Organizational Culture

Introduction

There are several things that organizations have to put in order so as to be able to achieve the set goals. This is because the various aspects of an organization impact on the results attained depending on the state they are put. One thing that has to be put in good shape is the leadership of an organization. This is because the leadership of an organization determines the direction taken through the decisions made. The other important thing to consider in business is the organizational culture. The leadership of an organization should make decisions whose impact on the organizational culture is positive. The leadership of an organization should always abide by the required standards (Akpan, 2002). Integrity and moral uprightness are some of the things that leaders are supposed to have.

Organizational culture

Organizational culture refers to the behavior that people in an organization keep and the indicators given by the actions that they take (Nadler &Tushman, 1980). Organizational culture is usually a combination of values, visions, norms, working language, systems, symbols, beliefs and habits in relation to the human beings in an organization. It is believed that organizational culture gives guidance on the steps and actions that are taken in an organization. Organizational culture is known to be brought about by the founders of an organization. The founders of an organization are known to lead the way in terms of what other people will value and behave. It is believed that the founders of an organization pass the organizational culture to the other people who keep joining the organization after foundation. Eventually, the culture that was determined by the founders spreads to every human being in the organization.

The change of an organizational culture occurs when an individual especially those on top behave in a different manner from the earlier known. This makes the old behaviors get forgotten and the new ones taken up. Slowly, the organizational culture keeps changing through the other individuals in the organization copying the new culture from the initiators.

Enron’s sense of business ethics and business operations in the context of the organization’s culture

Lack of integrity on the side of executives affected the organization’s culture negatively. Some executive leaders at Enron were not able to handle things with the required integrity standards. According to Meisinger (2012), integrity is one of the most important things in executive leadership. For example, an executive leader such as Skilling prioritized the maximization of profit to a point where integrity was not considered. This was not able to create an organizational culture which is rich in integrity. For example, Skilling’s lack of integrity was evident in other employees when it came to answering honestly to questions regarding the company’s financial position. A person such as Andrew Fastow was not able to do the right thing when their turn came to answer the questions related to the real financial position of the company.

Moral-less transformational leadership at Enron was another thing that brought problems at Enron. It is evident that the leadership at Enron was transformational. Transformational leadership is known to be good in ensuring that the people in an organization achieve more than expected. This is usually through making the people acquire values that are able to make them achieve more. The fact that some leaders of Enron were weak in terms of moral standards led to negative impact on the organizational culture. Leaders at Enron such as Lay were not able to act in morally upright ways when it came to finances.

The other thing that went wrong with regard to organization culture of Enron was the ethical egoism. This type of egoism advocates that each person should be able to chase self interests first. This means that the company’s objectives are not worked on in the right way. This is because the people in the leadership are more focuses on benefiting individually rather than working towards meeting the organization’s requirements.

Role and responsibility of the executive leadership

The executive leadership of an organization should always be able to shape the organizational culture in a positive way. The actions of the executive leaders are known to be very influential in the way the other people in the organization will go about their things

The executive leadership at Enron should have tried to instill integrity into the personalities of each person in the organization. This would have been important for ensuring that all the actions by each individual in the organization meet the standards required regarding integrity.

The other role that the executive leadership of this company should have played is overseeing the development of moral standards in the company. This should have been done by first having the executive leaders act with morality as a priority. There should have been follow up on the actions of the other employees to ensure that they act in morally accepted ways.

The executive leadership of this company should have engaged experts in organizational culture to help Enron in succeeding culture wise. The CEO and the others should have realized the value of good organization culture and took a bold step towards saving the company from negative organizational culture.

As indicated earlier, some of the executive leaders at Enron acted in ways that helped in reshaping the organizational culture negatively. Skilling for instance was instrumental in degrading the moral standards in the company. This was brought about by his decision of prioritizing maximization of profit in a way which compromised morality. After the other employees realized this, they were able to copy it thus affecting the organizational culture negatively.

Lay on the other hand helped in reshaping the organizational culture negatively by not considering integrity when it came to finances. Lay forgot the financial reality and acted in ways that did not consider it (Free, Macintosh, & Stein, 2007). This led to negative impact on the organizational culture at Enron.

Andrew Fastow on the other hand was not able to answer questions honestly about the actual financial position of the company. This encouraged the culture of dishonesty in the company. All the other people in the company were not able to exhibit honesty thus affecting the organizational culture negatively.

The role of human resource management in the negative organizational culture at Enron
The human resource management organ of an organization is very vital in determining the direction of an organization because it is responsible for the people who are in an organization (Wilson, 2005). The human resource management function at Enron was did not act in a good way when all these things were going wrong. The employees should have been developed well to avoid the degradation of the necessary values that are instrumental in shaping the organizational culture. The human resource management function of the organization should have identified values such as integrity and moral standards as vital for the growth of the company’s organizational culture. The department should have warned those who were acting in ways which are unacceptable. The department should also have taken some time and resources to improve the morale as well as attitude of the people in the organization. The fact that the human resource management function of the company never audited the organizational culture also helped in reshaping negatively the organizational culture.
Conclusion

Organizational culture is one thing that all organizations should ensure that stays in the right state. This is because a positive organizational culture impacts positively on the results obtained in an organization. It is extremely necessary to ensure that the leadership of an organization gets aligned well with the organizational culture (Madsen & Vance, 2009). This is important since it keeps the culture in an organization well managed. The top leadership should ensure that there is cooperation with the subordinates. This is because the responsibility of developing and growing a reasonable organizational culture requires efforts from all people in the organization.

Integrity and morality have emerged to be important factors in the leadership of an organization. From the case of Enron, if the top leadership fails to meet the standards regarding integrity and morality the culture will be spread to all functions of an organization.

The executive leadership in all organizations should be able to lead the way when it comes to shaping organizational culture positively (Johnson, Whittington & Scholes, 2011). This should be through doing things in the right way and not ignoring the necessary attributes. This should be able to encourage all the others to follow suit.

 

 

References

Akpan, E.O. (2002). Strategic Alignment: The Business Imperative for Leading Organizations. Tate Publishing.

Free, C., Macintosh, N., & Stein, M. (2007). Management Controls: The Organizational Fraud Triangle of Leadership, Culture and Control in Enron. Ivey Business.

Johnson, G., Whittington, R. & Scholes, K. (2011), Exploring corporate strategy, 9th ed., Harlow: Pearson Education Limited.

Madsen, S. & Vance, C. (2009). Unlearned lessons from the past: an insider’s view of Enron’s downfall. Corporate Governance.

Meisinger, S. R. (2012). Examining organizational ethics. Human Resource Executive Online (June, 2011). Retrieved on January 16th, 2014 from: http://www.hreonline.com/HRE/story.jsp?storyId=533348507

Nadler, D. A. &Tushman, M. L. (1980), A Model for Diagnosing Organizational Behavior.Organizational Dynamics, 9 (2), 35-51. Retrieved on January 16th, 2014 from EBSCO

Wilson, J.P. (2005). Human Resource Development: Learning & Training for Individuals & Organizations. Kogan Page.

 

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