Introduction
Enron has once been named as one of the most innovative American company, according to a survey made by Fortune Magazine (Healy & Palepu, 2003). Its rate of growth in the stock market is unbelievably exponential as reports had said that its stock’s growth reached up to 300 percent once. That kind of growth can be described as superb when it comes to business because that would only mean that the sales had hit way past the profit borderline. Furthermore, the growth lasted for some period of time until the company gained too much prosperity which is the reason why the company had been recognized.
Despite the prosperity being experienced, the company suddenly suffered a huge downfall in the price of their stocks, which had reached close to zero (Healy & Palepu, 2003). One reason which is being looked at is the failure of the company to establish a proper communication and responsible leadership. This paper will discuss the details of the problem as well as to study its underlying utility ethics.
Body
The main concern of the utility test is to develop possible alternative solutions that may have prevented the closure of the establishment, and made the company continuously competitive until the present day.
Step 1. There are possible alternative solutions which might have saved the company from bankruptcy. The roles of different persons involved could have been specified if responsible leadership had been established before. The first proposed solution is to develop a communication and leadership training program for all employees. With the implementation of this program, everyone from the company, including the managers, auditors, regular employees and other positions, will be involved for the better management of the company. It had been noted that the failure of the company can be traced on the wrong decisions made by the managers and auditors in focusing on short-term stocks that will make them earn huge amount of money in a short period, but had kept the company hanging with no plans regarding long-term goals (Healy & Palepu, 2003).
The second alternative solution is to hire expert analysts who will be consulted about the decisions of the company and will give advice and proper marketing strategy that can deal into the future problems with regards to the heavy competition among several international companies. This can be proven in the outcome that befall upon the company when it decided to shift to energy trading industry wherein there are larger and more experienced competitors (Healy & Palepu, 2003). Moreover, this option will affect the management as a whole since there will be management changes under the advice of the analysts. This will also affect investors since they must adjust if ever there are new policies to be implemented under new management.
Step 2. Enron’s demise had been prevented if the company prioritized effective communication and human resource management (Seeger & Ulmer, 2003). Since the company did not have an effective communication, the orders were chaotic, as the orders made by the higher ups were not made clear. Moreover, communication is directly connected to responsibility. If orders and instructions were made clear and easily understandable since the early days of Enron, the company would have prolonged its opportunity to allocate wealth in such a way that the resources will not be wasted, but will be conserved as well. With all these explanations, developing a communication and leadership training program will be a suitable solution because it also follows ethical standards. Equal opportunities will be given to all persons involved, both the employees and the customers. Moreover, there are two objectives for pursuing this solution. First is to assess the current capabilities of the employees regarding communication and leadership skills and second is to improve those skills in a non-forceful way that their development will be a huge factor for better customer relationships. As for the cost, the initial investment will be a bit costly because the company will hire experts who will handle the program, but in the long run, the cost will be a less burden because senior employees will be able to facilitate the training program of the new batch of aspiring employees.
The failure of Enron’s analyst to provide an accurate estimation and prediction of market flow is one of the main causes of the downfall of the company. Their analyst had also failed to warn them about the impacts of their decisions and before the company had realized their mistakes, it is actually too late (Healy & Palepu, 2003). However, all the blame cannot be taken by the analyst, reports had also stated that Enron, as a whole, only focused on moneymaking, and will do whatever it takes to gain the profit that the company always wanted, even if the action is against the advice of the analysts (Seeger & Ulmer, 2003). For ethical considerations, if claims of corruption against Enron (Seeger & Ulmer, 2003) are true, then hiring new analysts will prevent bias because they are not affiliated with anyone in the company, and can make decisions which are based on logical thinking, and not on personal gain and interest. As for the cost, the company must allocate funds for the salary of the analysts at a regular time interval.
Step 3. Comparing the two solutions, Choosing to develop a training program will be more suitable for the company. There are three huge advantages. First, it will change the attitude of the employees. Unlike hiring analysts who do not care on the behavior of the employees, the training program might have changed their outlook towards their job, and realized the importance of communication and responsibility. Second, ethically speaking, this will create equality among employees because there will be no exception. Unlike analysts who are more likely to interact only with the higher officials, the training program will make all employees interact with one another regardless of position. Finally, the cost for training program will be less expensive in the long run because once the employees are trained, they can facilitate future training programs, unlike analysts who needs salary in order to function. Moreover, the role of analysts can be taken over once the company had gained communication and responsible leadership skills.
Step 4. If training program will be a policy at other similar situations, then there will be less problem in human resource management. The employees will be able to work efficiently in all situations because they were trained. They are also not working as an individual, but as a team, as all companies should be. Finally, and most important, they also know the value of teamwork and responsibility, and their greed towards money will be reduced, if not completely removed.
Conclusion
A communication and training program is an ethical decision for the development of an organization. It creates equal opportunities to all employees to develop both their individual and teamwork capabilities. It will also provide satisfaction for them because they will not only learn to handle the work more effectively, but also to develop their relationships with their colleagues. Lastly, training program also teaches the value of work to its participants. It does not only focus on skills development. These kinds of training programs always emphasize that skills alone do not make people completely successful. He has to realize the values and ethics of work before he can become accomplished.
References
Healy, P., & Palepu, K. (2003). The Fall of Enron. The Journal of Economic Perspectives, 17(2), 3.
Seeger, M., & Ulmer, R. (2003). Explaining Enron. Management Communication Quarterly, 17(1), 58.
