Module 5 - Case assigment-Business Ethics and Organizational Culture Essay

Module 5 - Case assigment-Business Ethics and Organizational Culture - Essay Example It is a cautionary tale of how to destroy a seemingly good corporation at the very peak of its success in the highly- competitive world of energy trading in a liberated but loosely regulated environment. Many things had connived to cause the unraveling of Enron, one of which was its wrong bet on the direction of the energy market. Prices were going south and so a desperate effort of covering up was undertaken, primarily that of off-balance sheet financial commitments. It was the perfect storm, so to speak, a confluence of negative events finally brought Enron down and taken positively, the failure of Enron brought about many positive changes in governance. A few examples of this benefit are today's increased vigilance, passage of the Sarbanes-Oxley Act, and reforms in the banking and financial sectors through stricter accounting reporting standards. Hopefully, Enron is the last of its kind of case, but one never knows for sure it will not repeat. This paper is a critical appraisal of the business ethics at Enron within the context of its organizational culture and how its leaders influenced and shaped that particular culture which in a way ultimately led to its spectacular end. Many things went wrong at Enron then but in a strange twist, no one raised a howl until it was too late. Enron is a classic case in business ethics. Discussion There are many different definitions of organizational culture, and several examples of its definition are given here. This is to give a general conceptual background of what it is and in a sense, what it is not. Organizational culture is the abstract but dynamic phenomenon observed in organizations that influences the people within that particular organization (Schein, 2010, p. 3) to think and act in certain prescribed ways acceptable to majority of its members. In this meaning of organizational culture, there is a certain emphasis on how culture is created through a series of constant exchanges between people, re-enacted and rei nforced by our interactions with the other people that are in turn shaped by our own conscious behavior. With this in mind, organizational culture implies a certain kind of rigidity that builds up stability within the organization, because it has coercive power on how people should feel, act, speak, think and do things in an acceptable manner that creates social order. In other words, organizational culture demands conformity. A slightly different meaning of organizational culture is the formal system of all shared meanings, values and viewpoints within an organization by which all members abide by (Divedi, 1995, p. 9); it positions the organization as something different from other similar organizations as it helps to define the basic or intrinsic nature of the said organization. Organizational culture can be structural in terms of its enduring characteristics which differentiate it as an organization, it can be subjective, in the way employees and members feel about the organizati on as a group, and lastly, it can be synthetic, which is a combination of both structural and subjective elements. It is the perceived subjective influence of the formal system within the organization, and coupled with the informal system of how its leaders and managers act and think, with all other factors. Another meaning of organi