Exploring the distinctions between a high performance culture and a cult

Bert Spector (Associate Professor, College of Business, Northeastern University (b.spector@neu.edu). His most recent book is Implementing Organization Change: Theory and Practice (Prentice‐Hall, 2006).)
Henry Lane ((Harry) Lane is Darla and Frederick Brodsky Trustee Professor in Global Business, College of Business, Northeastern University (ha.lane@neu.edu). He recently co‐authored the fifth edition of International Management Behavior (Blackwell, 2005).)

Strategy & Leadership

ISSN: 1087-8572

Publication date: 15 May 2007

Abstract

Purpose

Challenges the popular explanation for Enron's failure as being simply about financial reporting or criminal behavior and offers a more subtle and complex explanation.

Design/methodology/approach

With a framework developed from the literature on cults and cult behavior as well as secondary research, the authors develop the perspective that Enron's senior leaders created an organization that encouraged executives to act in ways that were criminal. Five characteristics of cults: persuasion, isolation, elitism, charismatic (and dogmatic) leadership and wealth not benefiting group members were found to apply.

Findings

The major differences between a high performance organization and a cult were transparency, accountability and dialogue.

Practical implications

It highlights the small difference between a high performance culture and a cult and raises “red flags” or warning signs for executives to be aware of. Executives looking for long‐term outstanding performance through high levels of social cohesion and strong behavioral norms need to be aware of the cult trap.

Originality/value

There are important management lessons from the Enron story that transcend accounting and financial reporting techniques and lessons beyond the illegal behaviors. It provides an understanding of how an organization's culture and systems can lead to cult‐like behavior and encourage employees to act in illegal ways.

Keywords

Citation

Spector, B. and Lane, H. (2007), "Exploring the distinctions between a high performance culture and a cult", Strategy & Leadership, Vol. 35 No. 3, pp. 18-24. https://doi.org/10.1108/10878570710745794

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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