Theatrical Fagades and Agents in a Synthesized Analysis From Enron Theatre; Implications to Transaction Cost and Agency Theories

Abstract

The Enron collapse highlights the need to study how corporations implement strategy. How was Enron so successful in this age of free information? Our thesis is that Enron dramaturgically implemented strategy through associative delusion. Enron used theatre in three ways we term "Metatheatrical": (1) as a technology to persuade, or associate, (2) a fagade to deceive, or delude, and (3) a metaphor in the important sense of Shakespeare's Life is Theatre. Their use of theatrical tools has implications for agency and transaction cost theories in how organizations can reduce transaction and production costs. Our synthesis contributes to the understanding of organizational boundaries through the development of winning scripts.