Mgt/330

Week 3 Individual Paper

Daniel Cully Pratt

MGT/330

10-01-2011

Homer Johnstone

Management and Enron

The first person to propose the four basic functions of management—planning, organizing, directing, and controlling was Henri Fayol (Buhler, 1998). Planning is one of the most important functions out of the four. Through the function of planning, management sets forth the goals that the business will presumably work to meet. The function of planning then leads management to the planning of the actions that the business will need to take, as well as the actions which management will tell business’s workers to take so that the business’s goals will be met. Thus, the planning function of management is the motivation for the activities and the tasks in which an organization and its employees participate. A lack of a well-crafted plan will lead to a business being unable to set forth a course of action, and will cause it to be unable to effectively compete. Additionally, a plan that is poorly-crafted or that leads the organization to make unwise decisions can greatly damage that organization.

In the past, the approach that managers were expected to take in regards to the planning function was contingent upon the position of management in the organization that they held. For example, the belief was that “top management planned in the longest time horizon and engaged in more strategic planning. Middle managers planned in a medium time horizon and lower level managers engaged in more operational planning that was shorter term” (Buhler, 1998). Of course, this is no longer the case. Plans by all managers are understood to have an impact on the organization’s long-term as well as short term outlook. The actions of all managers at all levels will have an impact on their organization when those managers devise or implement plans. A review of Enron’s management actions demonstrates this belief.

One of the U.S.’s most successful companies was Enron Corporation....