracleous, 2004, p.176). In this case, the paper
applies a conceptual framework drawn from the general literature on both cultic
organisations and transformational leadership, and analyses the narrative constructs of
others to ascertain to what extent their accounts of facts, intention and agency can be
better understood from within that particular analytic framework.
Thus, the approach adopted involves the close study of a number of texts which have had a
particularly strong impact on the debate about Enron. For example, Sherry Watkins, who is
generally regarded as the main whistleblower that brought Enron‘s problems to public
attention, has been honoured by the US Academy of Management for her contribution, been
interviewed in the Academy of Management Executive and published in the Californian
Management Review. Her accounts are strikingly consistent with those of Cruver, also used
here as a key source of information about the organisation‘s internal culture. Other data are
drawn at various points from the general academic literature on the topic. Many researchers
have critiqued aspects of Enron‘s management system, such as its ―rank and yank‖
appraisal mechanism, but in general have neglected to consider the extent to which the
practices they describe could be better informed by the general literature on charismatic
leadership and cultism. However, their data is also utilised in the present argument. Enron
is too complex a story to avail of one single explanation for its rise and fall. With that
caveat, this paper highlights an important but still under explored aspect of the Enron saga,
and one that has wider implications for the role of leadership in most business
organisations.
Charismatic Leadership and Cults
A widely used definition characterizes cults as:
a group or movement exhibiting great or excessive devotion to some person,
idea or thing, and employing unethical manipulative or coercive techniques of
persuasion and control… designed to advance the goals of the group‘s
leaders, to the actual or possible detriment of members, their families or the
community. (AFF, 1986, p.119-120)

Cultic Studies Review, Vol. 5, No. 1, 2006, Page 55
Typically, cults have a shared commitment to a charismatic leader and uphold a
transcendent ideology, the nature of which varies dramatically from group to group but
which is as likely to be secular in nature as it is religious (Lalich, 2004). A cult‘s leader
therefore possesses enormous authority in the eyes of his or her followers. Having invested
many of their hopes for a better life in the leader, followers are intrinsically motivated to
look positively on the leader‘s words and actions. The resulting high commitment of
members is usually expressed in Stakhonivite work norms which mean that the group
environment virtually monopolises their time. Members also replace their pre-existing
beliefs and values with those of the group, lose confidence in their own perceptions in
favour of those of the group‘s leaders, and experience social punishments such as shunning
by other members if they deviate from carefully prescribed norms (Langone, 1995 Singer,
1987). Conformity is critical. The outcome is an environment dominated by what has been
described as ―bounded choice‖ (Lalich, 2004) – i.e. one in which the expression of only a
limited and tightly regulated repertoire of beliefs, behaviours and emotions is permissible.
Overall, the following key ingredients of cultic dynamics, which mirror the defining traits of
transformational leadership, have been identified in the literature (Tourish and Pinnington,
2002):
1. Charismatic leadership (which may reflect some innate qualities on the part of the
leader, but may just as easily be a socially engineered construct in the minds of the
followers, and thus constitute an attributional phenomenon)
2. A compelling vision/ Intellectual stimulation (the vision being of a transcendent or
totalistic character, capable of imbuing the individual‘s relationship to the
organization with a sense of higher purpose. Meanwhile, intellectual stimulation is
aimed at motivating followers to intensify their efforts in support of the vision,
compellingly articulated by the group‘s leaders)
3. Individual consideration (or a feeling that the followers‘ interests are being attended
to, and perhaps that they are in some way important to the charismatic leader,
leading to a process of recruitment/initiation, conversion and indoctrination)
4. Promotion of a common culture (a set of norms which specify particular attitudes and
forms of behaviour deemed to be appropriate. Within cults, these also minimize the
expression of dissent, other than within carefully controlled limits, and hence
produce a punitive internal environment).
Each of these is now considered in-depth, and the extent to which they were at play within
the Enron organization is explored. The dominant traits of cults are also outlined in Exhibit
One, alongside a summary of Enron‘s internal cultural dynamics that operate in parallel to
them. See Exhibit One in pdf file attached.
1. Charismatic Leadership, Dissent, and Leadership Privileges
Leaders often possess and dramatically communicate ―a vision‖ for their organization. A
vision has been defined as a mental image that a leader evokes to portray an idealized
future state (Conger, 1989). Equipped with a compelling vision, charismatic leaders can
have a ―profound and extraordinary effects on followers‖ (House and Baetz, 1979, p.339).
Clearly, these effects may be individually benign and/ or socially useful. But they may also
be individually harmful and/ or socially destructive. It is therefore not surprising that
charismatic leadership has been described as a recurrent dynamic in all manner of cults,
including doomsday cults in the 1950s (Festinger, 1957), the infamous Jonestown cult of
the 1970s (Layton, 1999), the suicidal Heavens Gate cult in California during the 1990s
(Lalich, 2004), and in the homicidal Aum cult in Japan (Lifton, 1999). Leaders in each of
these groups articulated a compelling ―vision‖ that motivated their followers to display