Shared Activity Unit 3: Enron Case
Enron was the first nationwide natural gas pipeline network in the United States. As the company grew, executives shifted the company's primary focus from energy delivery and infrastructure to investing in the stock market. As a result of its new focus, Enron's recorded revenues grew from under $10 billion in the early 1990s to $139 billion in 2001, which garnered successful reviews from all observers including those on Wall Street. In fact, in 2001, Enron was no. 5 on the Fortune 500 list (Jickling, 2003).
Enron did not always invest in successful business ventures, such as the dot-com investments in Internet and technology in the late 1990s. Due to its unprofitable ventures, Enron experienced significant losses in 2000. Instead of accurately reporting the trading profits from its energy ventures and losses from others, Enron falsified its accounts to public investors. In just a matter of months, Enron went from one of the fastest-growing organisations to filing bankruptcy. Ultimately, shareholders, including thousands of employees who held stock as part of their pension, lost billions of dollars because the stock became worthless (Jickling, 2003). Consider the internal conflicts that resulted from such personal, financial loss.
In this Shared Activity, you review the Enron scandal and consider how power, politics and conflict might have influenced the decisions of its executives. Do you believe HRM approaches could have been employed to prevent this conflict? If so, how?
References
Jickling, M., (2003) The Enron Collapse: An Overview of Financial Issues, Congressional Research Service, The Library of Congress, CRS Report RS21134, Washington, DC, Available at: https://royce.house.gov/uploadedfiles/rs21135.pdf, (accessed: 19/12/12)
To prepare for this Shared Activity:
- Review the Cohan (2002) case study and the other Learning Resources.
- Reflect on the relationship between power, politics and conflict and how it may have impacted the Enron scandal. Then, consider how HRM approaches may have assisted through conflict resolution or the application of new approaches to change the outcome.
To complete this Shared Activity:
- Post an entry from the perspective of an Enron manager and address the following points:
- Explain the relationship between power, politics and conflict at Enron.
- Explain how HRM approaches could have been utilised to assist employees through conflict resolution and why. Then, explain what HRM approaches could have been adapted that might have changed the outcome in this case.
- Explain what HRM approaches could be adapted or employed at Enron to build a more ethical organisation.
- Respond to your peers' posts from the perspective of an HR professional and critically analyse the role of the Enron manager in conflict resolution. Give examples of how the approaches identified by your peer could both support and hinder the role of HR in this example.
- Support your Shared Activity with current academic literature beyond your Learning Resources.
Participate in this Shared Activity only during the period of this unit to ensure that you and your colleagues can keep track of one another's postings and maintain a focused, collaborative discussion. Review the Syllabus and Shared Activities Rubric for information on how your contributions to the Shared Activities will be graded in this module. In each unit, you will receive feedback from your Faculty Member on your participation in the Shared Activities, focusing on your contributions to the learning community. In Unit 6, your Faculty Member will provide final feedback and a final grade on your Shared Activity contribution throughout the module.
To complete your Shared Activity, click on Shared Activities Forum on the Module Menu, and select your Group's Discussion Board area, then select 'Unit 3 Shared Activity' to begin.
Individual Assignment Unit 3: Power and Politics in Your Organisation
The historic Enron Scandal of 2002 highlights the devastating effects of power, politics and conflict, as well as how quickly a successful organisation can fall. Therefore, your scenario organisation asks you to examine the influence of internal power and politics within the organisation in order to prevent a similar conflict. The organisation is concerned that with the upcoming transition there may be employee dissatisfaction due to perceptions of unfair treatment and inequality of benefits for current employees.
The complex relationship of power and politics includes legal, economical, social and psychological dimensions. As a consultant, you know that an organisation's actions, whether intentional or merely perceived, can create dissatisfaction among employees (Wilton, 2011). Sometimes there is a fine line between misperception and deception. Therefore, consider the role that power and politics plays within your scenario organisation and specifically focus on the human resource processes, such as recruitment and promotion. For example, consider the role politics might play in deciding to recruit external versus internal candidates and the effect that can have on existing employees. Consider an employee that believes a co-worker was unfairly promoted and the effect that might have on existing relationships. In this Individual Assignment, you will analyse the impact of power and politics and recommend human resource processes to minimise conflict.
References
Wilton, N., (2011) An Introduction to Human Resource Management, Los Angeles: Sage
To prepare for this Individual Assignment:
- Review the Unit Introduction and the Learning Resources.
- Think about the potential influences that power and politics may have on your scenario organisation. Consider all perspectives, including the organisation's employees, managers and human resource professionals.
- Consider the processes you may recommend to minimise power and politics in your scenario organisation.
To complete this Individual Assignment:
- Write a summary in which you critically discuss the potential influences of power and politics that can affect your scenario organisation. Explain the issues of power and politics that may arise within and across teams as a consequence of the pending changes in your scenario organisation. Include how power and politics might influence employees and managers.
- Explain how power and politics might influence human resource processes, such as recruitment, selection and promotion in the organisation.
- Explain two human resource processes you would recommend to a staff manager to minimise power and politics in the organisation. Please include a detailed description of steps you would include in your recommended processes.
- Support your Individual Assignment with current academic literature beyond your Learning Resources.
Note:
Be sure to include references to all sources, including your Learning Resources, in Harvard format.
You should fully state and justify any assumptions that you choose to make in relation to your scenario organisation. Please recall any previous assumptions that you made about your organisation so that they will not conflict while preparing your Final Project. You will include information from this Individual Assignment within Section 2 of your HRM Consultancy Report. You will receive feedback on this work from your Faculty Member, and you will be expected to incorporate any suggestions into your Final Project.