An Actor Approach to Strategic Learning - Enron Corporation - Case Study Example

An Actor Approach to Strategic Learning (Learning Network Theory) Student’s name Institution Overview Enron Corp unexpected sudden collapses was the first in a progression of key corporate bookkeeping scandals that has meddled with the trust in the corporate administration and money markets as well. The company was formed in 1985 through a Merger between Houston Natural Gas and Intermonth (Thomas, 2002). This made it the first across country gas pipeline network. The center of the business moved from the managed transportation gas to that of unregulated vitality exchanging markets. The principal followed in this case was that of the fact that more money was being made through the purchase and sale of monetary contracts associated with the estimation of vitality resources than in genuine responsibility for resources. Enron filed a bankruptcy in December 2001, however was viewed as a standout amongst the most imaginative, quickly developing and best managed inside the US. All the stakeholders lost billions of money following the swift collapse of the company (Garavan, 2007). This makes clear that Enron was in serious financial shape as 2000, carrying heavy burdens of money losing business and debts, but manipulated its financial and accounting statements to cover up for these issues. Analyses and explanations The company leaders hold top position by the time of company collapse were Lay and Skilling. These leaders engaged in mainly in concept of self-promotion. This can be seen by the way they assigned nomenclatures for themselves and other top most employees. The company under the management employed young people and maintained work regimes that stretched up to 180 hours per week. Employees were made too believe that they were part of the world changers but wager fired at the notion of the managers (Iles, Preece, & Chuai, 2010). From an actor approach to strategic learning or Learning network theory, Lay seemed to be a transformational leader who could promote a learning culture based on transformation and progression among the employees at the start of his career. This can be seen from his supportive approach and advocate for a free market, as well as, deregulation of the energy market. However, he later used this approach that he had developed among the employees and those he led at Enron to develop a culture that only passed the wrong message to the employees. The culture that was created by the management at Enron failed to recognizes workers as focal performing actors who compose learning on the premise of their thoughts and interest as opposed to lessening their cooperation to being forced to bear an instructional course. The administration various methods for sorting out work related learning through the expression various arranging procedures utilized by workers and different characters keeping in mind the end goal to learn negatively. The kind of lessons directed to the employees made inalienable strains amongst learning and work, between worker improvement and work execution and no interest is directed to the learning concept making it simply a functional for work. As a result, not time was available to reduce the risk of making a learning tip top individuals were not modifying work to their capabilities or adapting their capabilities to work innovations This move can be explained further by the manner in which Enron to management permeation a wrong culture where lower level employees who were wrongly placed and comprised on the young mimicked unethical behavior as a way of meeting their aggressive compensation targets. Everybody learned that to be able to survive and earn more cheating was the way out. This promoted internal competition and all adopted the management leadership style that focused only on short term goals at any cost (Wang, & Sun, 2012). In order to keep up with the leadership style being followed employees had to learn how to meet short term financial goals and ended up putting the company as a whole at the risk of taking part in malicious practices. The management took part in financial tweaking and inflated the company performance an act which resulted into a bubble that busted. Poor financial management is still evident where top leaders made sure that they received their incentives even when the company was faced with financial constraints through the performance measurement targets. Top company management led by Kenneth Lay and Jeffrey Skilling as the main actors created a learning concept which was copied by all stakeholders in the company. The approach lead to development of a culture that encouraged fraud and cheating. As a result this move permeated the entire company and advocated for unethical behavior between the employees. The leadership behavior applied in the company was for personal benefit which eventually led to the downfall of the company. Theoretical Approach In line with a theoretical perspective or learning network theory, learning networks within an organization plays a key role to its success. The perspective of the learning network does not accept the functional tool of management as well as a context independence organization learning view. In its place, it shows how the learning network are developed through interactions between employees’ managers and other actors who holds their own strategies in the organizing work related learning (Poell, et al. 2000). The theory gives all actors an understanding and development of alternative ways in the organization of employees learning in connection to work. Lack of positive learning culture among the employees and management advocated for by an incorrect learning philosophy contributed most to the collapse of Enron. The managers should have not followed the policy of making money for themselves and instead were supposed to pave way for a voice that emerged against their policy (Poell, & Van Der Krogt, 2014). Through a positive learning culture from the top most actors a leadership philosophy based on moral responsibilities and ethics would have been advocated for and the fiasco could have been prevented. The code of conduct at Enron was reduced to just a document and was not followed at all (Sims, & Brinkmann, 2003). Again a culture of positive learning among all the actors was prevalent in this case where a spirit of adopting the code of conduct document and a leadership that promoted that promoted and showed people how following its guidelines was important would have played a key role in the performance of the company. This would have contributed to an evolving positive corporate culture based on ethical grounds. Learning could not only be based on doing the job right , but leaders key source of influence in is not found within his or her technical ability, but ethical behavior of the leader as well as the moral virtues that comprises of honesty fairness and integrity. Lay and Skilling as managers and leaders of Enron aimed for an image of being charismatic leaders and managed to convince the stakeholders of their spectacle to advocate for change in the company. The quality of leadership that is grounded and based on learning functionality would have ensured growth of employees and saved the company from the debacle. The following are some of the ways based on an actor approach to strategic learning would have made a big difference in Enron (Yorks, 2004). A well organized and better leadership could have contributed and promoted a corporate culture conducive to ethical and moral development. Hiring as indicated earlier was baseless and incase it would have been done in a better way rather than just promoting individuals who only complied with the wrong deeds (Beausaert, 2011). In another case the leadership would not have been involved in ultimate self-praise and spectacular showing, but rather charismatic approach by encouraging teamwork, and discourage an ethical financial approaches and fraud activates that were evident. Finally, through better system in place it would have been easy and possible to catch the fraudulent activates and manipulation of financial and accounting statements. In conclusion the management of the company created a learning culture where fraud was given a chance and cheating among all actors. This move encouraged unethical behavior among the employees. Manipulation of the financial and accounting statements of the company were used to send a wrong information on the capability and performance of the company. It is important for companies nowadays to advocate more for a positive learning culture right from the main or top most actors to the subordinates. Developing an ethical culture will result into positive learning network among all players and actors such that employees will borrow only positive development approaches from their leaders. A culture or network based on the wellbeing of an organization will prevent its down fall and advocate for growth and development. References Beausaert, S. A. (2011). The use of personal development plans in the workplace: Effects, purposes and supporting conditions. Universitaire Pers Maastricht. Garavan, T. N. (2007). A strategic perspective on human resource development. Advances in Developing Human Resources, 9(1), 11-30. Iles, P., Preece, D., & Chuai, X. (2010). Talent management as a management fashion in HRD: Towards a research agenda. Human Resource Development International, 13(2), 125-145. Jickling, M. (2002, July). The Enron collapse: An overview of financial issues. Congressional Research Service, Library of Congress. Poell, R. F., & Van Der Krogt, F. J. (2014). The role of human resource development in organizational change: Professional development strategies of employees, managers and HRD practitioners. In International handbook of research in professional and practice-based learning (pp. 1043-1070). Springer Netherlands. Poell, R. F., Chivers, G. E., Van der Krogt, F. J., & Wildemeersch, D. A. (2000). Learning-network theory organizing the dynamic relationships between learning and work. Management Learning, 31(1), 25-49. Sims, R. R., & Brinkmann, J. (2003). Enron ethics (or: culture matters more than codes). Journal of Business ethics, 45(3), 243-256. Thomas, C. W. (2002). The rise and fall of Enron. Journal of Accountancy,193(4), 41. Wang, G. G., & Sun, J. Y. (2012). Theorizing Comparative Human Resource Development A Formal Language Approach. Human Resource Development Review, 11(3), 380-400. Yorks, L. (2004). Toward a political economy model for comparative analysis of the role of strategic human resource development leadership. Human Resource Development Review, 3(3), 189-208. Read More