The Organisational Culture At Enron Corporation Commerce Essay

The Organisational Culture At Enron Corporation Commerce EssayThis paper analyses the Enron presidency finish and the key issues that eventually led to the Enron Corporate licking and why it is so vital that top level management is the main proponent of this culture shaping lower level employees behaviour of moral reasoning. Moreover, as there is a need to understand how the different types of cultures may effortlessly admirer furrow to perform, this essay will identify the type of Enrons bodily culture th unsmooth applying the assessment instruments demonstrable by Cameron and Quinn (1998).In todays care environment the culture has huge impact on organizations performance. It is widely recognized by the managers, that the borrowing of organisational culture as an effective control tool, gives the opportunity to affect on what quite a little think, believe and value (Ray, 1986).It is commonly known that different organisations have veritable(prenominal) cultures. The cultu re of a group can be defined as A pattern of shared basic assumptions that the group learned as it solved its problems of extraneous adaptation and internal integration, that has worked well enough to be considered valid and therefore, to be taught to new members as the correct way to perceive, think, and feel in apprisal to those problems ( Schein, 1993 pp373-374). Organisations develop their own culture through history and structure that gives a sense of identity. Therefore, every culture beares its own traditions, knowledge, art, moral issues, law, customs, and any other capabilities and habits acquired by individual as a member of society (Tylor, 1970).It ascertains, through the beliefs, values and norms the way how things are done around here (Mullins, 2002 p802). Organization theory scholars tag that organizational cultures associate to the concept of an organization. However, Huczynski Buchanan (2001 p627) argue that the facade symptom of culture are its most visible and most accessible forms, which are the visible and loud behaviour patterns and objects. In the racing shell of Enron, the analysis for the friendships lowfall moved well beyond financial and economic debate as the corporate culture was shown to be a main reason and contributing issue (Rapoport Dharan, 2004). The society got a shockwave when it came to that Enron was seen to be an example of corporate citizenship and ethics previous to its fall down (Sims Brinkmann, 2003) musical composition in reality the conjunction was cheering a culture for back-biting management possessed with exhibiting short-term profits and inflating the companys stock value. Sims and Brinkmann (2003) point out that this difference between the culture shown to the public and investors and the values being enacted within the organisation is an example of the conflict that can be found between levels of culture within an organisation as suggested by Schein (1985). Conducting the further analysis of the En rons downfall it is vital to identify the organizational culture that the company could be identified with. Hence, in accordance to Cameron and Quinn (1998) and their developed marking criteria, there are four types of organisational cultures identified which include collaborate (clan), create (adhocracy), control (hierarchy) and compete (market) cultures. After close research and analyse of the types of organisational cultures and relating the criteria to the faux pas study it shows that Enron applied a compete culture, which to some extent, brought the company to downfall.Compete (market) organizations are focused on relationships- in particular, transactions-with suppliers, customers, contractors, legislators, consultants, regulators, etc. Through efficient external dealings they feel that they can best achieve success. Compete (market) organizations are concerned about competitiveness and efficiency through accent on partnerships and emplacement (Cameron and Quinn, 1998). Enro n executives spent more time distressing about reputation and getting ahead than trading with the everyday business processes needed to prolong the company.The top managers believed Enron had to be the best at everything it did. When there existed failures and losses in their business performance, what they did was covering up their losses in order to protect their reputations instead of trying to do something to make it correct. In the case of Enron, the mutual goal of winning that is frequently anxious in compete culture organizations, did not translate past rough business deals and unethical business practices.In Enrons case, its corporate culture played an important role of its collapse. It was culture of greed and moneymaking In Enron, greed was obedient and money was God. There was a little regard for ethics or the law. Such attitudes infused the whole company from the top down to individual workers. Organisational culture back up unethical practises- corruption, cheating, and fake practices were widespread. Many executives and managers knew that the company was following some ill-gotten and unethical practices, but the executives and the board of directors did not know how to make the ethical decisions and corporate ethical culture. Creative accounting and misleading profit reports were a matter of everyday procedure. Denial and reputation management enabled them carry on their unethical and lots illegal activities. In addition, if the company makes huge profits in unethical way then individual who joins the organisation would also have to practice unethical things to survive in the company. The management was blinded by greed and ambition, their decisions became seriously flawed. Thus company fell back and managers had to pay in the form of fines and imprisonment. Thus, cut to organisational culture and mismanagement in huge proportions and, mainly, greed is among the key factors that brought the Enron the most innovative company to downfall. Enr on was looking into the ways of getting bigger, greater and more liberalist than the other companies at that time. And it seemed to be really well on the way to that target. However, the analysis of Enrons organisational structure reveals that top managers of any organisation at all clock must be responsible of everything that happens in their company. Hence, the Enrons top manager (Kenneth Lay) did not have his objectives, right interest and mission in the organisation. But the success of the business depends on the executives abilities to leadership, influence on others and how the real interests and goals are followed by. K. Lays position as a chairman was just a title for the company and as leaven of that is the action of passing along the responsibilities to the Jeff Skilling. That could be seen as the countdown of the organisational structure breakdown which is related as the key issue to all the businesses.A wise decision-making abilities and acquisition of organisational objectives truly correlates with the companys organisational structure. In Enron case, people responsible for making such wise and important decisions were obviously those from the top of the management however they did not really possess any of the productive objectives in their minds. The final decision-making was left for the chief financial and chief operating officers whose efficiency, in the other hand, excluded any sense of any variety show of the responsibility for the consequences could occurred. The basic interest, as it seems from the case study analysis, was the financial profit- money.Thus, decision-making was easily blinded with the quantity of the business deals made and money seen, without any of the consideration of the time to come problems of the organisation, such behaviour could cause. According to Reh (2002), It is the leaders job to provide the vision for the group. A good executive must have a dream and the ability to get the company to support that dream. But it is not enough to merely have the dream. The leader must also provide the framework by which the people in that organization can help achieve the dream. This is called company culture (p.1). Generally, corporate culture refers to the prevailing implicit values, attitudes and ways of doing things in a company. It frequently reflects the personality, philosophy and the ethnic-cultural background of the founder or the leader. Corporate culture dictates how the company is run and how people are promoted (Wong, 2005, p.185).The leadership of the Enron could not cope with providing the guidance to help the business to survive. Hence, that is the clear evidence that Jeff Skilling proclaimed the Enrons corporate culture- the culture of greed, corruption and deception. He wanted profits at all cost, in addition the hiring practices became haunt with finding aggressive, greedy, unethical employees who could deliver on the organisations demand for short term profits. There is a direct connection between the way a business and its people conduct themselves and the leadership within it. There was no respect or responsible decision-making in the Enron. The management of the organization was totally broken down by the companys executives, who displaced their responsibilities to unprofessional staff and there was no rigorous standart of the performance for their business. The senior management failed to maintain a relationship of openness and trust with employees. ply members who questioned the wisdom of some of Enrons decisions and practices were either ignored or silenced. Senior management cared more about self-enrichment than the needs of employees. They showed little regard for meaning and ethics beyond the bottom line (Wong, 2005, p.185).And when the top managers turned a blind eye on the legal aspects when performing financial operations, the clear message of the tolerance of the illegal practices was sent.After analysing the case study I suggest that the most important lesson is that corporate culture matters it can either bring prosperity or misadventure to the organization. A company needs to promote an organisational culture with moral way of thinking as Peters Waterman (1982 p75) points out that without exception, the dominance and coherence of culture proved to be an essential quality of the excellent companies. This culture should be top level management as they are key figures, which employees will follow. If executives of a company consider the short term bottom line to be the most important factor to success then lower level employees will currently get the message and acquire the game rules. This environment is exposed to the actions such as intentionally breaking the rules, if results cannot be achieved within the legal framework.From studying the Enron case it is seen that collapse was brought on by a lack of respect, lack of concern of management and real goals. To point out that the enormous amount of losses of the co mpany destroyed the lives of the Enrons employees and the investors who trusted and heavily invested in the business. After all taking on to account that organisational culture is able to bring an enormous difference and engineer the organisation to success and prolong reasonable rewards (Hoecklin, 1995) by possessing effective management (Miroshnik, 2002), the Enrons example demonstrates that when there is unhealthy corporate culture in the company which lacks the veritable leadership, true interests, true goals, wise decision-making and the main issue is greed for money, then such a business is exposed to become the bankrupt.