Fannie Mae - Organizational Culture
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Hello, I am trying to write a paragraph or two describing for how Fannie Mae in 2004, organizational structure was very poor- hence they ran into all their problems. One idea I had was to tie it to their Mission and vision statement. What do you think of that? Is there a better approach? How should I craft this paragraph? What happens when there is poor organizational culture- particularly all the points below? Can anyone think of any exhibits or diagrams that would illustrate the points?
These are all the organizational culture components that Fannie Mae did wrong.
-management's desire to portray Fannie Mae as a consistent generator of stable and growing earnings;
-a dysfunctional and ineffective process for developing accounting policies;
-an operating environment that tolerated weak or non-existent internal controls;
-key person dependencies and poor segregation of duties;
-incomplete and ineffective reviews by the Office of Auditing;
-an inordinate concentration of responsibility vested with the Chief Financial Officer; and
-an executive compensation structure that rewarded management for meeting goals tied to earnings-per-share, a metric subject to manipulation by management."
Mission Statement
"At Fannie Mae, we are in the American dream business.
Our mission is to tear down barriers, lower costs, and increase the opportunities for homeownership and affordable rental housing for all Americans.
Because having a safe place to call home strengthens families, communities, and our nation as a whole."
Vision Statement
"To strengthen the social fabric by continually democratizing home ownership." - Federal National Mortgage Association.
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This explanation provides you a comprehensive argument relating to Fannie Mae - Organizational Culture
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Your question is how Fannie Mae's organizational structure was a cause of its problems. The organizational structure refers to the hierarchy in Fannie Mae, the manner in which lines of authority and responsibility were a cause of their problems. In case of Fannie Mae, the most critical structural reason for its problems was the broad collection of functions and authorities residing in the CFO. There was cross-enterprise approach to operational risk management. Another structural reason was that the internal auditor did not report to the board and so reports about accounting problems, weak internal control and ...
Education
- BSc , University of Calcutta
- MBA, Eastern Institute for Integrated Learning in Management
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