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Case study: Enron - Term Paper Example

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Human resource management is an essential element of organization’s management because of its sensitivity to employees’ environment. This paper reviews a case study, on Enron’s human resource management strategy and the problem that faced the company…
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Case study: Enron
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Case study: Enron November 23, Case study: Enron Human resource management is an essential element of organization’s management because of its sensitivity to employees’ environment. This paper reviews a case study, on Enron’s human resource management strategy and the problem that faced the company.
Summary of the case
The case outlines history of Enron that begun as a small organization and abruptly expanded before its collapse in the year 2001. Central to the temporary success was the company’s employee recruitment strategy, Employee Value Proposition, which focused on the organization as a dealmaker and expected its employees to facilitate the goal. It restructured its human resource to allow employees’ freedom towards the objective. This ensured continued growth of the organization that attracted quality employees. Enron however collapsed in the year 2001 because of malpractices among its top employees.
Enron’s recruiting strategy and why it worked
Enron adopted Employee Value Proposition as its recruiting strategy, a strategy that focuses on employees’ productivity and rewards employees for their contribution to its realized objectives. It used the strategy to attract high profile employees who could facilitate its deal-making goal. The strategy worked because the organization was growing to its prime and was therefore attractive to employees, and the organization offered a flexible working environment that could allow employees to be creative towards achieving desired values (Ivancevich, 2012).
Enron’s overall recruitment EVP and strategy and the problems that resulted in the company
The organization’s employee value proposition and strategy played a significant role in Enron’s consequent problems. The strategy facilitated the problem that was misrepresentation of financial information and application of the misrepresented information to make deals for the company. The strategy’s scope desired achievements of the organization’s expansion objective and success in manipulating the statements or using them meant employees’ recognition and reward from the company. This therefore motivated employees to engage in fraud, leading to the problem (Ivancevich, 2012).
Importance of creating recruiting message that is attractive but does not oversell the company
Creating a recruiting message that is attractive but does not oversell the company is important because a recruiting message establishes recruits’ expectations, should they succeed in joining an organization. An overselling message may for example attract employees who can do anything to meet an organization’s objectives, whether the action is good or bad, legal or illegal. A fair statement therefore attracts moderately rational personnel (Catano, 2009).
Possible recruiting strategy for attracting employees should Enron decide to reconstitute
One possible recruitment strategy for the organization, should it decide to reconstitute, is the use of independent recruiting agencies. This approach is free from potential conflict of interest that may lead to management’s interest in recruiting and selecting employees who can be used to implement any objective, whether such an objective is professional of not professional. Such a strategy would ensure employees who can withstand management’s pressure to avoid the kind of problem that Enron underwent (Philips and Edwards, 2008).
Enron’s expansion and eventual collapse was therefore initiated by its management and facilitated by its recruitment strategy and selected employees. The most appropriate solution to the problem would therefore be application of a recruitment agency that is independent from management.
Catano, V. (2009). Recruitment and selection in Canada. Ontario: Cengage Learning.
Ivancevich, J. (2012). Human Resource Management. New York, NY: Irwin/McGraw Hill.
Philips, J. and Edwards, E. (2008). Managing talent retention: An ROI approach. New Jersey, NJ: John Wiley & Sons. Read More
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