Principles of management in October contexts

¶ … decision makers, top management has an effect on the ethical practices within an organization. What does that say about the organizational culture or climate?

The fact that top management has an effect on the ethical practices within an organization means that business organizations typically reflect the ethical and moral values of their executives and top-level decision makers. In that respect, the organizational culture or climate, as relates to ethics, is substantially determined by the lead and examples set by its top-level executives and managerial decision makers (Caldwell, Hayes, Bernal, & Karri, 2008). Therefore, organizations lead by individuals with questionable ethical or moral values will probably reflect those questionable ethical or moral values at lower levels of the organization. Conversely, organizations lead by individuals with strong ethical or moral values will tend to reflect higher values that correspond to those of their leaders (Caldwell, Hayes, Bernal, & Karri, 2008).

How might this affect stakeholders (employees, stock holders)? The employees of Enron were walking around in a fog and every good thing that Enron may have done for the community has been overshadowed by scandal.

There are numerous potential implications of this relationship. For example, managers take cues directly from their supervisors about what is expected of them and how they are supposed to accomplish their operational objectives (Caldwell, Hayes, Bernal, & Karri, 2008). That means that the way that managers treat their subordinates -- and, by extension, the way that supervisors treat their subordinates -- is actually a function of the values and expectations set by executives and higher-level decision makers (Caldwell, Hayes, Bernal, & Karri, 2008). In the larger sense, this also usually means that the way that business organizations respond to legal obligations, public-welfare concerns, and matters of environmental responsibility (where applicable) are also substantially determined by the values of their founders and higher-level executives.

I would necessarily agree with the characterization that Enron employees were "walking around in a fog." The situation was actually much more complex than that. Specifically, the executives in question (Ken Lay and Jeff Skilling) established a completely dysfunctional and cult-like work environment in which Enron employees were selected, trained, and socialized to accept an extremely warped organizational culture (Tourish, 2005). Prospective employees were put through (intentionally) grueling ordeals that included all-day-long interviews with multiple interviewers that helped weed out, right from the outset, job applicants that would not accept inappropriate requirements as a condition of employment at Enron. That process also included indoctrination with the idea that all Enron employees were the "best of the best" and, together with high salaries and perks of employment, it helped cultivate a culture of self-delusion (Tourish, 2005).