Exercise 4


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Since the second half of the 20th century, human resource management has risen to become one of the most important areas of focus in organizational management. A growing number of studies have emphasized the importance of appropriate human resource management practices that ensure that employees are well motivated to enhance organizational performance. In deed, there is not doubt that organizations that have well motivated and highly trained employees have a competitive edge that many competing organizations may fail to replicate.  However, effective human resource management is embroiled in management practices and corporate governance of the organization. Management is one of the most important practices in business entities since it plays vital functions of planning, organizing, directing, and controlling the organization. This means that organization becomes what the management wants. However, management cannot accomplish all these functions without the support of employees in the organization. In the recent past, business ethics especially in human resource management has become an important factor influencing the overall performance of a given organization. As caretaker of the organization, management has obligation towards all stakeholders including employees, shareholders, customers, communities, and the environment. Balancing between the interests of all stakeholders is a tricky affair and most organizations tend to serve the interest of shareholders alone.  The case of Enron is one of the cases that can illustrate failure by management to serve the interest of all stakeholders and instead focus on short term profitability that enriched few individuals. Enron remains one of the biggest corporate scandals in United States history. This paper will use the case of Enron to look into how management sometimes fails to adhere to business ethics especially on issues of human resource management.