Write 2 page essay on the topic Theory of Management: Abusing Power.
Theory of Management: Abusing Power
In any organization, there will be individuals who have more power than others and with that power they will have opportunities to abuse their position. However, it must be noted that the results of abusing any power can be drastic for all concerned shareholders and there are many examples of how the abuse of power led to the complete downfall of a company. Luckily, while there are means of abusing power, there are also means of dealing with the abuse and individuals who are ethical may have to become ‘traitors’ to their company once they see such abuse happening.
The worst form of the abuse of power is when several powerful individual collude to cheat other stakeholders in the company for their own gain. Corporate crime gives individuals working in companies many opportunities for deception, corruption, misappropriation, and technology related crimes which are readily present for people in these positions. Since a corporate body does not perform any actions on its own, the owners, board of directors or an employee of the corporation holds the responsibility of the crime (Welch, 2005).
In recent years, the accounting scandals and the corporate mismanagement which has led to losses in billions of dollars for investors and traders have prompted the government to further regulate and protect the private investor. In 2002 the American Congress created the Sarbanes-Oxley Act to have greater accountability for corporate boards and a Public Company Accounting Oversight Board was created to prevent companies going the way of Enron or Arthur Anderson. While the act has its supporters and objectors, the final effects of this act remain to be seen by the public (Risk Glossary, 2006).
When a company like Enron defrauds its investors and shareholders it becomes an important social issue since many thousands of individuals had invested in the stocks of this company. Had there been one or two individuals it probably would not have even made an acceptable story for the media. There were many people who were seeking answers as to what happened to their money and what happened to their retirement fund and no one had any clear answers to their questions (Neylan, 2005).  .
As a worker in the company where power was being abused my reaction would be equal to the level of abuse which was taking place. A coworker who often takes office stationery and forgets to replenish it might have to be given a short talk about the situation and if the problem persists it could be brought to the notice of higher members of the company. A male boss who seems to be too friendly with the female staff might need to be reported to the Human Resources Dept. if the ladies in the office feel uncomfortable with the attention he gives.
Similarly, A corporate executive who deals in insider trading just before the company announces a huge loss might need to be brought before the law in which case an employee might have to act as a whistle blower. In all cases, the punishment for the offence often is less than the one which should be meted out but as society develops further and more individuals understand the responsibility of corporations, the idea of someone abusing their given power and trust should become a thing of the past.
Risk Glossary. “United States Financial Regulation” Risk Glossary. 2006. RiskGlossary.com. 18 Apr. 2006.
Neylan, J, 2005, ‘Quantifying Social Entities: An Historical-Sociological Critique’, Journal of Sociology & Social Welfare, vol. 32, no. 4, pp. 23-40.
Welch, J. 2005, Winning, Harper-Collins.