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Assessing Internal Politics and Group Processes

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The Last Days of Enron -The events surrounding Enron during early 2002 clearly presented some ethical problems for management, some political problems for public officials, and of course some financial problems for investors. Fundamental to the misdeeds of Enron are the various social forces that led participants into the commission and acceptance of ethical malfeasance.

Assignment: Note: The assignment is NOT about Enron, but on assessing the internal politics and group processes that led the company on its downhill course. Ensure that you are focusing on these aspects and not on the " hot publicity" of Enron's ill fate.

1. How would you characterize the internal politics and group dynamics of Enron during their times of conflict and distress?

2. Be sure to consider and address the issues of: individual behavior, group processes, power relationships, and conflict management.

Please provide at least 3 pages of information to get me started. Thanks!

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Hi,

Have you read the artcles yet? They are very informative. Let's look at the two questions drawing examples from the two articles for you to consider for your final copy. However, there are many other examples to consider as well.

RESPONSE:

1. Assignment: Note: The assignment is NOT about Enron, but on assessing the internal politics and group processes that led the company on its downhill course. Ensure that you are focusing on these aspects and not on the " hot publicity" of Enron's ill fate.

(1) How would you characterize the internal politics and group dynamics of Enron during their times of conflict and distress?

(2) Be sure to consider and address the issues of: individual behavior, group processes, power relationships, and conflict management.

I think it is clear that internal politics and group dynamics of the firm contributed to the failure of Enron. Personal ethics also played a large part for some Enron players, who formed partnerships to hide large sums of losses making it appear that the profits were much larger than they actually were. For example, "Mr. Skilling was singled out for criticism in the internal investigation that was released by Enron on Saturday. The report said of the partnerships that he ''certainly knew or should have known of the magnitude and the risks associated with these transactions.'' It concluded that Mr. Skilling ''bears substantial responsibility for the failure of the system of internal controls'' to reduce the risks in the partnerships. Through a spokeswoman, Mr. Skilling declined requests for an interview" (Schwartz, 2003).

However, power relations of the upper management helped to keep the 'secret' through the closed communication system and the culture of intimidation that operated at Enron. This was part of the internal politics that operated in a way that allowed corruption to go unquestioned. In other words, internal politics included a culture of intimidation and control, with closed communication systems and decentralized decision-making. For example, individual and group communication problems occurred between all levels at Enron. For instance, Enron's accountant did not question the figures given to her, and she reported later that it was in part because she feared for her job. At Enron, there was a 'closed communication' system so information did not move freely upward to the proper decision-maker or when it did, it was distorted. For example, conflict could not be managed effectively in this culture because problems were encouraged to be ignored through power tactics of fear and intimidation e.g. employee who bring up a problem fails to get a bonus. This was Enron's conflict management through power and intimidation promoted through internal politics and corporate culture.

For some Enron top managers, there seemed to also be a lack of accountability, integrity and honesty. For example, top management decided to manipulate the figures without consideration for the employees and investors, who lost billions. And, the corporate culture discouraged free communication due to power relations and the use of power tactics to "shut" people up: "Jeffrey ...

Solution Summary

Using Enron as an illustrative example, this solution characterizes the internal politics and group dynamics of Enron during their times of conflict and distress including in the discussion: individual behavior, group processes, power relationships, and conflict management.

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