nron Corporation was launched in 1985, with the merger of Houston Natural Gas and InterNorth, a Nebraska company. In 1990, Enron—which was just a natural gas transportation company at the time—started a new division to trade natural gas. The company went from being a “stodgy” gas pipeline company to being a “world-class” company overnight.  Enron soon became a $55 billion empire, trading gas, electricity, minerals, water, paper and broadband capacity. A critical part of Enron’s success was the company’s employee value proposition (EVP). The EVP focused on Enron as a dealmaker and was designed to attract the top talent the company needed to continue to move it forward. The EVP provided employees with the opportunity to do something “big” and to change how business was done in other industries.  Jobs were restructured to give employees a lot of elbow room and headroom.  Traditional gas pipeline employees were not the employees needed for this new, never-before-tried venture. Internal job movements at Enron were an important part of the EVP.  Managers were strongly encouraged to allow employees to move within the company.  The goal was to not hold anyone back.  When the Global Broadband unit was launched, 100 top performers from around the company were brought together in Houston. By the end of the day, 50 had been recruited for the new project.  Overall, the recruiting strategy focusing on internal recruitment paid off.  The business continued to grow and attract entrepreneurial employees. The company that thought it had nowhere to go but up came crashing down in 2001, when it was charged with illegal activities.  By 2004, Enron’s corporate officers faced numerous charges of wrongdoing, and the company was a shell of its former self.  Managers were charged with manufacturing profits, hiding debt, and bullying Wall Street to buy into its questionable accounting and investment practices.  An extensive amount of downsizing had occurred, and many employees had lost all of their retirement savings after Enron’s stock collapsed.  Faced with bankruptcy and a sullied reputation, the company struggled to continue but finally made the decision to cease to exist once all litigation concludes. At one time, Enron’s recruiting efforts were described as a model for other employers.  Enron portrayed itself as an exciting company with lots of growth opportunity—a firm in which employees experienced a great deal of autonomy and responsibility. DISCUSSION QUESTIONS 1. Enron did a lot of things right from a recruiting standpoint.  Discuss its recruiting strategy and why it worked. 2. Do you think that Enron’s overall recruitment EVP and strategy played any role in the problems that resulted at Enron? If so, what and how? 3. Discuss why it’s important to create a recruiting message that’s attractive but that doesn’t “oversell” the company. 4. Assume that in a few years Enron decides to reconstitute itself in some form.  Develop a recruiting strategy that the c.

1. nron Corporation was launched in 1985, with the merger of
Houston Natural Gas and InterNorth, a Nebraska company. In
1990, Enron—which was just a natural gas transportation
company at the time—started a new division to trade natural
gas. The company went from being a “stodgy” gas pipeline
company to being a “world-class” company overnight. Enron
soon became a $55 billion empire, trading gas, electricity,
minerals, water, paper and broadband capacity.
A critical part of Enron’s success was the company’s employee
value proposition (EVP). The EVP focused on Enron as a
dealmaker and was designed to attract the top talent the
company needed to continue to move it forward. The EVP
provided employees with the opportunity to do something “big”
and to change how business was done in other industries. Jobs
were restructured to give employees a lot of elbow room and
headroom. Traditional gas pipeline employees were not the
employees needed for this new, never-before-tried venture.
Internal job movements at Enron were an important part of the
EVP. Managers were strongly encouraged to allow employees
to move within the company. The goal was to not hold anyone
back. When the Global Broadband unit was launched, 100 top
performers from around the company were brought together in
Houston. By the end of the day, 50 had been recruited for the
new project. Overall, the recruiting strategy focusing on
internal recruitment paid off. The business continued to grow
and attract entrepreneurial employees.
The company that thought it had nowhere to go but up came
crashing down in 2001, when it was charged with illegal
activities. By 2004, Enron’s corporate officers faced numerous
charges of wrongdoing, and the company was a shell of its
former self. Managers were charged with manufacturing
profits, hiding debt, and bullying Wall Street to buy into its
questionable accounting and investment practices. An extensive
amount of downsizing had occurred, and many employees had
lost all of their retirement savings after Enron’s stock

2. collapsed. Faced with bankruptcy and a sullied reputation, the
company struggled to continue but finally made the decision to
cease to exist once all litigation concludes.
At one time, Enron’s recruiting efforts were described as a
model for other employers. Enron portrayed itself as an
exciting company with lots of growth opportunity—a firm in
which employees experienced a great deal of autonomy and
responsibility.
DISCUSSION QUESTIONS
1.
Enron did a lot of things right from a recruiting standpoint.
Discuss its recruiting strategy and why it worked.
2.
Do you think that Enron’s overall recruitment EVP and strategy
played any role in the problems that resulted at Enron? If so,
what and how?
3.
Discuss why it’s important to create a recruiting message that’s
attractive but that doesn’t “oversell” the company.
4.
Assume that in a few years Enron decides to reconstitute itself
in some form. Develop a recruiting strategy that the company
could use to attract employees.
Tip:
To respond effectively to these discussion questions, students
need to distinguish between effective recruitment strategy and
ethical business practices. The two are by no means mutually
exclusive. Enron’s recruitment strategies were laudable at the
same time that their unethical practices were deplorable. A
good resource to enhance students’ understanding of the

3. recruitment dynamics and culture at Enron is “Management
controls: the organizational fraud triangle of leadership, culture
and control in Enron,” by Clinton Free, Norman Macintosh and
Mitchell Stein in Ivey Business Journal Online July-August,
2007.
Sources
: Based on Michaels, E., Handfield-Jones, H., & Axelrod, B.
The war for talent. Boston: Harvard Business School Press,
2001; Swartz, M., & Watkins, S. Power failure: The inside story
of the collapse of Enron. New York: Doubleday, 2003; and
Enron Web site, www.enron.com.