Blame in Organizations

Enron Employee leaving work--was SHE responsible?

Enron Employee leaving work--was SHE responsible?

One idea that Open Theory offers is that the organization does not act as, well, an organization. “The organization is a coalition of groups and interests, each attempting to obtain something from the collectivity by interacting with others, and each with its own preference and objectives” (94). In other words, organizations are not necessarily the one-faced entity they are made out to be. Enron was an organization—but it was an organization made up of many smaller, in many says independently acting groups that may or may not have the same goals as other groups in the organization. Enron was not a single being bent on greed and world domination; only certain people in the organization were.

A similar statement can be made about the current financial mess. An article recently published in Slate defends Wall Street bankers. The author makes a good point: “One obvious point is being lost in the rush to flagellate Wall Street: The vast majority of toilers in the financial vineyards had nothing to do with the catastrophe. Most are themselves victims of poor judgments they didn’t make, didn’t know about, and would not have understood if they had known about them.” Like the present day financial system, it is unfair to blame the entire organization of Enron for the wrongdoings of only a few.

But this of course begs the question, where do you draw the line? When can you—if you should—hold employees responsible for helping ruin a company? Is ignorance an excuse? Is an employee that gave his blood and sweet working 12 hours a day on an Enron project, but was unaware of its evil implications, responsible? Maybe I am exaggerating, but you get the point–is it always so easy to assign blame in an organization as it was with Enron?

Another notable example is Enron employees and their investments: “Employees were repeatedly encouraged to buy Enron shares; on average, they kept more than half their 401(k) retirement holdings in Enron shares.” If you believe in the company you work for, why wouldn’t you? To lose all of your retirement funds and face the score of society…that has to hurt.

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5 Responses

  1. This reminds of another post I just read on this blog, https://bucknellorgtheory09.wordpress.com/2009/02/18/pursuit-of-personal-interests-working-towards-one-goal-whose-goal/, where Holly talks about loose coupling. Holly argued that while there were independent actors in Enron, they were all working toward the same (personal) goal of making money and doing so by making it look like Enron was making money.

    The lower ranks of employees were being instructed to operate in this system, and were not really questioning what they were doing. Those on the trading floor in Enron may be held responsible for some of the misdoings but many had no idea of what was going on.

    While it may be that we would ideally like for employees to know what their employers are up to, it is a tough ask. Besides, how many people would realistically even question authority, especially if they have none of their own. It may be something to be expected from ‘ranked’ employees perhaps.

  2. I think Nadir makes a good point when he talks about employees not knowing what their employers are up to however, to be a part of the organization even if you are an entry level, having only been in the company for a few months before its collapse, you are still a part of the company and you still have to put that company on your resume in the future. If Enron was encouraging all employees to invest half or all of their 401K into the company that should have been someone’s first inclination that maybe something is going on, I personally feel that many people knew something was going on in Enron but they may have been too afraid to speak up because they to wanted to make big bucks as well and to go along with the majority is in many people’s minds easier then to stand out and be the minority in a situtation.

  3. I fully agree with Kristen’s comment of lower employees 401K investments. If I was a midlevel employee working for Enron, and my company was one of the largest, innovative, and fastest growing company in the world, I would be out of my mind not to invest. As an employee, I feel it is necessay for workers to show support of the company that pays them, but it is the duty of top executive to protect and aid the employees that allow them such high bonuses.

  4. I agree with all of the above content, but to add to that, employee habits are usually bend and crafted into what a company wants them to be. Many undergraduates look for “developmental” positions or trainee positions. Their intent is to learn what is the “right” way to act and to learn the ins and outs of an industry. If you are directly taught by a company, how it and the industry operates, then would you know any different? As seniors looking for a job, have you really looked into companies well enough to know their real culture, their financial health, and their future opportuntities for growth? Most of this effort consists of sifting through the corporate B.S. that covers the real truth. (Just like Enron used SPE’s to make their financials more appealing) Most of what you think a company is, is a direct result of what thy want you to think it is. One year ago, how many people do you know that were talking about how crappy the banking industry is? I’d say none.

  5. I’d like to use the photo captioned “Enron Employee leaving work–was SHE responsible?” in an academic publication, a book chapter. If it is publicly available for use, can you provide me or direct me to how to obtain documented permission?

    https://bucknellorgtheory09.wordpress.com/2009/02/17/blame-in-organizations/#more-293

    Thanks,
    Romie Littrell
    AUT Business School
    Auckland, New Zealand

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