August 31, 2010
The failure of Enron was predictable in light of its organizational structure and management styles. Poor management selection, disregarding prior illegal acts, and ignoring numerous warning signs all contributed to the failure of Enron. By recruiting honest employees and establishing strong leaders, companies can develop a strong organizational structure.
What Happened at Enron
The failure at Enron began when investors, bankers, and credit rating agencies lost confidence in the company and plunged it into a liquidity crisis. According to reports, the crisis might have been averted if top-level management had better ...view middle of the document...
The most efficient structure depends on the industry in which the organization operates. Additionally, a design structure should evaluate control, types of formalization, decentralization, planning systems, and matrix structures. According to Mintzberg, Lampel, Quinn and Ghoshal (2003), â€œthese and other elements of organizational design should logically configure into internally consistent groupings.â€
Leadership and Management at Enron
Organizational behavior is the study of employeeâ€™s actions and how those actions influence the company. These influences can improve the companyâ€™s effectiveness and productivity (Robbins & Judge, 2007). Todayâ€™s workforce is changing dramatically, with increased women workers, foreign nationals and individualâ€™s working longer hours. With such great changes, understanding organizational behavior has never been more important for managers.
Leaders within an organization have the ability to influence collogues leading to enthusiastic commitments or indifferent obedience (Yukl, 2006). As leaders within a firm, managers have the responsibility to maintain a code of ethics at all times. Mangers need to provide an ethical work environment, which allows employees to work productively without wasting time deciding what constitutes right and wrong behavior. This behavior will be mirrored by employees and ensure the firm maintains an honest relationship with stockholders, directors, and top-level management. The company should offer training, seminars, and workshops to improve ethical behavior and stress the importance of maintaining this behavior at all times. Additionally, managers have the responsibility to ensure the company is functioning properly and that itâ€™s...