hrm340 Sec2 Groupc
hrm340 Sec2 Groupc
hrm340 Sec2 Groupc
GROUP C
HEADLIN
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HER
HRM 340; Employee Training & Development
Section: 2
Group Report on
Training and Development intervention for Enron Corporation
SUBMITTED TO:
Faseeha Zabir (FsZ),
Lecturer, Department of Management, School of Business and
Economics
NORTH SOUTH University
SUBMITTED BY:
GROUP C
Serial no. Names ID
1 Yasir Arafat 1812466630
2 Samiha Tahsin Promi 1821514030
3 Rubiyeat Irfan Sabab 1912056630
4 Md. Barkatullah Bijoy® 1912481630
5 Raihan Noor Khan 1912930630
6 Saba Islam Momo 1913022630
Letter Of Transmittal
August 27, 2021
Faseeha Zabir
Lecturer
Department of Management
Dear Madam,
With due respect, we are submitting the report regarding the Training and Development of
Enron. This project has been designed in accordance with your instructions. We give our best
to make it a success. This project has helped us put our classroom learning into practice and
gain a deeper understanding of real-world situations.
Finally, we want to thank you for your support, encouragement, and thoughtful thinking. Once
again, we thank you for giving us the opportunity to work on such an important project. We
respectfully request that you accept our report, and we hope that it meets your expectations.
Sincerely Yours,
Group C, HRM340.5
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Training and Development intervention for Enron Corporation
Executive Summary
For any organization to develop an efficient human resource, training is an excellent strategic
tool. We, “Triton HR,” is an HR consultant group. In this report, we have provided a whole
training solution for the world’s one-time top shark energy-based corporation Enron. This
USA-based company, once known for its game for revolutionizing the energy market, had more
than 100-billion-dollar worth of revenue, bagging over 90$ share price. However, out of the
blue, the company got bankrupted in 2001, reporting crash drop in share price from 90$ to
0.12$. The whole business world got stunned, and an investigation revealed that how this
multibillion company was nothing but scamming their financial report this whole time by using
rare fraudulent accounting techniques to cover up their actual losses and debts where the top
executives played direct voluntary roles. It was a totally unethical act in every context for
which, as a result, this major financial crisis took place. As an HR consultancy group, we are
suggesting to create an “Ethical Training” program for Enron’s top executive body where our
main focus is to bring their attitude change by highlighting the importance of ethical values,
principles, and morals in workplace decision making. Our training program follows every step
of the “ADDIE MODEL”- TNA (analysis), Design, Development, Implementation, and
Evaluation. We have also incorporated “Findings & Analysis” to point out the possible barriers
of this training program and how to overcome them. Our TNA pinpoints the need for this
“Ethical training” in Enron. Our Design & Development is the blueprint of our whole training
program suggesting methods, approaches, learning objectives, cost, etc., whereas our
Implementation phase is the phase where we have tried to bring the whole blueprint of this
training to life. By Evaluation, we have tried to measure how effective the training is proven.
Our end goal is to make use of this “Ethical Training” as a strategic tool in such a way that it
makes the top execute bodies of Enron strongly ethical so that they will never use fraudulent
tactics again in the future, which will save this company from getting financially devastated
again and their ethical attitude may change its already damaged impression in the business
world.
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Training and Development intervention for Enron Corporation
Table of Contents
1) Letter Of Transmittal .......................................................................................................... 1
2) Executive Summary............................................................................................................. 2
3) Introduction ......................................................................................................................... 4
4) Methodology ......................................................................................................................... 4
5) Enron Corporation .............................................................................................................. 4
6) Training Need Analysis ....................................................................................................... 5
Triggering Event: ................................................................................................................................. 5
Input Phase: ........................................................................................................................................ 5
Process Phase:..................................................................................................................................... 6
Output Phase: ..................................................................................................................................... 6
7) The Training Strategy ......................................................................................................... 7
The training purpose, aim, and objective: .......................................................................................... 7
Participants of training:....................................................................................................................... 7
Inputs: ................................................................................................................................................. 7
Learning Objectives:............................................................................................................................ 8
Components of Learning Objectives ................................................................................................... 8
Output: ................................................................................................................................................ 8
Methods Of Training: .......................................................................................................................... 9
Training Sessions & Durations: ......................................................................................................... 10
Location of training: .......................................................................................................................... 10
Costs: ................................................................................................................................................. 10
8) The Training Intervention ................................................................................................ 10
Ice Breaking:...................................................................................................................................... 10
The Training Facilities: ...................................................................................................................... 10
Training Materials: ............................................................................................................................ 11
Dry Run: ............................................................................................................................................ 11
Actual Training: ................................................................................................................................. 11
Transfer of Training:.......................................................................................................................... 11
9) Training Evaluation .......................................................................................................... 12
10) Findings and Analysis ..................................................................................................... 13
11) Recommendation ............................................................................................................. 14
12) Conclusion ........................................................................................................................ 15
13) Reference .......................................................................................................................... 16
14) Appendix........................................................................................................................... 18
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Training and Development intervention for Enron Corporation
Introduction
We are an HR consultant group named “Triton HR,” who are preparing a report for Enron
Corporation. Enron is an energy firm whose top management used different accounting flaws,
misleading reporting, and other unethical practices to show fake revenue and hide billions of
dollars of debt. As a consequence, they had to file for bankruptcy. The report is about a training
intervention, and this training intervention has been deliberately planned to help them solve
their ethical problems. TNA, design, development, implementation, and evaluation are all
included in this study. The following sections are crucial to the report's success.
Methodology
For our data gathering on Enron Corporation, we used the qualitative method. We gathered our
information from secondary sources on the internet. Secondary data were acquired from many
reliable websites, newspapers, reports, journals, and articles published on the internet.
Enron Corporation
Enron Corporation is an energy, commodities, and services company based in the USA. It was
founded in 1985 by Kenneth Lay. Enron was formed by a merger between Lay's Houston
Natural Gas and InterNorth. (History.com Editors, 2009) It was one of the largest companies
during its time. According to Wikipedia (2009), Enron had over 29,000 employees working for
them. They claimed to generate revenues of more than 100 billion dollars in the year 2000.
Fortune, a business magazine named Enron "America's Most Innovative Company" for six
consecutive years.
Due to such financial success, Enron’s share price went up and was worth over 90$. However,
suddenly in the year 2001, they declared Bankruptcy. It created a shock among the business
community, and a lot of people were in disbelief, and the share price dropped to just 0.12$.
(BEGIN TO INVEST, 2017) It resulted in massive losses for a lot of investors, and Enron’s
employees also had to lose their jobs. After investigation, it was found that Enron's leadership
was fooling the regulators by using rarely used and flawed accounting practices. They used
special purpose entities (SPEs) or special purpose vehicles (SPVs) to hide their debt and toxic
assets from investors and creditors (Segal, 2021). Thus, we can see Enron’s top Executives had
a lack of morality, due to which they took such fraudulent steps and completely destroyed one
of the top companies in the world.
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Training and Development intervention for Enron Corporation
1. Triggering Event: In the year 2000, the per-share price of Enron was over 90$ (Cabral,
2020). Since Enron was showing a lot of revenue thus, it was expected that the share price of
the company would keep on increasing or at least stay steady. But they suddenly declared
bankruptcy, and the share price dropped to 0.12$ (Begin to Invest, 2017).
• Expected share price≥ 90$
• Actual share price= 0.12$
Thus, here we can see that the Actual Organizational Performance < Expected Organizational
Performance.
2. Input Phase:
i) Organizational Analysis:
Enron wanted to become the leading Energy corporation in the world. Besides, they
wanted to expand their business into different other fields too. They wanted to diversify
their business. Due to this, they were involved in business deals and contracts with
different nations and companies (Bondarenko, 2018). It created a lot of financial
transactions, and their accounting department used different accounting systems to
show increased profit and reduced debt in their public reports, which helped Enron to
artificially increase their share price and create goodwill about them. (Thomas, 2002)
Internal Environment Policy: Enron commits to laws and ethical values. Any
employee who breaches those laws and ethical values faces disciplinary actions. But
we can see them breaching ethical values by using different fraudulent
activities. (“ENRON Corporate Responsiblity,” n.d.)
ii) Operational Analysis: Enron's top management is expected to ask their employees
to create financial reports properly. They need to use proper accounting methods to
prepare annual reports. Their top management needs to be ethical in providing data for
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the reports. They should know how to differentiate between right and wrong (Introna,
2019). Enron's employees are expected to properly analyze financial documents and
find mistakes or frauds in the financial statements. They are also expected to be ethical.
iii) Person Analysis: Enron’s employees should know how to make and analyze
financial reports. Executives should possess the knowledge of taking decisions in
decisive moments or any critical situations which are directly linked with the well-being
of the organization. They should have an ethical attitude towards their duties and
responsibilities.
But, the current situation of the employees is not matched with the above
responsibilities. The executives’ bodies are directly making unethical decisions for their
own interest, and it pushed the company in danger. For the unethical behaviors of the
top management, the other employees also neglected their actual duties and
responsibilities and were involved in corrupt activities.
3.Process Phase: Enron’s employees and executives were expected to be transparent and
provide genuine financial reports of the organization. But in reality, they were unethical and
provided fraudulent financial reports. Thus, there is a current performance gap due to a lack of
proper attitude.
4. Output Phase: Here, we have an Attitude Related Problem, which can be solved using
Ethical training. Enron will be using the Reactive Approach to provide ethical training to their
employees since we are taking training measures after the problem has occurred.
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Training and Development intervention for Enron Corporation
By training that is ethical in nature, our aim is to bring ethical behavioral change in the
company’s work, mainly at the top level.
Participants of training:
We are going to arrange training for top-level management of Enron where our top priority will
be to insist on ethical workplace value to them so that such fraudulent practices may never be
repeated.
Inputs:
1. Training Needs: Enron’s top-level management needs to have “Ethical Training”.
2. Learning Theory: In Enron’s situation, we will apply “Reinforcement Theory
(Negative)”. By using this learning theory, we can strengthen ethical behavior in
employees as to when they will act ethically the negative outcome of their company
being financially devastated can be avoided entirely.
3. Organizational Constraints: Enron was one of the leading companies in the world at
its time (Chen, 2019, para. 1). So, they have sufficient resources to organize a decent,
ethical training program that we have proposed.
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Training and Development intervention for Enron Corporation
Learning Objectives:
Trainees should feel that the training and its
environment is the perfect platform where they can be
Trainee Reaction Objective engaged to learn workplace ethics, morals, and values.
Employees will be given a survey to fill out to let us
know their subjective perception of the training.
After the training, the top management are expected to
Learning Objectives take work actions ethically, especially not using any
fraudulent method to create false accounting reports and
by honesty achieve a minimum 50% of its loss recovery.
Output:
1. The Trainee:
➢ Individual differences in KSA’s: As we are giving ethical training, we will use
the same training content for everyone, but the trainees might have different
KSAs, so different training styles can be used if there are any significant
differences in the KSA’s of the trainees.
➢ We will do a pre-survey to know according to maximum trainees what has to
be kept in mind to make the training environment comfortable.
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Training and Development intervention for Enron Corporation
➢ We have to keep our focus on differences in learning styles of trainees like
visual or verbal learner, active & reflective learner, etc., and provide sessions
accordingly.
2. Physical Environment:
➢ Ideal room temp, comfortable wall color, distraction-free view, etc., key
features have to be kept in mind in our design.
➢ We expect a positive transfer of training through an effective training design.
➢ We will follow “Spaced practice” and “Part Learning” so that with broken
down, regular practice training can be more effective.
➢ We will also provide feedback to the trainees to keep them updated about their
progress.
Training Approaches:
We will use both Cognitive and Behavioral Approaches to change the unethical attitude
of Enron’s employees.
Methods Of Training:
We are proposing two methods of training. The “Lecture” method will be used for
Cognitive Approach, and “Case Study” method will be used for the Behavioral
Approach.
• Lecture: By lecture, we will try to make our trainees understand the importance
of ethics in the workplace, which can influence their attitude.
The lecture will be discussion based so that the communication can be two-way
and enough interaction happens. Our type of questions will be “Open-ended”
and “Overhead” types. However, trainees can get bored from long lectures, so
we have to make lecture sessions as lively as possible.
• Case Studies: Here, we will give written or videotaped situations related to
ethics. Trainees have to find solutions how to ethically respond to those
situations. The case studies will be long and highly integrated with organization
wide information.
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Training and Development intervention for Enron Corporation
Training Sessions & Durations:
➢ Training Session’s time duration will be one hour per day. One session per week in the
workday (Monday) will be held. Office hours will be reduced to manage extra pressure.
A total of five sessions will take place.
Location of training:
➢ On-site training will be arranged. This will be convenient for all employees and also
will be cost and time saving. (Robertshaw, 2019)
Costs:
➢ Development cost: Costs related to the development of the training program. Such as
the cost of the design of training.
➢ Direct cost: Cost directly incurred in giving the training such as trainers fee,
refreshments, etc.
➢ Indirect cost: Costs such as administrative and clerical support are the indirect costs
of the training.
➢ Participant Compensation: Since all our participants are from the top managerial
level, We will pay our trainees to compensate for their time.
➢ Evaluation cost: All the evaluation costs, such as MCQ tests, are accounted for here.
• Ice Breaking: Since our training would be focused on the ethical development of the
employees, some jokes on ethics can be used as an ice breaker. One might find this ice
breaking method to be both funny and ironic at the same time, which will instigate
attention from the employees. Since it is a relatable topic of the training, the transition
from the ice breaking to the actual training should be very smooth and flexible.
• The Training Facilities: One of the key elements of providing proper training is the
medium in which the training is given. The training room should be void of any kind
of distractions, auditory or visual. The lighting should be adjustable with a temperature
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between 22-25 degrees Celsius. The furniture should be user friendly and comfortable
and should orient with a semi-circle style. The semi-circle chair alignment would prove
to be the most effective style since this training is only for the higher ups thus not
needing too much space in seating. The focus would come from one angle, and it is
easier to consume the high focus of attention from the trainer.
• Dry Run: Since we are providing training on a very limited body and the total training
method is more or less based on ethics and morality, it is safe to assume that we won’t
be needing a dry run session. Our strong TNA model and training design backs up this
claim. We can begin directly with actual testing.
• Transfer of Training: The goal of this training will be to stimulate far transfer in the
attendees since the far transfer is relatable with the ethical issue that they developed in
their previous doings. Since it involves using learned capabilities to novel situations
involving original thinking, the attendees will be more involved with variable
interactions and unpredictable responses. If a positive transfer occurs, then the transfer
of training is successful.
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Training Evaluation
In order to determine whether a company's training program is effective, it is necessary to
conduct a training program. A primary job of the training and development department in any
organization is to evaluate the training program. Formative and summative evaluations are the
two types of evaluations provided. Both are required for gathering training program outcomes.
A formative evaluation will be necessary at the beginning. It will determine if the training
program is ready to be implemented. This strategy will assist in determining whether any
training program changes are required. Surveys will be utilized to determine whether or not the
learners are happy with the training program.
Later, the summative evaluation will be utilized to assess the training program's overall success.
Summative evaluation will involve a variety of outcomes, including response, affective
outcomes, skill-based, cognitive.
Reaction outcome:
It's crucial to know that how trainees feel about the training program after it's completed.
Surveys will be utilized to determine reaction outcomes because this survey is actually less
time consuming, and the trainers can easily observe the trainees.
Cognitive outcome:
It is very important to know how much a trainee learns in the training program. The cognitive
outcome is used to determine the degree to which trainees are familiar with the principles, facts,
techniques, procedures, and processes emphasized in the training program. Thus, this will let
the trainer know how much the trainee has learned during the training program. To find out the
knowledge acquisition level of the trainee, his/her metacognitive skill should be tested through
a simple case study to see their ability to judge. Besides, running a simple MCQ test would
measure their knowledge acquisition.
Affective outcome:
Affective objectives help to observe the awareness and growth in attitude, motivation,
emotion, and feelings of the trainee. This will measure employees’ attitude change,
psychomotor skills, and value. This method is usually conducted through surveys and
interviews based on the situation. Also, “This is also a great time to run scenarios and
simulations to observe the students as they interact with simulated patients. Determine the
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strengths and weaknesses of procedures. This determines job behavioral outcome.”
(Spencer,2016)
• Abuse of Power: The attendees of the training are all members of the upper echelon
of a high-end company. They are either too proud or too spoiled morally to accept
social ethics as part of their routine. This is due to the position of power they have over
the company.
• Lack of Empathy: Another reason for the training not working out as intended would
be the candidates’ lack of understanding harming others with their unethical
wrongdoings. If they cannot relate to the injustice of harming others, they will not
change the way they act.
• Force of Habit: As humans are habitual creatures, doing bad deeds can turn into a
habit as well. This can be the case for the attendees who took the training program.
Thus it might not work on them.
• Lack of Check and Balance: If there was an internal check and balance system for
the upper-level management for Enron, the training wouldn’t have failed. It is easy to
fake the results of training, but if there is no supervision afterward, it is very likely that
the group that was unethical will go back to their ways very soon.
• Resistance to Training Evaluation: Evaluation is a threat to upper-level managers or
directors of Enron. Because while evaluating the employees, the corrupt transition and
unethical supervision of the managers will be revealed. They will be afraid to get
caught for the fraudulent piercing of the veil of the corporation.
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Training and Development intervention for Enron Corporation
Recommendation
After our research, we have come up with few recommendations that Enron can take to tackle
the above mentioned obstacles. Enron should do the following things to make sure that the
training does not fail.
• Accountability of power: The upper management members should be accountable for
their actions. The board of directors should take legal action against their top-level
management of the company if they are found guilty of abuse of power. Thus, the abuse
of power will be reduced.
• Think from a different perspective: Trainers should relate the negative consequence
of one's doings to others. The trainees should be able to think from a different
perspective which can stop them from doing unethical actions.
• Punishment: Punishment can be used as an option to stop repeating unethical actions.
The fear of punishment can stop the managers from taking any unethical actions. They
will know that if they get caught doing any unethical activities, then they will have to
face negative consequences.
• Proper supervision: Supervision after the training is to be ensured to stop the top
management from repeating the unethical behavior. The board of directors should keep
a strict eye on the activities of the top managerial body. They should identify if anyone
is repeating the same mistake again.
• Ensure everyone that training is for the betterment of them: Make all the trainees
understand that this training is for the betterment of them and the organization. If the
top management understands that it is not going to harm their jobs, rather it will be
beneficial for them. Then the top management will take part in the training
spontaneously.
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Conclusion
Having a good executive board is the key machine of any organization’s success. But if they
perform their duties and responsibilities against the company’s environmental (external &
internal) policy, it will be harmful to the company because such decisions can lead a business
towards destruction. As we know, Enron was one of the largest natural resources providers in
the USA as well as in the whole world. But the unethical actions of the executive led to the
collapse of the whole company. This was happening because of ethical degradation. As the
consulting firm, we, “TRITON HR,” give our maximum effort to correct their actions by
providing ethical training and development intervention for them. We can assure that if the
company follows our advice and provides their executives with the “Ethical Training,” the
company won’t face such kind of unexpected behavior and attitudes from their executives as
well as unexpected situations like bankruptcy or collapse of the company. Moreover, this
(ethical) training and development intervention can help the company recover its previous
positive impression among the consumers and shareholders and bring an effective outcome in
its business operation.
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Reference
1) BEGIN TO INVEST. (2017, December 14). A Brief History of Enron - With Enron Stock
Chart - Begin To Invest. Retrieved August 12, 2021, from Begin to Invest website:
https://www.begintoinvest.com/enron-stock-chart/
https://www.britannica.com/event/Enron-scandal
3) Cabral, C. (2020, August 12). The Complete Enron Stock Price History Guide. Retrieved
https://www.shortform.com/blog/enron-stock-price-history
4) Chen, J. (2019). Enron. Retrieved August 14, 2021, from Investopedia website:
https://www.investopedia.com/terms/e/enron.asp
website: https://www.csus.edu/indiv/m/merlinos/enron.html
6) History.com Editors. (2009, November 24). Enron files for bankruptcy. Retrieved August
history/enron-files-for-bankruptcy
International Masters Program for Managers. Retrieved August 13, 2021, from
the-managers-responsibility
8) MULLIGAN, T. S. (2006, May 26). Enron’s Top Executives Are Convicted of Fraud.
https://www.latimes.com/archives/la-xpm-2006-may-26-fi-enron26-story.html
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9) Robertshaw, K. (2019, April 17). The 5 Major Benefits of Onsite Training. Retrieved
training.co.uk/benefits-of-onsite-training/
10) Segal, T. (2021, January 19). Enron Scandal: The Fall of a Wall Street Darling. Retrieved
https://www.investopedia.com/updates/enron-scandal-summary/
11) Spencer, J. (2016, November). Evaluation of the Elusive Affective Domain – Platinum
Educational Group. Retrieved August 20, 2021, from Platinum Educational Group
website: https://www.platinumed.com/evaluation-elusive-affective-domain/
12) Thomas, C. W. (2002, April 1). The rise and fall of enron. Retrieved August 13, 2021,
https://www.journalofaccountancy.com/issues/2002/apr/theriseandfallofenron.html
13) Wikipedia Contributors. (2019, October 2). Enron. Retrieved August 12, 2021, from
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Appendix
Contribution Table
Name Topic
1) Yasir Arafat The Training Intervention
ID:1812466630 Findings and Analysis
2) Samiha Tahsin Promi The Training Strategy
ID:1821514030 Executive summary
3) Rubiyeat Irfan Sabab Introduction to organization
ID:1912056630 Training Need Analysis
Conclusion
4) Md. Barkatullah Bijoy® Introduction to organization
ID 1912481630 Training Need Analysis
Recommendation
Compilation
5) Raihan Noor Khan Letter of transmittal
ID:1912930630 Training evaluation
Introduction
6) Saba Islam Momo Training evaluation
ID:1913022630 Methodology
Findings and Analysis
THE END
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