Basic Organizational Forms: A Second Look

The concept of basic organizational forms is useful to the analysis of an organization’s nature because it details how the fundamental structure of a company impacts its information processing and goal setting behavior. Identifying the difference between unified and multiplex modes of organizing, there are a number of basic organizational forms that have been established as capable of adding to a company’s ability to deal with raising information processing demands. The contrasts between these forms helps one to realize that different organizations will have to cope with the increasing need for information processing in varying manners. Making it possible for the organizational theorist to analyze how a company’s complex goals are formed by the manner in which its structures cause information to be processed. However, as times change, so to do the forms organizations take; meaning that this concept needs to be updated to remain a useful tool of analysis.

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Don’t Let the Media Distract You

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The issues facing contemporary America are numerous and diverse, including two wars over seas, a national debt around 12.8 trillion dollars and climbing, and the worst economic recession since the Great Depression. Yet, what do the American people focus on? In the recent past our focus was on Briteny Spears and her drug problems; then the death of Anne Nicole Smith, which dominated American media coverage for weeks. Today it’s the NFL draft that is the center of attention. Tomorrow our focus might be on the latest episode of Lost, the NBA playoffs, or some other distraction. Still, No matter how entertaining as these events are, the degree of focus placed on them displays the American tendency to focus on the what the media most heavily covers. This tendency has resulted in society ignoring important issues that affect America, but don’t receive a great deal of news coverage. Consequently, America is now faced with the problem of having a society that is content do be distracted.

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Further Research: Alan Greenspan’s Take on the Causes of the Recession

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In preparing to write the final paper I have come to the conclusion that I desire to focus on how the actions of economists and large firms like Lehman Brothers led to the current economic recession. My preliminary explorations suggested to me that both economists and Firms like Lehman brothers had a sense that the market was now safe and that they could predict its course of action with ease. As I mentioned in my post last week, the belief that the market had become “inherently stable” led market actors to make decisions that ultimately resulted in financial crisis. Moving forward, I want address the question of why they acted in the manner they did in a little more detail, but more importantly I want to understand how the actions of economists and large firms caused the market to collapse. In addition, I want to see if there was a chance to avoid this recession by looking at the case of Lehman Brothers and exploring their organizational actions prior to the recession; hopefully enabling me to identify points in time where actions could have been taken to avoid the downturn, what those actions were, and who should have undertaken them. However, to do so I still need to look more deeply into the causes of the recession.

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The Great Recession: Making Fools of Economists

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“The state of the economy is good… The battles of yesteryear [are] over” – 2008, Olivier Blanchard: Chief Economist at The International Monetary Fund

“The central problem of depression-prevention has been solved”  – 2003, Robert Lucas: University of Chicago

The overconfidence of economists, as displayed by the quotes above, in the state of the macroeconomy prior to the Great Recession illustrates one of the central causes for the current economic downturn. The belief that economic problems had largely been solved led economists to idea that they could predict the market’s behavior; creating the perception that their risk was largely mitigated by this ability. So strong was their belief in the success of their field that economists claimed the markets were too inherently stable for any unforeseen downturn in the economy. We know better now however, and the economists who brazenly denied the possibility of a significant recession have been forced to swallow their words as the economy fights the greatest downturn since the Great Depression. Still, the economists were not the only individuals who held the belief that their ability to predict the movement of the “inherently stable” market allowed them to remove large amounts of risk.

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Lou Pai: The Only Guy Who’s Ever Been Lucky to Get Divorced

One of the lucky few Enron executives to escape without criminal prosecution, Lou Pai has been referred to as “the only guy who’s ever been lucky to get divorced.” Why was Lou Pai so lucky to get divorced? How did his wife’s discovery of his many year-long affair with a stripper, and their child out-of-wedlock, turn out to be a good thing for Pai? The answer is timing so perfect it almost seemed planned.

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Researching: A Little Help Goes a Long Way

The information gathering process involved in the type of research necessary to gain a better understanding of complex topics, like the fall of Enron, can be a time-consuming and frustrating process. The temptation can become to use sources like Wikipedia, the internet, and Google without anything more to support your conclusions (the WIGWAM trap). However, giving in to this temptation ultimately leads to a lack of depth in one’s true understanding of a topic. Consequently, it is necessary to complete  research in a full and through manner. Doing so does not have to be a frustrating process though, and a little help can go a long way in ensuring that one can complete their research in a painless and efficient way.

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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.

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