Cultic Studies Review, Vol. 5, No. 1, 2006, Page 68
the effect of reinforcing the power of Enron‘s leaders. Other employees manoeuvred and
conspired to avoid joining those in the category of ―losers‖ or ―chumps‖. Most critically, with
so much effort invested in face saving and self enhancement, the destructive practices of
Enron‘s leadership remained unchallenged, while a destructive corporate culture took
deeper root.
Conclusion
This paper has argued that many of the dynamics found within Enron resemble those of
organisations generally regarded as cults. In particular, it has described the existence and
the downsides of charismatic leadership, a compelling and totalistic vision, intellectual
stimulation aimed at transforming employees‘ goals while subordinating their ethical sense
to the needs of the corporation, individual consideration designed to shape behaviour, and
the promotion of a common culture which was increasingly maintained by punitive means.
The one exception is that, as the general literature testifies, cult members donate most of
their money and possessions to their chosen cause. They endure great hardship. Enronians,
by contrast, were well paid, with the promise of much greater wealth to come. On the other
hand, most saw their retirement savings wiped out in Enron‘s collapse, lost everything they
had invested in its shares and received nothing more than a $4000 severance payment
when it filed for bankruptcy, while top managers were paid exceptionally generous retention
bonuses (Watkins, 2003b.). Overall, the organisational culture strongly resembles that of
many well known cults, as does the behaviour of Enron‘s leaders.
There have been many attempts to portray the Enron scandal as a one off or at least rare
occurrence. In particular, President Bush characterised it as the product of poor behaviour
by a few ―bad apples‖, and therefore as an exceptional event (Conrad, 2003). Others have
noted that many business commentators have effectively used Enron as a ―scapegoat‖,
standing as a surrogate for a wider corporate malaise that is hence denied (Hensmans,
2003). In even more optimistic vein, as Deakin and Konzelmann (2003) have critically
observed, the exposure and then collapse of Enron has been used by some to argue that we
can be more confident in corporate America and its regulatory regimes. In line with the
reasoning of the latter authors, our own position does not support such an optimistic
interpretation of events.
In particular, recent years have witnessed an extraordinary growth in the power of CEOs,
while the power of employees has declined (Mintzberg, 2004). But a corollary of great
power is the anticipation of miraculous results. Such expectations are magnified in a context
of social despair or helplessness (Gemmill and Oakley, 1992). Imperial CEOs, all too aware
of the limited opportunity they are now afforded by the stock market to make a dramatic
difference, may be tempted to resort to the theatrical approaches typical of cult leaders,
and which were certainly the norm at Enron. In the process, they encourage conformity and
penalise dissent. Yet the evidence indicates that effective leaders need to do the opposite,
and in particular should ―encourage constructive dissent, rather than destructive consent‖
(Grint, 2005). Enron suggests that many if not most leaders have yet to grasp this point,
with potentially catastrophic results for their organisations.
Thus, more leaders are attempting to bind employees to the corporate ideal, while curtailing
forums for debate. They project an image of charismatic leadership, stress a compelling
vision, depict their companies as a surrogate family and attempt to blur any perceived
difference between the interests of managers and non-managers (Biggart, 1989). As an
example of where this may lead, there has been a growing interest in ―Spiritual
Management Development‖ (Bell and Taylor, 2004). Within this paradigm, trainers attempt
to release managers from ―negative thoughts‖, ―fears‖ or ―barriers‖, which impede the
development of a successful corporate culture (Heelas, 1992). Such approaches seek to re-
engineer the most intimate beliefs of employees, so that they are aligned with whatever the
the effect of reinforcing the power of Enron‘s leaders. Other employees manoeuvred and
conspired to avoid joining those in the category of ―losers‖ or ―chumps‖. Most critically, with
so much effort invested in face saving and self enhancement, the destructive practices of
Enron‘s leadership remained unchallenged, while a destructive corporate culture took
deeper root.
Conclusion
This paper has argued that many of the dynamics found within Enron resemble those of
organisations generally regarded as cults. In particular, it has described the existence and
the downsides of charismatic leadership, a compelling and totalistic vision, intellectual
stimulation aimed at transforming employees‘ goals while subordinating their ethical sense
to the needs of the corporation, individual consideration designed to shape behaviour, and
the promotion of a common culture which was increasingly maintained by punitive means.
The one exception is that, as the general literature testifies, cult members donate most of
their money and possessions to their chosen cause. They endure great hardship. Enronians,
by contrast, were well paid, with the promise of much greater wealth to come. On the other
hand, most saw their retirement savings wiped out in Enron‘s collapse, lost everything they
had invested in its shares and received nothing more than a $4000 severance payment
when it filed for bankruptcy, while top managers were paid exceptionally generous retention
bonuses (Watkins, 2003b.). Overall, the organisational culture strongly resembles that of
many well known cults, as does the behaviour of Enron‘s leaders.
There have been many attempts to portray the Enron scandal as a one off or at least rare
occurrence. In particular, President Bush characterised it as the product of poor behaviour
by a few ―bad apples‖, and therefore as an exceptional event (Conrad, 2003). Others have
noted that many business commentators have effectively used Enron as a ―scapegoat‖,
standing as a surrogate for a wider corporate malaise that is hence denied (Hensmans,
2003). In even more optimistic vein, as Deakin and Konzelmann (2003) have critically
observed, the exposure and then collapse of Enron has been used by some to argue that we
can be more confident in corporate America and its regulatory regimes. In line with the
reasoning of the latter authors, our own position does not support such an optimistic
interpretation of events.
In particular, recent years have witnessed an extraordinary growth in the power of CEOs,
while the power of employees has declined (Mintzberg, 2004). But a corollary of great
power is the anticipation of miraculous results. Such expectations are magnified in a context
of social despair or helplessness (Gemmill and Oakley, 1992). Imperial CEOs, all too aware
of the limited opportunity they are now afforded by the stock market to make a dramatic
difference, may be tempted to resort to the theatrical approaches typical of cult leaders,
and which were certainly the norm at Enron. In the process, they encourage conformity and
penalise dissent. Yet the evidence indicates that effective leaders need to do the opposite,
and in particular should ―encourage constructive dissent, rather than destructive consent‖
(Grint, 2005). Enron suggests that many if not most leaders have yet to grasp this point,
with potentially catastrophic results for their organisations.
Thus, more leaders are attempting to bind employees to the corporate ideal, while curtailing
forums for debate. They project an image of charismatic leadership, stress a compelling
vision, depict their companies as a surrogate family and attempt to blur any perceived
difference between the interests of managers and non-managers (Biggart, 1989). As an
example of where this may lead, there has been a growing interest in ―Spiritual
Management Development‖ (Bell and Taylor, 2004). Within this paradigm, trainers attempt
to release managers from ―negative thoughts‖, ―fears‖ or ―barriers‖, which impede the
development of a successful corporate culture (Heelas, 1992). Such approaches seek to re-
engineer the most intimate beliefs of employees, so that they are aligned with whatever the
