Management and Organizational Structure

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Organizational Structures
Ahmed Bassyouni
University of Phoenix
Sep 28, 2010
William Noble

Some organizational theories could explain the Enron’s failure. Looking at the organizational structure and management of Enron, The structures were flat before the bureaucratic structure developed, then the bureaucratic structures developed in order to increase control. There were vertical structures where there was high level of control and according to theories the organizational circle is moving back to flat structure. In Enron Corporation, internally it had such a highly decentralized financial control and decision making structure that made it impossible to get a clear view on the corporations ' operations and activities. Along with a
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This was a fertile environment for corruption. There should be shared reliability for success of a business, however, in Enron because of conflict of interest there was no shared reliability. Even the external auditor, Arthur Andersen had a conflict of interest.

Currently, most organization believes in the human relations movement. This is a form of management that gives importance to individuals and their unique capabilities in the organization. Each person is unique and her input should be considered as valuable. However, in Enron, the suggestions and objections of hundreds of accountants and finance personnel were turned down abruptly, the employees that objected were abused and their voices suppressed. Those that were persistent with their objections to shady financial accounting practices were even threatened with dire consequences. Since there was no matching between the inputs of the employees and that of the company, the situation was ready for failure.

From another perspective management in business and organization is to get people together to achieve the desired goals and objectives. In case of Enron, the goals and objectives would have referred to the legitimate business objectives of the firm. However, in case of Enron the objectives and goals of the company were to hide large debts, billions of dollars losses, and instead show large profits. Each function of management namely, planning, organizing,
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