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Enron and AIG’s Internal Politics
Charismatic leadership style characterized Enron’s management. Tourish (2002) points out that leadership used coercive force, retribution against whistle blowers, manipulative vision aimed at transforming the company by compelling an ideal vision, imbuing employee relationship with a sense of higher purpose, intellectually stimulating them to motivation to intensify their efforts towards the vision lead to a process of indoctrination. None questioned.
On the other hand AIG’s leadership was similar to that of Enron but for the fact that information about the company’s financial health was concealed. Tourish (2002) reports that Enron’s financial health was based on tailored figures to suit the vision of the company. Cohan (2002)’s views of efficient leadership compares both company’s leadership with good interpersonal competencies, a basic managerial skill. Tourish (2002) asserts that both leadership espoused theory by creating a vision of strong global giants in their fields of specialization. Both companies espoused consideration, and structured the activities of employees to act decisively and efficiently for achieving their goals and objectives as affirmed by (Cohan, 2002).
Enron’s politics embraced the kind of politics which asserted the leader as absolute, no democracy in their leadership. On the other hand AIG relied on employees to maneuver information concerning the company’s financial health and were led to believe in a vision that never was. Both companies were characterized by leaders under investigation.
Enron and AIG’s group dynamics
Group dynamics determines how groups make decisions. McNamara (2004) identifies norms as the element that governs group behavior and the group leader forms one explanation of group dynamics. In addition, the relationship between group members, the leaders, the tasks performed by group members determine the internal dynamics of a group. Enron and AIG differed fundamentally on group dynamics. Evidently, both companies had employees, who were dedicated to it, formed highly cohesive cross functional teams. Tourish (2000) identifies characteristic traits of Enron’s leaders as self centered, focusing on self rather than the consequences of their deeds. Similarly, AIG’s leadership, the cases of Enron and AIG show leaders and employees whose individual behavior had similar characteristics organization-wise, indoctrinated to work towards organizational vision.
Group processes
Drawing from Pitts (2008) notion on governance, Enron and AIG had varied differences on employee group processes identified by the relationship between management and the employees. Within Enron, language and style of relating was highly regulated, according to (Tourish, 2002). AIG’s leadership compared to that of Enron, emphasized on a mean and lean staff. Group patterns and communication channels that existed through which communication occurred clearly indicated patterns of influence according to the journal, Interpersonal Issues in Management (nd). Both companies’ leadership distinguished the roles and the relationship between employees and management, patterns of dominance, who leads who, task and social focus, what, level of group effectiveness they needed, conflict resolutions measures to embrace, and the groups’ emotional states.
Power relationships
With Enron, power resided in the hands of its leaders. They were coercive, assertive and retributive to however expressed contrary views. Ethical decisions were imposed on the employees and peer communication was restricted on information regarding the company’s ideal vision.
Conflict management
Enron enjoyed a monolithic organizational culture, where differences from the leaders were banished with tightly policed policies McNamara (2004), while AIG’s deceptively enjoyed a democratic style of leadership where conflict resolution started at employee to management levels. However, it can be asserted from Cohan (2002) that both companies had strong measures in pace for detecting and identifying disruptive behavior that may cause conflicts.
Reference
Cohan, J. A. (2002). “I didn’t know” and “I was only doing my job”: Has corporate governance careened out of control? A case study of Enron’s information myopia. Journal of Business Ethics; Dordrecht.
Interpersonal Issues in Management: Nemetz? Mills, P. (nd). Interpersonal Issues in Management. Chapter 16. Eastern Washington University. 2009. Web.
McNamara, C. (2004). Optional – Group Performance Management:. Group Performance Management. Web.
Pitts, G. (2008). Governance is at the heart of this market mess; The Globe and Mail.
Tourish, D. (2002). Charismatic leadership and corporate cultism at Enron: The elimination of disent, the promotion of conformity and organizational collapse. Web.
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