How Can Leadership Negatively Affect the Success of a Company? (Essay Sample)

Student’s Name Professor’s Name Course Date How Can Leadership Negatively Affect the Success of a Company? Leadership is the central force that determines organizational performance. Apparently, every company understands the need for good leaders in its administration. This means that leadership holds the future of every firm. Bad leadership remains a point of focus when investigating and evaluating the causes of poor performance in a designated company. One way in which bad leadership can undermine the success of a company is through adopting unethical accounting malpractices—such as false error reporting—that lead to legal actions against the company and, consequently, assets loss and permanent closure. Unethical leadership allows administrators to embrace unorthodox management practices. Yu and Rha argue that unscrupulous managers may adopt accounting malpractices in the hope that falsified financial records would bolster profits (24). In a real sense, leaders who embrace unethical bookkeeping practices expose their companies to an unsurmountable risk of litigation and, thereafter, stern regulatory actions (Wang and Duo 12). For instance, in 2001, Enron—an American Energy Company—plummeted from a $34 billion-dollar firm to bankruptcy after the management was found guilty, through a financial audit, of practicing the fraudulent false error reporting technique to evade taxes. While the company’s leadership envisioned growth in profits, its unethical approach led to the subsequent seizure of the firm’s assets, hence leading to its eventual insolvency (Cuong 589). This evidence affirms that bad leadership can undermine the prosperity of a company by exposing its assets to counter-productive regulatory scrutiny and, consequently, closure. To sum up, this discussion has elucidated a way in which leadership can undermine the success of a company and has maintained that, indeed, an unprofessional administration can expose a firm to audits, legal actions, asset recovery, and closure. Although some leaders may, intentionally, act unethically to realize operational growth, such decisions usually culminate in a horrid encounter with regulatory agencies. T...