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ABSTRACT. This paper describes and discusses theEnron Corporation debacle. The paper presents thebusiness ethics background and leadership mechanismsaffecting Enron’s collapse and eventual bankruptcy.Through a systematic analysis of the organizationalculture at Enron (following Schein’s frame of refer-ence) the paper demonstrates how the company’sculture had profound effects on the ethics of itsemployees.Now, when most people hear the word “Enron”they think of corruption on a colossal scale – acompany where a handful of highly paid execu-tives were able to pocket millions of dollars whilecarelessly eroding the life-savings of thousandsof unwitting employees. Not long ago, the samecompany had been heralded as a paragon of cor-porate responsibility and ethics – successful,driven, focused, philanthropic and environmen-tally responsible. Enron appeared to representthe best a 21st century organization had tooffer, economically andethically. The questionsbecome, how did Enron lose both its econom-ical and ethical status? Is it because of its very sizeand effects? Is it the direct harm to primary andsecondary stakeholders? Or, is it the worldwidemedia coverage that the Enron demise hasdrawn? These questions make the Enron caseinteresting to us as business ethicists. At first sight, Enron looks like a mega-sizeillustration of the bad apple and/or the bad barreldisease and, hence, looks like good marketing forthe business ethics business (which almost has avested interest in such scandals and other badexamples). The problem is, however, that Enronlooked like an excellent corporate citizen, withall the corporate social responsibility (CSR) andbusiness ethics tools and status symbols in place.Enron Ethics(an ironic expression which isused now and then, see e.g. the headings ofTracinski, 2002 or Berenbeim in Executive actionno. 15, Feb. 2002) reads like thenew catchwordfor the ultimate contradiction between words anddeeds, between a deceiving glossy facade and arotten structure behind, like a definite good-byeto naive business ethics. Enron ethics means (stillironically) that business ethics is a question oforganizational “deep” culture rather than ofcultural artifacts like ethics codes, ethics officersand the like. With this as a backdrop, the paperwill describe and discuss how executives at Enronin practice created an organizational culture thatput the bottom line ahead of ethical behavior anddoing what’s right. More specifically, the paperfirst provides a brief background on Enron andits rise and fall. Next, the paper systematicallyuses Schein’s (1985) five primary mechanismsavailable to leaders to create and reinforce aspectsof culture (i.e., attention focusing, reaction tocrises, role modeling, rewards allocation andcriteria for hiring and firing) to analyze thecompany’s culture and leadership that con-tributed to it’s ethical demise and filing for bank-ruptcy. It is our contention, that with such apoint of departure one will be better prepared