Assignment Task 1: Organization Based study

Assignment Task 1: Organization Based study

Answer 1

Image result for Kingdom Holding

The company that I have actually chosen from the GCC regions is called Kingdom Holding which is actually located in the Saudi at a place known as Riyad, the Kingdom Holding company is considered to be a public company on the Tadawul, it consist of a team of experienced investment specialists, the founder chairman who was the prince called Alwaleed bin Tala and the Chief Executive Officer, Eng, Talal. The company is a diversified investment company and their main focus and interest is financial, provision of services, real estate, tourism and hospitality, they are also involved in media, entertainment, petrochemical, aviation and technology (Bolman & Deal, 2017).

The objectives of this company include carrying out investment that involves high performance and working with leading brands; they also have long-term investment approach whereby they are striving to provide long-term investment and also ensure that they have business with strong management teams which are capable of ensuring that they deliver brands which are recognized. The other objective that they have is to ensure that they extract value from the underperforming assets; they are also making ways to ensure that they extract additional values to some of the assets which are considered to be underperforming and also undervalued (Bratton & Gold, 2017).

Human resource manager plays important roles in Kingdom Holding Company since he ensures that there is the recruitment of the qualified staff members who are helping in the provision of the services and also production, HR ensure that the employees are hired based on their qualification into the company to provide quality services. HR also ensures that there is coordination of the employees with the organization and this has actually helped the company to grow since the HR has been playing this key role of ensuring that the employees are actually cooperating to maintain the standard of the company and also ensuring that quality services is provided in time without delay. He also ensures that the required training is actually given to the employees since most of the employees need to be trained depending on the field that they are doing to ensure that the company is producing the best services and products into the market. The other thing that HR has also been doing in this company is to ensure that there is development of the strategies, he or she gives the directives on how things are supposed to be done with the company so that at the end of the day all the objectives which have been put ahead are actually met in the company (Goetsch & Davis, 2014).

Answer 2

Employee’s commitment to the company is actually one of the key things that should actually be observed with the organization, we come to realize that in the Kingdom Holding Company there is good communication implementation which has been key since the company has been ensuring that there is flow of communication system within the company, this has actually been motivating the employees. The communication strategy implementation also ensures that each and every department is actually committed and they have been doing the right thing. The other activity that helps to build the commitment of the employees in this organization is that there is salary payment, with overtime pay and also off allowances, this has actually been ensuring that the company is growing well since most of the employees have been feeling that they are treated well and this attracts their attention to be committed with their duties and responsibilities with the organization. Training of the employees based on seminars and workshops also help the employees to actually become committed in the company, when the employees are taken for workshops and seminars they gain new experiences and new skills which are actually helping them to be committed to their work because they actually want to put into practice what they have learned during the workshops and the conferences (Hayes, 2018).

The strategic integration of all these activities are actually helping the company to have the best employees which promotes the quality services that the employees are providing because when there is good communication system with the company, good payment, high level of training, the company will be able to actually producer better services and this will help the company in meeting the objectives and the goals which have been set aside in the company, for instance, the Kingdom Holding company has the objective of providing real estate service and once there is commitment to the company everything will actually go well (Miner, 2015).

Answer 3

There are some external drivers which are actually underpinning the strategy of the organization, these factors may include factors like competition, we have realized that most of the companies are actually coming up which may be offering the same services and the same products into the market and this has actually underpinned the strategies of the company since the market is actually becoming flooded hence becomes a challenge to the company to go on with their strategic plans that they had planned before, Also the laws which are also underpinning the strategy of the company, for instance the government may be some restrictions that is actually baring the company from doing some of the activities or selling their products to some of the regions and this actually underpins the strategy of the company (Northouse, 2018).

Some of the economic factors that are actually influencing the HRM strategies include the economic conditions where in most cases there is economic downturn which has been affecting some of the countries and this makes it even more difficult for the company to actually hire people to work for them, the company also finds it difficult to expand due to different economic conditions in different areas that they are actually unfamiliar with and this makes it difficult for the Kingdom Holding to expand to other countries. The HRM finds it difficult to access or even explore areas where they can actually start new business opportunities (Thomas, 2015).

The company also faces restrictions from the government based on which courtiers the company can actually trade with and this forces the Human Resource manager to be under pressure struggling to stay within the law, of hiring the employees, training, compensation and termination of the employees. Demographic workforce is also another international factor that actually affect the HR department since most of the old HR officers are actually retiring and the company hires the new HR, the new HR has to take time to learn the new system of the company and how the company operates and this may affect the performance of the company since getting adapted to the new system of the company will take longer time (Bolman & Deal, 2017).

Answer 4

For the organization to start a business in a new location or in a new country HR has to actually consider some of the factors which actually enable the business to actually succeed within that particular location or even in that particular country, the organization will actually ensure that there is accessibility, this includes the transport links, that includes motorways and good roods, there should be property rental, there should be more commercial areas, therefore accessibility will actually help to determine if the business will grow in the new location. Another issue is about security, when you want to start a new business in a new location the organization should actually consider the security of that particular place because if security is not assured, the business may be affected by uncertainties and any criminal activities around (Bratton & Gold, 2017).

Competition is also another factor that is supposed to be considered, when an organization wants to start new business in the new location, they should actually consider the competition level of that particular place to help in looking for a place that is more secure and with little or no high competition because that will help the business to actually grow well within that particular place. Business rates are also supposed to be considered as cash flow is actually critical to help in determining the viability of the business especially in payment of bills in that particular area, It is important to actually consider the business rates which includes the rent, the utility bills and the taxes in the area to ensure that the business can actually afford the premises. The Human Resource manager should actually look at the skill in that particular area where the business is supposed to be established this includes taking into account the employment rate in that particular area, it is actually good if the organization ensures that it recruits the skilled workers who will actually help the business to grow well in that particular area (Goetsch & Davis, 2014).

Answer 5

Employees relations is actually considered to be important since it helps in increasing the productivity, Strong employees relationship helps in the process of increasing the productivity with the organization, in the Kingdom Holding the strong employees relations that have been created has been key since it has actually been helping the employees to work together and increase the productivity within the organization, this is because the employees are always satisfied with the management and this motivates them to ensure that they increase the productivity of that particular organization. The importance of good employee reactions is actually helping in increasing the loyalty among the employees, we have realized that in the Kingdom Holding the employees have actually become loyal to the organization since they are in good relations, which subsequently motivates them and helps to ensure that the business goes well with the organization. Such only happens when the management is actually focused and concerned about its employees. When the rate of loyalty is higher, it will lead to increase of the production of the services within the organization (Hayes, 2018). Key factors that make Kingdom Holding strong in employee relations and which can be further intensified to strengthen the employee relations in Kingdom Holding are:

· The employees work together as a family and as a result the organization is a happy place to work at.

· An individual feels motivated in the company of others whom he can trust and fall back on whenever needed. One feels secure and confident and thus delivers his best.

· Healthy employee relations also discourage conflicts and fights among individuals. People tend to adjust more and stop finding faults in each other. Individuals don’t waste their time in meaningless conflicts and disputes, rather concentrate on their work and strive hard to perform better.

· A healthy employee relation reduces the problem of absenteeism at the work place. Individuals are more serious towards their work and feel like coming to office daily. They do not take frequent leaves and start enjoying their work. Employees stop complaining against each other and give their best

· Working as a team in taking decisions and listening to every member of the team is so important

· Sharing work fairly amongst the team members s vital

HRM has the mandate to ensure that there is good employment legislation with the organization, some of the regulations indicates that employment should be offered to the qualified personnel, there should also be fair recruitment of the employees, fair treatment of the employees. These have been some of the regulations that the department of the HR should have been keen and observe but there has been some challenges. There are cases where employee have been hired based on their qualifications but they failed to perform or produce within the organization and this becomes a challenge, some of the hired employees do not have enough skill and this forces the HRM department to actually incur extra cost to ensure that the employees are actually trained (Northouse, 2018).

Answer 6

Kingdom Holding’s Performance Management Process involves the following steps:

Employee Self Evaluation

The self-evaluation is the first step in the performance review, and where the employee evaluates himself in the five criteria described above (on five grades ranging from “below expectations” all the way to “significantly exceeds expectations” and invited to share examples of his actions that support these grades), and highlights his main accomplishments for the last cycle .These accomplishments will appear in the next step (360-degree reviews) to reviewing peers, who will then be asked to assess their proximity with these projects.

360-Degree Feedback

Kingdom Holding uses 360-degree review process which serves the purpose of giving managers a holistic picture of their direct reports, since they may carry a biased and restricted impression of reports’ impact and behavior.

The process starts with a back-and-forth between employee and manager, so as to pick a representative, fair sample of peers to participate. The employee suggests a shortlist, which is discussed and validated with the manager, taking into account how close the peer was to the employee’s contributions, and how well he/she can assess the employee’s performance.

Peers are expected to give assessments in three different media: strengths, or things that the person should keep on doing, and weaknesses, or things that the person should consider working on/developing; rating each other on the five criteria discussed above; and finally, commenting on the staff’s contribution to specific projects.

Calibration

After all data has been collected, in the form of self-reviews and peer-reviews (or what’s known as 360-degree feedback), and results achieved are understood, managers draft a rating for their employees, based on the following scale:

1. Below Expectation

2. Needs improvement

3. Meets expectations

4. Exceeds expectations

5. Significantly exceeds expectations

Calibration is the process of checking the accuracy of a measurement instrument by comparing it to reference standards. Calibration is therefore of crucial importance in ensuring the fairness of performance ratings. It’s where heavy-handed raters are identified and discounted for.

Outputs

The calibration meetings output each and every employee’s performance rating for the period. After the rating is closed, managers go on to hold two meetings: one where feedback is given, taking into account peer reviews and managers’ impressions of their employees, and another where compensation and promotion decisions are communicated.

The two conversations are held in different meetings and at least a month apart from each other in order to ensure their quality. Kingdom Holdings understands that a compensation-focused employee is no good a listener of feedback, whether compensation expectations were not met, met, or exceeded

Significance in enhancing the overall performance of Kingdom Holding

Involve Employees in the Planning Stage

The mere making of plans alone will not help you to run your business successfully. You must also focus on the appropriate ways to get business tasks done. One way of doing this efficiently is to involve your employees in the planning process. This will not only boost their morale and confidence, but also help you avoid any communication gaps in the process.

Additionally, it will also help in providing them with a clear picture of what you expect from them and what they need to accomplish.

Monitoring the Progress of Your Employees

Just as revision of business plans is sometimes necessary for the success of your business, measuring the performance of every employee is also important. This ensures that tasks are efficiently completed on time and on or under budget. It also points out to you any shortcomings of either your staff or business plans, and helps you to take the appropriate corrective actions.

Ensuring All Around Development of Employees

Performance management gives you the tools to instill the desired qualities in your employees in order to get the job done. Development is not limited to only individuals in your workplace, but also addresses the performance of the team as a whole. All around employee development not only ensures the personal and professional growth of your employees, but also the expansion and improvement of your business.

Evaluation of Individual Performance

Evaluating and rating the performance of your employees on an individual basis is essential. This gives them a clear picture of where they presently stand, areas that they need to work on and what they are good at. This way, they can focus more on their weaknesses and work to strengthen those areas.

You should make it company policy to issue performance reviews while providing your employees with the feedback that they need to perform better at their jobs. Remember – just as it is important to point out your employees’ weaknesses and shortcomings, it is also essential to commend them on their strengths.

Rewarding Your Employees

Rewarding and appreciating your employees’ efforts ensures that their level of their performance and consequently the performance of your business is not compromised. It ensures optimum productivity, performance and maximum profitability.

Rewarding your staff for a job well done not only enhance their performance but also serves as a tool to keep them motivated. Therefore, performance management is an effective system that allows you to achieve the financial goals of your small business.

Answer 7

Different Management and Leadership theories are adopted by Kingdom Holding to achieve

The Trait Theory

This theory is derived from ‘the great man’ theory, which identifies the key characteristics of a good and successful leader. The theory assumes that people inherit certain qualities and traits that make them better suited to leadership. They have personality, dominance, charisma, self-confidence, achievements and ability to formulate a clear vision

It is believed that through this approach critical leadership traits could be isolated and that people with such traits could then be recruited, selected, and installed into leadership positions as in some cases with Kingdom Holding.

Below are some of the main leadership traits and skills identified by Stogdill in 1974:

Adaptable to situations, Alert to social environment, Assertive, Cooperative, Decisive, Dependable, Energetic, Persistent, Self confident, Tolerant, Creative and Persuasive.

Impact on Organizational Strategy

A leader with these traits and skills is able to drive the Kingdom Holding. It is for this reason that Kingdom Holding seeks to recruit people of such traits and skills. At Kingdom Holding such charismatic figures are needed to motivate their team or employees. Before a leader leads other, it needs to lead itself, this is called self-leadership. It begins with introspection and development of one’s emotional intelligence. They need to explore their inner self before they lead others.

Leader is responsible for everything the team does or fails to do. Since they are in direct contact with employees so they need to have following traits and act as a role-model.

At organizational level, leaders are required to influence the whole organization by managing the cultural norms, rewards and recognition programs, and communication.

Their self-confidence enables them to challenge change, and their communication skills helps them to gain trust of others, since they have persuasion power.

Transformational Theory

James MacGregor wrote in his Burns ‘Leadership’ was the first to put forward the concept of

“Transforming leadership”. To MacGregor transforming leadership “is a relationship of mutual stimulation and elevation that converts followers into leaders and may convert leaders into moral agents”. He also identified that: “Transforming leadership occurs when one or more persons engage with others in such a way that leaders and followers raise one another to higher levels of motivation and morality”

This theory is based on charismatic leaders, who have additional characteristics such as vision and development, and abilities to motivate it followers.

Impact on Organizational Strategy

Howell and Avolio (1999) assert that transformational leadership with its five key pillars – vision, inspiration, stimulation, coaching, and team building. And a leader with such characteristics will bring tremendous payoffs in business performance and innovation.

Transformational theory of leadership helps in empowering the employees to actually find their internal motivation to succeed, this has actually been helping in the Kingdom Holding company since most of the leaders have been applying the theory to help the employees to be motivated, it also helps in that it provides chances for the employees to air out their new ideas which can be essential to the company, and this helps in building the company by creating positive cooperates cultures and this makes the employees of the Kingdom Holding come to work.Transformational leadership also helps in appealing the employees’ ideas, morals and the values within the organization.

There are certain transformational leadership factors identified by Nahavandi, which are:

-Intellectual stimulation to generate new ideas and empowerment

-Charisma and inspiration to overcome resistance to change,

-Individual incentives and consideration to motivate and encourage the followers.

Since our current business environment is very dynamic, so does the need for change in leadership style. People values most on personal skills and development and prefer to work outside of the organizational boundary. Hence a Transformation theory is required.

Devise a Leadership Strategy that supports organizational direction

As per Leadership Theories, a good leader has certain characteristics and skills. Leadership is not only a function of a position on an organizational chart, but also individual performance.

Leadership Strategy for Kingdom Holding

Self-Leadership:

Before Leaders commit to lead others, they need to commit to themselves. Leaders need to ensure that they have qualities and characteristics of a good leader. They need to create a personal vision. They need to explore themselves first. What they can achieve with their talent, tools and time. They need to create a big picture of their vision and align it with that of organisation. Once that is down, the next step is to bring their followers on board, and align their motivation with Kingdom Holding’s strategy.

To create a charismatic figure or to act as a role-model, leaders need to show concern for their employees. In the past Leaders were in control of everything and they were driving the teams. They were doing what they wanted to do. Since the environment is changing so leaders need to transform themselves. They should give what the teams need not what they want. Leaders need to be available to the employees all the time, this is done by implementing open-door policy in the organization. Leaders need to be democratic and should have a two way communication with the followers, unlike the old one-sided communication. This way they can get good feedback and complete tasks.

Team Leadership

This is very important in order to empower team member and their networking activities. Everyone has different skills and fields of specialization. It is important for leaders to ensure that team members are selected on the basis of their field of specialization, unique talents, skills and share a same vision. Every team member need to play its own part and should not depend on others. Empowerment is promoted in the project teams, which enables them to make certain decisions. When leaders are acting as a role-model they motivate the team and show them the good picture of the future.

Mentoring

Mentoring is another good strategy, for project based teams. It acts in two ways, one way is that people learn from their good leaders. The formula is to observe their leaders and learn from them. This is the idea of transformational leadership theory; the followers become leaders for others. On the other side it helps team-members to develop their personal skills. A sales assistant can follow the steps of their team leader and become a leader or a role model for other team-members, this way it can acts as a motivating factors. Leaders acting as a mentor need to provide assurance and personal reflective space, coaches set goals, identify solutions to problems, and provide feedback on the subordinates’ performance.

Assignment Task 2: Case Study

Answer 1

Image result for enron company logo

Reasons that led to the closure of ENRON

Four management truisms explain the Enron collapse. The firm ignored solid business practices and the result was a disaster that could have easily been avoided.

The first truism is simple: people do what they know will reward them, and refrain from actions that invite punishment. Skilling only wanted the smartest, most accomplished individuals working for him. He sought after them in the best MBA schools and challenged the top competing companies for them. While the work was difficult and the hours long, Enron committed to providing the luxurious amenities that kept their employees working hard. There weren’t caps on these rewards, which pushed Enron employees even further (Thomas 1). Skilling set up an environment that was cut-throat and only cared about profit, which fostered an unhealthy workplace that was tolerant of executive wrongdoing. Non-standard accounting techniques and deal inflation became common practice, which caused Enron to collapse when they were caught. Enron employees knew what was expected of them based on what actions rewarded them.

Even the executives of Enron were pressured to keep up with the growth from the late 90’s. They knew that this type of growth was not sustainable, but continued the same practices never the less. These executives were rewarded for the consistent growth and knew that if it did not continue, they would be punished by credit agencies and trading partners (Sims and Brinkmann 245). This line of thinking ultimately led to major corner cutting during the exercise of very suspicious and misleading practices. This corner cutting then proceeded to plunge the company into massive debt without a reliable back up option. Unfortunately, everyone is shaped by incentives, even executives members. In fact, once they tasted success they were even more influenced by the rewards and punishments.

The Performance Review committee fueled a dog-eat-dog environment that rose up the top employees and axed the lower ranking ones. People were harshly discouraged to ask questions about the business dealings with the company. Very few people were willing to raise objections in this environment (Tonge, Greer, and Lawton 12). The forced group-think led to a broken system of checks and balances. If employees raised concerns they were punished by demotion or firing, which was a nonstop cause for the company’s broken moral compass. Left unchecked, illegal deals were made and accounting fraud became rampant. The entire system was fueled by rewards, punishments, and fear. Everyone in the company was subject to it. Even the ethical people in the company were misled, pressured, or scared into doing the things that the company wanted them to do.

The second truism states that all organizations don’t have the same moral standard (Crews 8). Enron’s risk manual supported the idea that reported earnings were merely what the accountant wrote down instead of a solid and reliable strategy for continual growth. The company fostered the philosophy that corporate and personal wealth could be captured by cutting corners and creating false accounting records (Stewart 119). There was a culture about risk management and wealth growth techniques that looked to the accounting records as an easy scapegoat to ventures that were not actually profitable. This line of thinking quickly led to the use of non-traditional and illegal accounting practices and then the collapse when the records were realized to be fraudulent. It created a system where the firm relied on money that was never actually theirs. Employees were taught by the risk tolerance practices that it wasn’t necessary to share the ethical standards of other organizations. What was important to them was a positive number on the balance sheet and nothing else, a stark contrast to other companies.

Some companies approach the issue of underperformance with restructuring positions or relocating employees. Another approach is to fire workers without any second chances or support from the organization. Enron believed in punishing the lowest fifteen to twenty percent with dismissal, an act that was managed by peer reviews. Therefore, the culture of Enron was one of distrust and paranoia (Sims and Brinkmann 251). Peer reviews caused mistrust and management was able to get away with many unethical practices with little to no fear of being challenged. Management’s arrogance then led to unregulated practices that fostered debt creating strategies instead of profit creating ones like they reported. This also led to poor decision making and unsavory business practices that eventually imploded Enron. Ethical companies handled employee issues with respect and valued an employee’s opinion. Enron handled its problem by creating fear in its organization and removing those that stood against them. The blatant disparity between these types of companies depicted a clear image of the differences in moral code.

When officials, both external and internal, decide to ignore essential ethical practices due to personal greed, it will most likely lead to investor loss whether or not regulations are enforced. This greed does not benefit the corporation, but instead simply destroys those interested parties that invest in the organization (Cunningham and Harris 29). The greed of high placed executives never was intended to actually help the company at all. Greed caused the downfall of both the corporation by developing a system where no one was actually looking out for the good of the company. The hunger fueled executives to make decisions in their own personal interest, at the sacrifice of the company, which led to the Enron collapse. The continual chase for more money set Enron apart from other more ethical companies and it became apparent where their priorities were. This company clearly was not like many others.

The third truism states that people and the organizations are not the same (Crews 1). Both Jim Alexander and Sherron Watkins, employees of Enron, informed Lay that they were going to get into trouble for the ethics break. Lay ignored these messages and continued business as usual and even denied that there were issues with accounting, trading, or reserves (McLean, Birnbaum, and Kahn). Both Alexander and Watkins tried to talk to the top executives and let them know that things were being noticed, but the culture at Enron was to look the other way and keep working. By ignoring the warning signs, Lay doomed the business to eventually fail due to disregarded malpractice and unchallenged illegal activity that soon became realized by the public. In this example the organization clearly had a different mindset than the two people that had concerns. They wanted to do the right thing, but the organization’s mentality was completely different.

Partnerships easily and efficiently raised money for Enron, but came at the cost of setting up promises that could later not be kept. For example, Project Braveheart was an idea created with Blockbuster to deliver movies over phone line. Enron documented $110.9 million in earnings shortly after the partnership was made. The project fell apart not long after its creation, but the profits were never seized (Prindle). The investments that Enron made were largely fictional and rarely actually profitable. They would promise partners money that had also already been guaranteed to a different partner. This eventually came crashing down as investors called in what was owed to them, leading to the Enron collapse. The partners had become part of the organization, but in no way did they want the same things that Enron truly wanted. The partners wanted a profitable relationship for both companies, but the organization just cared about itself. Hence, Enron and its associates were very different.

Skilling obsessed over the business and had no problem doing whatever it took to be the best in the industry and continuously lied about financial numbers (McLean and Elkind “The Guiltiest”). His strong personality, which often was described as arrogance, led to terrible ethical choices and if he thought that he had to change fiscal numbers he would. These compromises, driven by his reckless personality, crashed the firm into the ground. This example works in reverse compared to the other third truism illustrations. In this case it was actually the individual that negatively affected the organization. Skilling shaped the company how he wanted it to be, despite what it cost.

The fourth truism focuses on how ethical scandals are often not stopped due to useless in-house and external oversights (Crews 10). Deregulation laws in December 2008 gave energy traders too much power over prices. Consequently, Enron encouraged power blackouts in California in order to increase the price of reliable energy by up to 20x its normal value (Wikipedia). The deregulation of energy traders led to overconfidence in investments that Enron made because they thought they were in control. Arrogance caused them to risk more than they could afford, and when the market didn’t end up how they thought, it caused the collapse. The problem with the deregulation was that Enron was trusted to behave ethically. This oversight by officials gave Enron the perfect opportunity to take advantage of the situation and its customers.

Internal and external auditing must be done be separate corporations in order to be ethical. Arthur Anderson acted as both roles for Enron and in turn allowed them to partake in many practices that would normally not be acceptable. Anderson ignored the unethical business practices and instead supported a corporation paid for their massive consulting fees (Cunningham and Harris 43). Anderson wanted the streamline of money that came in with Enron’s partnership and it got to the point that they were fine breaking rules if it meant they could continue to make money. The accounting shortcuts they used to satisfy Enron were illegal and once discovered, caused the Enron collapse. Anderson was clearly in a conflict of interest and should not have been allowed to do the financial statements of Enron. If there were better restrictions in place the ethics scandal would not have been able to happen.

Enron strategically stacked its house with political representatives, well-connected up-and-comers, and well-known public figures. They placed people of similar mindset in the board of directors and audit committee in order to have someone in their corner when they needed them (Chandra 107). By hand picking the people of importance in their environment, Enron was able to break the rules when they needed to. Having their people on the board of directors and audit committee allowed them to essentially do what they needed to provide results, which directly led to many illegal activities, and consequently the breakdown of Enron. Regulations should have stopped Enron from placing their own people in external positions of power. The conflict of interest begged for abuse of the rules.

CONSEQUENCES

Enron, as a company, completely fell apart after the collapse. It was forced to renounce earnings with multiple partnerships such as Chewco Investments and JEDI. Then the company was forced to recall earnings all the way back to 1997, which only summed to $586 million and was only 20% of what had been reported. The stock prices fell to mere pennies and all consumer and financial buoyancy was lost. Shortly after, Enron declared bankruptcy (Prindle).

Enron’s shareholders did not benefit from the greed of the executives. Those that had their pension funds financed in the company lost almost everything. Consequently, the SEC and Congress worked swiftly to begin immediate restructuring to reduce losses like those experienced, in the future (Cunningham and Harris 29). A $40 billion lawsuit followed the collapse, demanding compensation for the shareholders’ worthless stock. The collapse destroyed more than $2 billion in pension plans (The New York Times).

The employees of Enron also greatly suffered and in most cases lost everything that they had invested in the company (McLean and Elkind “The Guiltiest”). One employee, Charles Prestwood, lost $1.3 million in the Enron collapse. Money entrusted in the company in retirement savings or investments disbanded overnight. After the collapse, the SEC stated that they would try and recover as much of the lost money as they could in their judicial system (The New York Times).

Enron executives also felt the consequences of the collapse. Paula Rieker was charged with insider trading when she sold just under $1 million worth of shares just a week before the collapse. Skilling was charged with 24 years in prison due to mostly charges of securities fraud. Lay was charged with 45 years in prison, but died before the sentence was scheduled. Fastow was sentenced to 10 years in prison with no parole (Wikipedia).

Creditors involved with Enron struggled to receive all of the money that was owed to them. Enron sold CrossCountry Energy for $2.45 billion in order to address some of the credit outstanding. When its last business was sold, it left Enron without any assets. In 2007, the company’s name was changed and set a goal to completely repay all creditors and end all its activities (Wikipedia).

WHAT COULD HAVE BEEN DONE DIFFERENTLY AT LEVEL OF COMPANY & HR STRATEGY

The first lesson that I learned was that there needed to be significant reforms in the accounting practices that corporations utilize. It is not enough to assume that they are doing the right thing and it is important to always be skeptical (Crews 1). Conflicts of interest are an extremely detrimental crutch in accounting and it made the Enron collapse essentially imminent. By restricting which accounting firms can provide services to an organization and also controlling how those firms are getting paid is a good step in eliminating conflicts of interest.

The second lesson is that the ethical choices of corporations need to be more closely monitored. If an organization is left unchecked, it has the ability to abuse the system and do whatever it wants. I believe that due to the Enron collapse people will pay more attention to how corporations operate even if they cannot directly control the ethics of the company (Silverstein). At least in this case there will be significant pressure to do what’s right.

The final lesson that I learned was organizations can be as ethical or unethical as they want. They will treat their employees, shareholders, partners, and creditors however they want. Sometimes corporations will act in their best short term interest, but there’s also the option to behave properly and look at the long term goals. Risk tolerance can be a good thing, but it is up to the corporation to decide how much risk they are going to take and at what cost are they going to take risks (Crews 8). We can do our best to regulate and criticize, but in the end it’s their call. We can only hope they do the right things.

Answer 2

As CEO of this company what I could have actually done to revive this company is to pivot and change the direction. In this case, pivot simply means that I could actually change the business model of this particular company because this could actually help in attracting the trust of the customer that were lost when the business collapsed. The other step that I could also take to ensure that the company is revived as the CEO is to rebrand the business because this could actually help the company to start gaining the customers direct from the scratch, I could actually rebrand the not only the logo of the business but I could rebrand everything that pertains those company so the at the end of the day people could not have the negative mentality of the collapsed business (Arnoldi & Villadsen, 2015).

The other way to ensure that this business is actually revived is by ensuring that I niche down and focus on one strategy that could lead the business to survive, one of the things that I have realized is that most of the CEO is actually involving many activities in the company and this makes the company lose concentration of important activities that can actually lead the business to achieve some of the set goals and the objectives with the company. Therefore for my case, I would focus mostly on the most important issues that lead the company to be successful such as training and recruiting qualified employees with the organization (Kuchhal, Verma & Mandawat, 2016).

The other important thing that I would also do to ensure that I revive the company is to do the situation analysis, situation analysis could actually help me to know what led to the collapse of the company and then I could pick from there and try to fix the problems that led to the collapse of the business, for instance, we have realized that some of the companies collapse because there is no proper audit within the company, no customer satisfaction. These are some of the issues that I could also look at and get the proper way of handling them in order to ensure that the business goes well (Masera, 2016).

Furthermore, as CEO, I will treat my employees, shareholders, partners, and creditors in a correct manner that will make them happy and focus on the company core strategy of producing good results and profitability. I will further ensure to mitigate all levels of risks taken

The other thing that I could also as the CEO have customer-focused approach, this could actually help in ensuring that the business is actually running well by coming up with some of the best ways to ensure that as a company we win the trust of the customer by providing them with the best services and listening to their complaints and reacting to the complaints without any problem to help maintain them for the success of the company. I would also invest in the trust because this is also key. It would help the company to come up strong when the employees are working together for the success of the company. When the employees are actually trusted with the organization they will always cater to the clients in good ways that will attract most of the clients to come to the company and this will create good platform for the company to revive at the end of the day since it has a way of ensuring that it is functioning well without any problem that is happening in the company (Arnoldi & Villadsen, 2015).

Assignment Task 3:

Answer 1

Mazda

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Mazda aims to be a company staffed by people who enjoy their work. To this end, the Company promotes personal development revolving the principles of the Mazda Way. Mazda also regards respect for human rights as fundamental to its corporate activities, and is actively and sincerely committed to human rights protection activities.

Basic Approach to Human Resources

Mazda recognizes that people are its most important resource and aims to be a company staffed by people who enjoy their work. To this end, the Company promotes human resources training based on the Mazda Way principles that are shared throughout the entire Mazda Group worldwide. Also, the Company has established Group-wide human resources policies and measures along with promotion of various initiatives.

Human Resource Polices

Mazda engages in regular communication with Group companies worldwide, and each Group company is working together to create further opportunities for interaction among personnel and cultivate a climate based on a shared point of view.

Overseas Group companies have established a system to conduct management strongly rooted in local communities. By appointing locally hired personnel as managers and above, the Company makes global efforts to create a comfortable working environment tailored to the culture of each country and region.

Realization of Diversity

Mazda respects the diversity of its employees, and the Company aims to foster a corporate climate in which every employee can express his/her individuality while working alongside others to contribute to the Company and society. Mazda also works on a variety of programs to enable its employees — a diverse range of people with different values and lifestyles to enjoy their work and find a healthy balance between their work and personal lives.

Increasing the Employment and Range of Opportunities for Female Employees

Through enhancement of measures promoting work-life balance and other initiatives, Mazda is striving to cultivate a workplace in which women can work comfortably, with the ratio of female employees steadily increasing.

Mazda has set the goal of increasing the number of female middle managers and above to three times the figure as of March 31, 2014 by 2020.

To achieve this numerical target, the Company has promoted initiatives according to voluntary action plans. Recently Mazda submitted these voluntary plans to the authority concerned as the business owner’s action plans, based on the Act of Promotion of Women’s Participation and Advancement in the Workplace.

In the future, Mazda will continue to draw up and implement individual development plans for female candidates for middle and above management positions and also further promote the opportunities for female employees, by improving training and promoting female employee recruitment.

Best Match of People, Work and Rewards

Mazda has put in place a system to ensure that each employee understands their work evaluation results and ability level assessments, and feels that their growth and performance are appropriately reflected in their compensation. Specifically, since 2003, instead of using gender, age, nationality, or years of service as criteria, employees are graded according to their ability level (production and medical staff) and work level (administrative and engineering staff), so that individual employee’s performances are directly reflected in their base salaries and bonuses.

Choice and Self-Accomplishment

Mazda provides various opportunities for employees to take the initiative in setting their own growth and performance goals and doing their best to achieve them, so that ultimately, such efforts will bring great results to the Company. Mazda offers a range of education and training programs to assist employees in developing their careers and improving their skills according to their job types and positions.

Chrysler

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When it comes to the strategies of Chrysler which is an American based organization, they are more focused on getting their jobs done, irrespective of the condition of the employees. Female employees are also not given much importance in terms taking a job position. At the time of bankruptcy, laying off employees was not a big loose for them, as job security is not a major concern in America as it has more number of immigrants, any citizen living more than 5 years in US gets a green card. America has more of individualism as compared to Japan. In America business relation are strictly followed, managers have the direct ownership to terminate the employee if the performance is poor. They do not consider workplace as family and believe to be on a contractual relation in terms of working hours. They prefer to invest again on research and development of employees and hiring new employees. America having higher level of democracy, every citizen has “liberty” and “justice” rights.

Chrysler’s HR approach during the recession was also different from that of Mazda in that the low level employees were affected the most with high salary cut while top management was not badly affected. In the Chrysler company the situation also seemed to be similar but a bit different since the HR played the evolving role of ensuring that he or she helps in settling the companies issues that may lead to collapse of the company, in this kind of the decision making It actually favored some of the whiles some of the employees were pressed since their salary deduction was high and it was not equal (Jandt, 2017).

The above explanations show that there are different approaches that the companies took to ensure that they regain their strength to the market. Some of the international HR strategies that these companies took indicate that Mazda and Chrysler encountered this starkly situation because we have realized that HR has got evolving role and this indicates that he or she has the mandate to ensure that there are strategies which are helping in providing solutions to the company when the company is actually faced with some hash situation, for the case of the Mazda it actually forces the mangers to come up with the best solution that would help in ensuring that each and every employee contributes to the revving of the company and this led to total agreement that actually made the Mazda cut off the salary of each and every one employee regardless of the position (Hareven, 2018).

The case that might have led these companies to find themselves in that severe situations is that their management did not strategize their decision making when carrying out their business operations and this led to the companies to find themselves in the desperate situation of bankruptcy hence rendering each and every employee to suffer since the management did not have good decision making for the company to go thrive. Miss allocation of the funds by the management could actually also led to the hash situations that these two companies faced since the stakeholders did not actually consider the fact that when fund is not properly used in the company it leads to collapse of the company since there will be no funds to run the company (Spring, 2017).

Answer 2

Hofstede Insights- Mazda vs. Chrysler

Power distance

Japan

This dimension deals with the fact that all individuals in societies are not equal – it expresses the attitude of the culture towards these inequalities amongst us. Power Distance is defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally.

At an intermediate score of 54, Japan is a borderline hierarchical society. Yes, Japanese are always conscious of their hierarchical position in any social setting and act accordingly.

USA

The fact that everybody is unique implies that we are all unequal. One of the most salient aspects of inequality is the degree of power each person exerts or can exert over other persons; power being defined as the degree to which a person is able to influence other people’s ideas and behaviour.

This dimension deals with the fact that all individuals in societies are not equal, and it expresses the attitude of the culture toward these power inequalities amongst us. Power distance is defined as the extent to which the less powerful members of institutions and organisations within a country expect and accept that power is distributed unequally. It has to do with the fact that a society’s inequality is endorsed by the followers as much as by the leaders.

Individualism

Japan

The fundamental issue addressed by this dimension is the degree of interdependence a society maintains among its members. It has to do with whether people´s self-image is defined in terms of “I” or “We”. In Individualist societies people are supposed to look after themselves and their direct family only. In Collectivist societies people belong to ‘in groups’ that take care of them in exchange for loyalty.

Japan scores 46 on the Individualism dimension. Certainly, Japanese society shows many of the characteristics of a collectivistic society: such as putting harmony of group above the expression of individual opinions and people have a strong sense of shame for losing face

USA

The fundamental issue addressed by this dimension is the degree of interdependence a society maintains among its members. It has to do with whether people´s self-image is defined in terms of “I” or “We”. In Individualist societies people are only supposed to look after themselves and their direct family. In Collectivist societies people belong to “in groups” that take care of them in exchange for unquestioning loyalty.

The fairly low score on Power Distance (40) in combination with one of the most Individualist (91) cultures in the world reflects itself.

Masculinity

Japan

A high score (Masculine) on this dimension indicates that the society will be driven by competition, achievement and success, with success being defined by the winner / best in field – a value system that starts in school and continues throughout organisational life.

A low score (Feminine) on the dimension means that the dominant values in society are caring for others and quality of life. A Feminine society is one where quality of life is the sign of success and standing out from the crowd is not admirable. The fundamental issue here is what motivates people, wanting to be the best (Masculine) or liking what you do (Feminine).

At 95, Japan is one of the most Masculine societies in the world.

USA

A high score (Masculine) on this dimension indicates that the society will be driven by competition, achievement and success, with success being defined by the “winner” or “best-in-the-field”. This value system starts in childhood and continues throughout one’s life – both in work and leisure pursuits.

A low score (Feminine) on the dimension means that the dominant values in society are caring for others and quality of life. A Feminine society is one where quality of life is the sign of success and standing out from the crowd is not admirable. The fundamental issue here is what motivates people, wanting to be the best (Masculine) or liking what you do (Feminine).

The score of the US on Masculinity is high at 62, and this can be seen in the typical American behavioural patterns. This can be explained by the combination of a high Masculinity drive together with the most Individualist drive in the world.

Uncertainty avoidance

Japan

The dimension Uncertainty Avoidance has to do with the way that a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? This ambiguity brings with it anxiety and different cultures have learnt to deal with this anxiety in different ways. The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these is reflected in the score on Uncertainty Avoidance.

At 92 Japan is one of the most uncertainty avoiding countries on earth.

USA

The dimension Uncertainty Avoidance has to do with the way that a society deals with the fact that the future can never be known: should we try to control the future or just let it happen? This ambiguity brings with it anxiety and different cultures have learnt to deal with this anxiety in different ways. The extent to which the members of a culture feel threatened by ambiguous or unknown situations and have created beliefs and institutions that try to avoid these is reflected in the score on Uncertainty Avoidance.

The US scores below average, with a low score of 46, on the Uncertainty Avoidance dimension.

Long term orientation

Japan

This dimension describes however society has to maintain some links with its own past while dealing with the challenges of the present and future, and societies prioritise these two existential goals differently. Normative societies. which score low on this dimension, for example, prefer to maintain time-honoured traditions and norms while viewing societal change with suspicion. Those with a culture which scores high, on the other hand, take a more pragmatic approach: they encourage thrift and efforts in modern education as a way to prepare for the future.

At 88 Japan scores as one of the Longest-Term Orientation oriented societies. Japanese see their life as a very short moment in a long history of mankind.

USA

This dimension describes how every society has to maintain some links with its own past while dealing with the challenges of the present and future, and societies prioritise these two existential goals differently. Normative societies. which score low on this dimension, for example, prefer to maintain time-honoured traditions and norms while viewing societal change with suspicion. Those with a culture which scores high, on the other hand, take a more pragmatic approach: they encourage thrift and efforts in modern education as a way to prepare for the future.

The United States scores normative on the fifth dimension with a low score of 26.

Indulgence

Japan

One challenge that confronts humanity, now and in the past, is the degree to which small children are socialized. Without socialization, we do not become “human”. This dimension is defined as the extent to which people try to control their desires and impulses, based on the way they were raised. Relatively weak control is called “Indulgence” and relatively strong control is called “Restraint”. Cultures can, therefore, be described as Indulgent or Restrained.

Japan, with a low score of 42, is shown to have a culture of Restraint. Societies with a low score in this dimension have a tendency to cynicism and pessimism.

USA

One challenge that confronts humanity, now and in the past, is the degree to which small children are socialised. Without socialisation, we do not become “human”. This dimension is defined as the extent to which people try to control their desires and impulses, based on the way they were raised. A tendency toward a relatively weak control over their impulses is called “Indulgence”, whereas a relatively strong control over their urges is called “Restraint”. Cultures can be described as Indulgent or Restrained.

The United States scores as an Indulgent (68) society on the sixth dimension.


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