Enron and Corporate Scandal

When analyzing Enron’s collapse, it is important to keep in mind the specific action that landed it into trouble. Enron’s main wrongdoing was their use of “creative” accounting schemes. In an attempt to boost their financial records, it created subsidiary companies and subsequently transferred liabilities to those companies. Enron’s accounting scandal ultimately led to its demise. Thus, it seems reasonable to place the blame of the debacle on the people directly responsible for overseeing and approving the legitimacy of these accounting records. The people I am referring to are Jeffery Skilling and Kenneth Lay (CEOs), Andrew Fastow (CFO), and Arthur Andersen (auditing firm).

The Enron case is one of many corporate scandals, and it is unlikely to be the last. Corporations’ primary mission is to earn profits for its shareholders. This objective often comes in conflict with legal and moral standards. Sometimes the desire to earn money outweighs the risk of legal consequences. As long as businesses are greedy, there will always be cases of this scenario.

I do believe, however, that good leadership can reduce instances of corporate scandal. For instance, a morally conscious CEO/CFO will not sign an accounting document with the knowledge that the document is untrue and misleading. Enron may not have gone down had Skilling and Fastow been honest with their business dealings. It amazes me how easily the bad leadership of a few people can destroy a corporate. Conversely, the good leadership of a few people may not be enough to save one.

-Jack Sun

Bad Leadership & Twitter

On Monday, March 21st, Twitter celebrated its 5 year anniversary. After reading a recent article in the New York Times called "Teaching to the Text Messsage" by Andy Selsberg, I was contemplating how to create a writing assignment that challenges students to write both critically as well as concisely.

Selsberg claims that "learning how to write concisely, to express one key detail succinctly and eloquently, is an incredibly useful skill, and more in tune with most students’ daily chatter, as well as the world’s conversation."

So, yesterday I gave a pop quiz in my Bad Leadership class.

The question: What is the difference between bad & good leadership?


Answer must be 140 characters or less!

With his permission, here is one student's response:
"The difference between bad & good leadership is respect & results."
-Eric, First-year Student in Bad Leadership

What would your answer be in 140 characters or less?




p.s. Follow me on Twitter (jstratton22) to see more answers to this pop quiz question!

assumed consensus

I believe that the “curious atmosphere of assumed consensus” was the main cause of the Bay of Pigs. Schlesinger and other dissenters were impacted by the uncritical environment of their White House meetings. While Schlesinger had many issues with the supposed consensus opinion, he remained largely silent during the meetings. Had he or other dissenters spoken up and defended their critical viewpoints, perhaps the incident may have been avoided entirely.

One attribute of the group that intrigued me was their blindness to the obvious reality of the circumstances. The group’s underestimation of Castro’s military power is an apparent example. Castro’s army consisted of approximately 200,000 troops. Kennedy’s administration believed that their team of 1,400 exiles could succeed against Castro’s much larger military, despite being out numbered 140 to 1. The degree to which the group misjudged the situation is shocking.

Clearly, the Kennedy administration was a bit optimistic of their side’s power (it seemed like they were a bit delusional). However, I do not believe Kennedy’s advisers deserve all the blame. They were interacting within an environment that used social pressures to discourage any serious suggestion that challenged the assumed consensus. In his role of President, Kennedy himself heavily influenced and shaped this uncritical setting. His demeanor towards his advisers impacted their willingness to challenge his opinions. Additionally, when choosing his cabinet, Kennedy often valued the advisers’ loyalty more than their expertise. Both of these factors influenced the unfortunate outcome of the Bay of Pigs. In the end, it seems that both the advisers and Kennedy were blameworthy.

1. What ways could the advisers maneuvered the uncritical environment and be taken seriously?
2. How can incidents of groupthink be reduced in a group that you are involved in?

Becca, hindsight certainly is 20-20. It’s considerably easier to label leaders’ actions as unethical or label the leaders themselves that way from the vantage point of the present, but as Terry L. Price explains the content of morality isn’t clear, especially when decisions are actually being made. As students of history we have the advantage of knowing the outcomes of people’s actions those outcomes generally color our view of the events that caused them. Price explains that we also unnecessarily assume that leaders share the same understanding of morality that their followers do. The assumption is ridiculous considering that philosophers argue about the content of morality till this very day. Leaders and followers can also disagree on the scope of an immoral act. Naturally, times arise when deviating from morality has positive consequences we hope will outweigh the immoral means used to achieve them. Leaders, due to their position, have greater access to resources. They commit the same small infractions that we do, for example David lusting after another man’s wife, but on a greater scale, for example David sending the woman’s husband to die in battle. It is easier how leaders can confuse the scope of their morality or lack thereof from the cognitive perspective.

1) Does the cognitive explanation of ethical failures apply to JFK and the Bay of Pigs?
2)How can we/ do we have to educate leaders about ethics?

A Rose-Tinted View on Things

Largely noted as an utter disaster and failure of John F. Kennedy’s tenure as president, the Bay of Pigs invasion stands today as a historical event that displays classic examples of poor leadership and even poorer followership according to Janis’s “Groupthink” article. Janis outlines six characteristics of the group’s flawed judgments during the planning process for this important attack on Cuba, many of which also reflected on the nature of Kennedy’s bad leadership. For example, the “illusion of invulnerability” stood out to me as a matter of very positive group dynamics gone wrong. As a select group of specialized members chosen by such an illuminating and optimistic figure as Kennedy, these collaborators had no choice but to feel a sense of good will and cohesiveness. However, this case demands even more of a steady manner of planning and levelheadedness. It is too easy in scenarios such as these to develop what Janis mentions as “unlimited confidence” (327). One cannot simply cast aside notions of possible complications such as the enemy getting the better of one’s strategy or unforeseen issues that arise in the future.

However, I find it most interesting that such a failed invasion did not hurt the Kennedy administration in the historical eye. Looking at the Kennedy years from a retrospective point of view, today’s society tends to view these years through the proverbial rose-tinted glass, considering first and foremost JFK’s buoyant mannerisms, his administrations positive contributions such as the Peace Corps, and finally his lamented death. True, the Bay of Pigs remains in the history books as a failure but not of Kennedy’s; rather, it is seen as more of a failure on the part of the American government than of an individual. This phenomenon can be noted once again on the other side of the spectrum: in terms of positive innovations, Kennedy becomes responsible for the work.

Questions:

Could it be that Janis also falls under the spell of the rose-tinted glass when considering the Bay of Pigs invasion and the planning that went into it?

When is groupthink a good thing?

Loyalty and the Light Brigade

“'Forward, the Light Brigade!'
Was there a man dismay'd ? Not tho' the soldier knew Some one had blunder'd: Theirs not to make reply, Theirs not to reason why, Theirs but to do & die, Into the valley of Death Rode the six hundred.”
Alfred, Lord Tennyson

Appropriate and effective followership depends on thoughtful critical analysis of the actions and decisions of people in leadership roles. In Irving L. Janis’ “Groupthink”, he describes how the Kennedy staff succumbed to “shared illusions and related norms” that crippled their ability as followers to effectively analyze the events that lead up to the Bay of Pigs invasion of Cuba. Each man secure in the belief that the plan was supported by each of the others, they fell into a self-reinforcing pattern of factual denial. When Schlesinger opposed the plan to invade, he was asked to stop because “the president has made his mind up… now is the time for everyone to help him all they can.”
Without a safety net to censor out the ridiculous, silly, and irrelevant thoughts that we all are subject to, even the best leader will make mistakes. One is reminded of Tennyson’s poem, “The Charge of The Light Brigade”. Initially written as a propaganda piece meant to honor the loyalty of the British soldiers in Crimea, it now reads as a damning indictment of those who blindly follow their orders.
As a culture, we are slowly beginning to recognize the value of skepticism in followers. Although in “The Power of Followership” Kelley warns against blind disapproval on the grounds that it weakens the impact of legitimate disagreement, modern society is also dismissive of those who blindly follow. How many times have we heard the words “I don’t want any ‘Yes-men’”? Although individual leaders may wax tyrannical from time to time, a growing culture of responsible skepticism has the potential to force leaders to listen to those they lead.
In the end, the responsibility for a group’s actions has to fall on those in the group who support them or, through inaction, allow them to be supported. The blind loyalty of the Kennedy cabinet led to their plan’s failure, and the unquestioning nature of Tennyson’s soldiers led to their death. In their roles as responsible agents with some measure of power, we cannot help but assign some of the blame for their failure to their unthinking loyalty.



Questions
1. Is it the responsibility of a leader to represent his constituents’ views rather than his own, or is the responsibility of the followers to choose a leader who shares their beliefs?
2. To what extent are group consensus and loyalty assets?

Groupthink: Leadership or Followership?

Groupthink is an idea that can be very easy to fall victim to, but can also be extremely difficult to detect. As demonstrated in Irving Janis’ chapter, “Groupthink,” this can occur in even the brightest minds. This brings up the question, whose fault is it when groupthink appears? Did John F. Kennedy’s actions lead to the failed Bay of Pigs Invasion, or was it his cabinet’s fault for not stopping him? Arguments can be made for the cases of both followers and leaders.
First of all, Kennedy, as a good leader, should have had the ability to realize that nobody was giving a serious rebuttal to the plan of attack. As a leader, one should be open to opposing ideas, and even should encourage people to try and find counter-points. However, as Janis explained, when people came to voice their opposition at cabinet meetings, such as Senator J. William Fulbright, Kennedy gave no opportunity to discuss the new opinion. This seemed to work against those whose opinions differed, and deterred most people from choosing to voice dissent.
However, the others in the cabinet also seemed to be responsible for the groupthink. Janis introduced the idea of “mindguards.” People were so focused on the success of the plan and the reputation of the president, that they pressured others to remain silent. The mood surrounding the Bay of Pigs invasion was so optimistic and positive, people were scared to change that. And this is where the discussion of being a good follower comes into play. Followers cannot be scared to disagree with leaders. They must push their ideas if they believe them to be valuable.