7 Questions
What was Andrew Fastow's role in Enron?
CFO
What was the main belief that Andrew Fastow designed Enron's management system around?
Employees pursued only their own self-interest
What was the reason for Andrew Fastow's recent guilty plea?
He wanted to protect his family
What do most managers assume about people's preferences at work?
People only care about their own self-interest
What can senior managers do to create a more cooperative workplace?
Evaluate HR processes that support helping others
What is the goal of the Advanced Institute of Management Research?
To develop theories that recognize innate preferences for helping others
What is the difference between hardwiring non-selfishness into the organization and sacrificing oneself?
Hardwiring non-selfishness is not the same as becoming a saint or sacrificing oneself
Study Notes
Enron's CFO and the importance of recognizing innate preferences for helping others in management
- Andrew Fastow, the former CFO of Enron, designed Enron's management system around the belief that employees pursued only their own self-interest.
- Enron adopted a system of individual incentives where employees were rewarded based solely on the success of their own venture.
- Fastow recently pleaded guilty to charges related to Enron's collapse, forfeiting $29 million and agreeing to co-operate with prosecutors.
- Fastow's about-turn was likely caused by the potential indictment of his wife, Lea Fastow, and his desire to protect their children by ensuring they had at least one parent at home.
- Fastow sacrificed his self-interest to protect his family, despite designing Enron's management system around the belief that employees only cared about their own self-interest.
- Most managers assume that people only care about their own self-interest at work, despite knowing that people have an innate preference for helping others in their personal lives.
- People like to help others not just as a means to further their own self-interest but also as an end in itself.
- Senior managers can design an organization in which people derive as much joy from the success of others as from their own success by recognizing the innate preference for helping others and designing management processes accordingly.
- HR processes should be evaluated to determine which ones reinforce self-interest-seeking behaviors and which ones support helping others.
- Specific incentive systems and decision-making processes can be adopted to support more cooperative behaviors.
- Hardwiring non-selfishness into the organization is not the same as becoming a saint or sacrificing oneself.
- The Advanced Institute of Management Research aims to develop rigorously researched theories that recognize innate preferences for helping others and help build high-performance organizations that are also delightful to work in.
Test your knowledge about the Enron scandal and the importance of recognizing innate preferences for helping others in management with this quiz. Learn about Andrew Fastow, the former CFO of Enron, and how he designed Enron's management system around the belief that employees only pursued their own self-interest. Take this quiz to understand how senior managers can design an organization that supports cooperative behaviors and recognize the innate preference for helping others. Explore how HR processes and incentive systems can be evaluated to support non-selfishness in
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