The Types of Organizational Culture

After reading Chapter 3 of “Organizations and Organizations”, I chose to write about organizational cultures as one of my concepts.  Organizational culture shows a “group’s shared values, attitudes, beliefs, assumptions, artifacts, and behaviors” (Tharp 2).  Organizational culture reflects a broad spectrum of internal and external relationships and “guides individual actions even to the extent that members are not even aware they are influenced by it” (Tharp 2).  Chester Barnard believed that organizational cultures should have “motivating power and purpose” and use structure and procedures so that they become infused with value (Scott and Davis 72).  Barnard also recognizes “the importance of organizational cultures shaped by zealous managers supplying strongly held values to members” (72).  Strong organizational cultures include good environments and open communication.  Organizational cultures should function to support the organization in implementing its goals.

Organization theory scholars recognize that organizational cultures directly correlate to the performance of an organization.  In studying various organizations, scholars have determined that, in general, there are four types of organizational culture types, including control, complete, collaborate, and create (Tharp 2).

From Armani Suits to an Orange Jumper: How’s Old Jeff Doing?

Well it has been almost 7 years since the Enron debacle and about 4 years since Jeffery Skilling was sentenced to over 24 years in prison (late in 2006).  So I figured I would write my blog post on a sort of “catch up with Jeff” inquiry.  He was originally sentenced to a high-level security prison FCI Waseca (located in southern Minnesota), but has since been moved to a low-security prison (in Littelton, CO) since his previous home was being converted to an all women prison. 

Enron Tarnishes the Practice of Securitization

One of Enron’s greatest tools for making money and hiding and removing risk from their Annual Report was securitization (sort of).  The Enron crisis and bankruptcy brought to light many things about securitization, some good and some bad.  It was a wake up call to politicians, businesses, and scholars that securitization though beneficial has huge dangers.  This realization had some effects.

Incubating the Infidels!

The collapse of Enron in Houston left around 4,500 employees without a job. Enron was known for hiring some of the best and brightest candidates in the country, so despite involvement in the fraudulent downfall of this corporate giant, these jobless employees were very smart, accomplished individuals. However, their association with Enron after the collapse tainted their reputations making it very difficult for them to obtain jobs in the Houston area. Without an income, these employees realized that re-locating might be their only option if they wanted to continue supporting themselves and their families.

From Fraud to Freedom

Rebecca Mark seems to have traded in her business suits and stilettos.  Today, a more apt picture of her would be lounging on one of her huge ranches, basking in the glory of have exited Enron at precisely the right time.

My blog topic from last week centered on Mark and I have spent the past week writing an essay about her, so I figure I would check out what she is up to these days.  Never one known for resting on her laurels while at Enron, her post-Enron life has been pretty relaxed.

Multiple ways to attain a high share price

After seeing the negative consequences that occurred in the Enron scandal, many businesses have made an effort to change the way they operate in order to avoid similar results. Enron’s greatest downfall was that they focused only on attaining a high share price while failing to attend other important aspects of the business. There are other social, economic and environmental activities that could be measured in order to make positive impact on the business. Enron knew that their finances were being observed, measured and recorded by shareholders and Wall Street; therefore, they made all the possible changes or modifications in their financial statements to meet the high expectations of the market. As for the other activities mentioned, they could afford to slack off since they weren’t being measured. Seeing the negative effects by paying attention to this, there has been an effort by agencies to begin measuring these types of activities because they could become opportunities to create a sustainable business.  The Boston-based non-profit CERES formed The Global Reporting Initiative (GRI) in order to allow companies report their periodic social responsibility and environmental reports. The GRI was modeled after GAAP (Generally Accepted Accounting Principles) which is the standard framework of guidelines for financial accounting used in American companies. The GRI, on the other hand, has guidelines to measure environmental, social and economic reporting and give them the same importance as financial reports since these are aspects that could also influence investors. Eventually the GRI and GAAP could be combined to inform the company’s financial and non-financial outlook and make them both equally important for the success of the organization. In a wired world where people are better informed of the organizations activities, creating measurements for non-financial activities can also improve the share price of the company.

Richard Kinder: The Smartest Guy in the Room?

Richard Kinder is probably one of the forgotten names of Enron because he left the company long before things got out of control. Kinder was at one point next in line for the CEO throne, working as the company’s COO for six years and one of the main reasons for its success. Ken Lay himself had promised that he would step down as CEO when his contract expired at the end of 1996 and that Kinder would fill his position. However in 1996, Lay decided he was not ready to leave Enron and so Kinder left the company. This was a major turning point in Enron’s history. Although Kinder might have done some things that initially led Enron down in its road of financial fraud, nothing illegal happened on his watch. He was one of the few Enron executives who knew what the limits were and knew how to stay within them.

Enron Employees Lose Retirement… and Their Clothes?

“Playboy magazine is now doing a ‘Women of Enron’ pictorial spread. … Apparently the only thing these women have left to shred is their dignity.” —Jay Leno

When searching for answers to what Enron employees did after its demise, I was immediately drawn to this clip from The Daily Show. If you don’t believe them here is a link to Fortune500’s “Top Companies for 2002” where Enron is really listed as #5.  And yes, seven of the employees did pose for Playboy… there is even a documentary DVD about it.  Playgirl even decided to do a spread of Enron’s employees, just to be fair.  But what about the rest of the employees, you know the ones who didn’t know of Enron’s evils and didn’t want to show all?

Enron on Broadway: Maybe Lay, Skilling, and The Gang Will Have More Success on Stage…

A scene from the hit play "Enron" at the Noel Coward Theater in London.

Apparently not much has changed since Enron’s bankruptcy and fraud ridden collapse in 2002.  It’s eight years later and Enron is still spending loads of money on new ventures of uncertain profitability.  However, this time the organization will actually have to earn its revenues by pleasing consumers on Broadway.

Dear Harvard, Thanks for Enron!

It’s a well known fact that Enron was chock full of Harvard MBAs; Jeff Skilling, John Wing, Rebecca Mark and plenty of others were all Harvard MBAs.  This year BusinessWeek ranked Harvard’s MBA program as 2^nd in the nation, so clearly they are held in high regards in the academic community.  Yet, this is the school that gave prestigious degrees to some of the masterminds behind the collapse of Enron.  Did Harvard teach them that it was acceptable to act in the ways they did?  Was the collapse of Enron all Harvard’s fault?

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.

Enron Didn’t Go Down Alone: Andersen Can’t Recover

In thinking about the aftermath of the Enron scandal I thought about our class discussion about what Arthur Andersen could have done to protect their interests after being involved with Enron. The cover up the Arthur Andersen continued further impacted the downfall of their company.  Arthur Andersen was found guilty in 2002 of obstruction of justice for shredding Enron documents as well as improper auditing practices.  An article from TIME magazine states that,The subpoenas were aimed at learning “what the officers knew and what they did about it.”  Andersen did nothing but get more involved with Enron.  Furthermore even if the company were able to continue practicing, their reputation is tarnished. Mark Cheffers, CEO of accounting Malpractice.com, says, “Even if they’re innocent, it looks like a massive cover-up.”  A cartoon

Kenneth Lay: Dead or Alive?

Kenneth Lay was the founder and CEO of the Enron Corporation.  After receiving numerous awards for excellence, Lay was found to have been at the head of one of the largest corporate scandals in history.  But what did ever happen to Kenneth Lay after the collapse of one of America’s largest companies?  Many people aren’t quite sure.

Lay was indicted by a grand jury on July 7, 2004 for 11 counts of securities fraud and other charges.  Lay was eventually found guilty on 10 counts on May 25, 2006 and was scheduled to be sentenced to between 20 and 30 years in prison in October of that year.  During this time gap, Lay went on a vacation in Aspen with his wife and died of a heart attack on July 7th of that year…or did he?

Following the announced death of Ken Lay, people all over the country have had trouble accepting his fate.  A crop of conspiracy theories have surfaced in the years following the end of his life.  One theory in particular assumes that Lay escaped the country during his Aspen trip.  The theorist finds it highly suspicous that then current Secretary of State Colin Powell was treated in the same hospital Lay died the prior day for altitude sickness.  They believe Powell brought Lay a passport and IDs to flee the country. 

Others have chosen to question the autopsy and hospital reports and cite them as evidence to prove Lay is still alive while others wonder if Lay is dead but not from a heart attack.  Perhaps Lay poisoned himself? Or the government intervened? 

Whatever the case, if you see Lay in your local grocery story, you can report your sightings! Ken Lay is quickly becoming the new Elvis.

Best of Enron Week

After careful deliberation EJ, Kelly, Ross, and I are pleased to announce this week’s best post….

!!!!CONGRATULATIONS BROOKE!!!! and your post The Smartest People in the Room: Is using sex appeal smart or unfair?.

We have a few other awards to give out this week:

Thorough and original research: Derek for Control and Enron.

Great writing from first person perspective: Emily for What was in the water at Enron?.

Singular Trophy for Unique Idea: Mike1290 for Heroes at Enron.

Solid Award for Great Cohesion- EJ for Surviving at the Expense of Morality.

Long Memory for Using “Lovable Fool” article: Kelly for The Rise and Demise of Competent Jerks at Enron.

Visual Design Seal to Tania for using a picture!

Linking Certificate for Connecting Multiple Concepts: Jessie for Power: A Struggle to the Top.

Next Week’s Post: For this Wednesday, take some aspect of the Enron story and find out what has happened since.  This can include what happened to people, organizations, laws, American society, business practices, business education, global business, or some other aspect.  Are there untold stories from Enron that the Smartest Guys in the Room book overlooked?

Please use pictures, videos, quotations, links, etc. to spice up the blog! If you need help, look here.

Thank you!

The Smartest People in the Room: Is using sex appeal smart or unfair?

“Mark unapologetically viewed being a woman – a smart, charismatic woman – as a way to ‘get privileges that other people don’t get, and…audiences that others could never hope to achieve’…Her gender was not an obstacle to be overcome but an advantage” (The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, 72).

Rebecca Mark’s admittance of her willingness to flaunt her femininity intrigued me.  There are many factors that can give an individual power.  Most of these – money, knowledge, skills – are accepted and understood, but one – sex appeal – is more controversial.  Should individuals use their looks to gain influence and control?

What makes using your sex appeal to control others any different from using your money?  Would you feel comfortable gaining power as a result of your appearance?  After all, why do career centers offer seminars on how to dress for interviews?  Yes, respect and professionalism are important, but I contend that it goes beyond that.  The seminars teach individuals to conform to the looks desired of organizations in a particular industry

It seems to me that Rebecca Mark was able to use her gender to her advantage to the large extent that she did because she worked in a male-dominated business.  She unabashedly took advantage of this, working her way up the ranks by “play[ing] up her physical attributes,” wearing “high heels and short skirts,” and sleeping with her boss.  My initial thought was that she didn’t deserve what she got and was unfairly rewarded.  However, further thought made me recognize that perhaps she was just smart.  Maybe the book title should be The Smartest People in the Room.  Why leave Rebecca Mark out?  She understood just as well as the guys how to play the system and take advantage of what she had.

Like Skilling, Lay, and many others, Mark was certainly smart.  The men were unethical, however, and their actions are generally looked down upon.  By gaining power through her femininity, did Rebecca Mark put herself in this category?  I think so…but I don’t blame her.  Society has created a world in which such things are rewarded.  Mark had the intelligence and the charisma, but unfortunately they may not have gotten her anywhere.  Those are the characteristics that should have propelled Mark to the top, but in reality it was only her sex appeal that could do so.

Dot Thompson (and the rest) for Best People of the Week

Even though I had to meet with her on at least 2 other occasions for other classes, they were always in large groups and I mostly never paid any attention.  I am glad I went to see her by myself fairly recently to learn more about the opportunities that we students have at our disposal.  I went to the library not really knowing how to go about finding Dot, let alone any information that I needed.  After searching around and asking other people for a while, I finally found her, where we subsequently descended into the bowels of the library.  I didn’t make an appointment, but she wasn’t very busy and was more than happy to give me a hand.

Lunch With Dot Thompson

In preparation for writing my paper on The Smartest Guys in the Room, I met with the Management research librarian, Dot Thompson.  I arranged a meeting with her ahead of time through the Bertrand Library web page and she was thus aptly prepared to guide my research.  Dot guided me through the library’s databases and showed me three particularly helpful programs. 

Heroes at Enron

I will be writing a paper arguing why the guys at Enron were smarter than everyone else, how they did things that no one had even though of, how they were visionaries, and how America failed to learn an important lesson.  I want to focus on a different side of Enron and how they, through their legal, but shady business dealings, exploited the system and made a fortune.  I will focus mainly on their energy deals in California and the resulting outcry from the American public in general.  Power will be the topic of my paper and how the internal power structure of Enron allowed people, more specifically the traders, to exploit the weaknesses they found without punishment. I will also investigate the power structure of our government and how it resembles that of Enron’s.

Looking at Enron as a Loosely Coupled System

I think that Enron is a great example of a company as a loosely coupled system. There are a few main points that I got out of the section “Organizations as Loosely Coupled Systems” (Scott and Davis, Pg. 93-94). First, rules do not always govern actions. This clearly applies to all aspects of Enron. The company itself did not comply with accounting regulations set forth by the government and reported consistent earnings when in fact the company was losing money. Also, employees themselves, such as the CFO Andrew Fastow, participated in illegal and fraudulent deals with people both inside and outside of the company. In addition, company members did not follow the rules and standards within Enron. There are numerous examples of this. For one, almost all of the company’s executives used Enron to pay for their own personal expenses with some spending millions of dollars. Also, different departments within the company made deals that were not approved by RAC, the company’s risk division in order to reach personal performance goals and earn bonuses.

Power and corruption attributes to the fall of Enron

Power seems to be present in all types of organization, whether informal or formal. Depending on their internal structure, organizations tend to adapt diverse sources of powers and Enron is no exception. In my paper, I want to focus and finding the link between Organizations and Organizing and The Smartest Guys in the Room in the concept of power.

I believe power is evident in The Smartest Guys in the Room; several people had control over the company and they had a major influence not only to their employees but on Wall Street as well in very deceiving ways. I would like to analyze the different types of power within organizations and find which one applies to Enron. Organizations and Organizing discusses Emerson’s view of power as “the control or influence the other resides in control over the things he values, which may range all the way from oil resources to ego-support, depending upon the relation in question. In short, power resides implicitly in the other’s dependence,” (p.203). By doing some research (used index!) I found two very interesting books: Emerson and power: creative antagonism in the nineteenth century and Union power and the public interest which could give me more insights of power and its influence in organizations. Along those lines, I feel that the concept of corruption should be included when analyzing Enron’s power since it pertained to the company. I would like to explore how power and corruption are connected into the fall of Enron.

Organizations and Organizing gives me a wide array of sources for this topic. Among them, I found interesting the book The Modern Corporation and Private Property by Berle and Gardiner in which they argue “that as corporations grew large, ownership grew increasingly dispersed among disconnected (and therefore powerless) shareholders, while managerial control grew increasingly consolidated,” (p.354). I think this is very relevant to what happened in Enron, especially after Skilling took control of the majority company. I would be interesting to read some of Berle and Gardiner’s work and find the connection in The Smartest Guys in the Room. This could be a very interesting subject for the paper because it brings out a major flaw that Enron had.