Enron’s Words “Loosely” Linked to Their Actions

When most people imagine the structure a successful company their first thought most likely is the CEO, then the other chief officers of the company, the rest of the upper management, and then hierarchy that divides the company into subunits (divisions and departments).   Some people would expect there to be links between all the divisions of the company and be organized in a rigid and simple structure.  Though some businesses are structured this way not all are.  Enron was neither, one of those companies nor successful in any legal sense.

When reading The Smartest Guys in the Room, I kept wondering how Enron was able to function let alone survive while there was no easily discernible organizational structure.  In reality, this “lack” of formal structure was responsible for everything they accomplished, their survival, but most of all they eventually fall.  Their open system business structure utilized “loosely coupled systems” allowing links between subunits of the company and even between executives to vary in strength.  This created a very versatile organization, but at the same time with Enron’s weak management control the system was also inefficient and short-term oriented.  An interesting component of natural systems is its loosely coupled link between “talk” and “action” (Scott and Davis. Organizations and Organizing, p94) something that Enron is now well known for.

With this direction I want to further research and analysis the development of this structure within Enron.  When Ken Lay became CEO, the company seemed to have a more formal structure.  What caused the change?  Was it Enron’s environment, a deliberate move by management, or something else?  The answer to this leads to questions of why it changed the structure.  In order to do this I will use the libraries resources and The Smartest Guys in the Room to create a chronology of Enron specific to decisions that demonstrate and affect the organizations overall structure.

The small section on loosely coupled systems in Organizations and Organizing (Scott and Davis, p93-95) had a plethora of cited works pertaining to different components of the concept.  Using Google Scholar, even though part of the W.I.G.W.A.M (Wikipedia, internet, Google, without anything else), helped link me to two complete documents cited in the loosely couple systems sections.  Realizing that the library’s “Research by Subject” page would be more useful, I used it to look up articles that cited the sources from Organizations and Organizing.   I was able to find six good articles that cite one of my sources.  Pertaining to Enron and their organizational structure, I have only found one or two independent sources, but luckily The Smartest Guys in the Room is already a great source for a longer amount of this information.

Now I feel like I got my idea across, but if there are gaps or points that I should clarify I encourage you to comment and critique everything.  Any advice is good advice!


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: