Bad practices in companies and their underlying mechanisms. The case of Enron

The management of Enron incorporated bad practices that were partly responsible for the spectacular rise and fall of the company. How and why could these practices become established? To answer this question we examine four behavioral mechanisms and demonstrate their effects using Enron as an example. However, their presence is more widespread and the insights gained from analyzing this particular case are useful for understanding bad practices in other organizations. We focus on mechanisms, a methodological approach that has been used sparingly despite its high explanatory power. The article is concerned explicitly with managers as a social group with discretionary power. This group deserves scholarly attention when analyzing how practices become established in an organization.