Pursuit of Personal Interests Working Towards One Goal. Whose goal…?

As we learn more and more about what happened internally at Enron, I think it’s safe to say there are some pretty clear connections to the organizational structure there and some of the structures we are learning about in Scott and Davis’s “Organizing and Organizations.” Something that stood out in my mind in particular was the idea of a “loosely-coupled” organization and how it influences the behavior of the individuals within the company. What I took from their description of a loosely-coupled structure is that it allows for a higher level of autonomy, and that the goals and intentions of an individuals are not always in tune with the overall goal of the organization. The executives at Enron were essentially given free range (and unlimited resources) to carry out transactions that not even the CEO really understood. Rebecca Mark’s rampant adventure about the globe to gain as much of an international presence as possible was pretty much overseen by…no one. Andrew Fastow’s unmatched knowledge about how to tweak financial statements gave him complete autonomy and even authority where it was certainly unwarranted. These are just two examples among many of individuals at Enron being allowed to pursue a personal goal completely unchallenged (or enough that they weren’t stopped) by anyone else in the company.
What’s interesting about Enron, though, is that despite the individual greed within the corporation, the reason that there was so much blind-eye turning is because they actually all were working towards the same goal: make the investors happy enough that they continue to pour money into the company. SO, in order for the theory of loose-coupling to apply, we have to assume that the “goal” of any organization should be interpreted as what the goal SHOULD be, not what the selfish, greedy executives have in mind. I think most would agree that at least one goal of a company should be ethical soundness. If we look at it this way, it definitely holds true that the loosely-coupled structure at Enron led to the pursuit of personal goals, rather than the overall good of the company. The fall of Enron can definitely be attributed to individual interests taking priority over the successful operation of an ethically sound company.
What scares me is how loose-coupling is not the only structure that invites the pursuit of personal interests. Take the government, for example. Positions clearly defined, rolls supposedly designated appropriately, public interest in mind (we hope); yet still, the tendency for individuals to stray from the “stated purpose” that Scott and Davis talked about is evident here, too. Presidential candidates run campaigns that, understandably, depict intentions that will please as many people as possible. However, once elected, we have definitely seen evidence of personal interests getting in the way of previously stated “promises.” I won’t call out any presidents in particular for fear of creating conflict or attacking anyone’s personal beliefs (wow…am I Ken Lay?) but I think we can all agree that there have been some broken promises that were probably a result of personal gain trumping public interest.
Everything I have talked about so far has negative implications about this notion of independent thinking within structures. While it can definitely do some harm, I don’t think we can ignore the good that can also come from it. If people were expected to go into any organization and come out having fulfilled only the “stated purpose” they came in with, what do they have to show for in terms of a learning experience?

4 Responses

  1. The environment at Enron was defined by executives who were working in self-interest most of the time, and this environment led to other members of the organizations to act in a similar fashion. Had the culture been one based on ethics, and the environmental standards set by leaders who cared for the rank and file and the common stake holders, then loose coupling would not have had this negative effect.

    What kept the company going for a long time was also perhaps this loose coupling, if the structure had been tightly couples, then the failure of multiple (significant) players would have led to a much faster decline. But since most of the employees performed their tasks as they were defined, the company’s executives were able to reap the benefits of their work for a long time…

    About presidents… it is the system at work. If one person’s promises meant that he could pull that off even if others didn’t agree would mean that the system’s checks and balances (accountability in the organization) have failed. However, sometimes the promises don’t get to fruition because they were never made with sincerity. We have seen both kinds.

  2. I appreciate your concern about respecting differences in political preference.

    At the same time, lets not beat around the Bush (pun intended). The revolving door between government and the private sector is well known. Tom Daschle is another recent example.

    So, who did you have in mind?

  3. Well, Bush is definitely the one I was referring to most strongly because he’s the most recent, obvious example. But a comment I just posted in response to Ken Lay’s leadership…or lack thereof…made me think about what I had said from another angle. One of the inherent promises that comes with accepting a role in politics is the promise to represent those you are serving how they would want to be represented. I appreciate the argument that what goes on in one’s personal life (Bill Clinton, Eliot Spitzer, McGreevey) is their own business, but it was their choice to give up this luxury when they stepped into office. It’s a broken promise and a slap in the face to the people who supported and elected them…and believed that they were a worthy face to serve as a representation of more people than just themselves. Unforgivable? No. Just…inexcusable.

  4. I agree with Nadir in that Tight-Loose authority in many ways, can have its positives and negatives. It can definitely promote innovation and growth within a company by utilizing each employees creative abilities. (This is one of the main flaws I see in corporate culture today. It stifles individual abilities and teaches people to be one thing.) One threat though is the tendency for a loose system to lead to looser systems which is in part what happened with Enron. Going into any situation people tend to test their limits until they reach a boundary. But when you test and test and never get scolded the skies the limit. The bigger problem with Enron using his policy ( and I believe is the main reason it got out of hand), is the use of this policy by the executives. How many instances have we already heard about executives spending lavish amounts of money. It is even recognized as part of Enron culture which makes it almost encouraged to spend company money.

    In regards to our presidential promises, I see this as a whole new topic. People tend to have higher ambitions than they can realistically achieve. And this is especially the case when running for president. I don’t know if the candidates truly know what they can accomplish given the formal, and straight-laced structure of our government.

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