Prioritizing Short-Termism in Behavioural Strategy: Lessons from Enron – 20 Years On

Abstract

What are the risks of prioritizing short-term goals in corporate strategy against more long-term oriented (and hopefully sustainable) corporate performance? Through a qualitative case study narrative recalling some aspects of the sadly famous, but still insightful, bankruptcy of the Enron Corporation in the US (2001), this article aims at contributing to shed light on this lively research question within the international research on and practice of behavioural strategy. Given that, also currently, the seasons of corporate scandals do not seem to have ended, the main motivation behind this work is that the lessons which we could have learned after almost 20 years since the Enron seminal disaster occurred, can still probably have a value. In parallel, the main conceptual contribution offered by our case perspective is that, while the massive past and recent Enron's coverage has mostly devoted attention to the aspects of fraud and its associated business ethics, our analysis is, instead, focused on the corporate strategic orientation mainly deriving from the macho culture of the top executives. Of course, we are aware that concentrating on the latter cannot avoid acknowledging also the importance of the former. Furthermore, the case can also offer a methodological contribution; in fact, while much of the research in corporate governance has been implemented through quantitative techniques, scholars have also recently claimed that additional qualitative research is complementarily needed to reach a more exhaustive big picture on how executives behave.