Control and Enron

The concepts of control systems and power are useful to consider when further analyzing Enron. Control is important in any organizational setting because it creates the ability to pursue a company’s goals in a directed manner. Control systems therefore need to be clearly established in an organization to implement control properly. Based on the power  structures with in a company, these systems need to operate correctly to prevent abuses and inefficiency within an organization. Consequently it would be interesting to look into the control systems and power structures with relation to Enron.

I was inspired to look at these factors in relation to Enron because I feel that it takes more than just individual greed to collapse a company the size of Enron. While the individuals responsible for Enron’s collapse were greedy and self-serving, the argument can be made that most executives are. Why then did the Enron executives’ actions have such profoundly negative effects? It would seem that the control systems in Enron were so flawed that they not only failed to prevent the harmful actions of the executives, but that they also allowed for the creation of an environment that disregarded the companies best interests. The control systems can be seen as lacking the power to motivate participants within Enron to move towards solid goals in a beneficial way. Instead, the health of the company as an entity was ignored in favor of the appearance of health, in order to allow individual participants to pursue their own selfish goals.

In Organizations and Organizing Scott and Davis support the idea that properly implemented control is a necessity. Still, to get a better idea of the issue I did some research on an Author, by the name of [wordy] Amitai Etzioni, that Scott and Davis cited in their discussion of control systems. Upon Further research, it became clear that a large number of other authors had also cited the Etzioni. Specifically, Etzioni’s work, which was cited by Davis and Scott, titled “Modern Organizations” is cited numerous times by many different authors. For example, one author, Crane Desmond, addresses issues morality in his work that cites Etzioni. Consequently, I learned through my research that there are aspects of the control system perspective that can apply to the actions of a company like Enron, and their morality in specific. Ultimately, this seems like a line of thought that would be interesting to continue to follow.

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3 Responses

  1. In the black!

  2. What does issue morality have to do with control systems? I would love to know what the article says.

    I agree with you that the control systems is an interesting piece of the Enron story. I think it can be very useful to look at how control systems encode or embody certain moral stances or value systems.

    I wonder if the work by Robert Jackall would be useful.

  3. […] Control and Enron […]

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