Stadium Dilemma

The professional sports team in my county believes that the current stadium they use, which happens to be about two decades old, is in urgent need of renovation and upgrades so that they can keep up with the other teams. As such, the team has determined that they require approximately two hundred million dollars from the county for the renovations, or they will leave the county. Initially, the county had paid for the stadium construction through a sales tax initiative, which my residents did not favor. Notably, their opinion and arguments are both valid and strong, which begs whether the team should stay in the stadium or leave. As the chief of staff for the chairperson of the board of supervisors for the stadium district of this county, it is my responsibility, with the help of my staff, to help the chairperson determine the best way forward regarding this matter.

Types of Power

According to Johnson (2019), Power is the basis of influence attempts. As such, in my position as chief of staff, I have various types of Power that I can use to solve his dilemma and come up with the best solution that the chairperson can agree to. As an individual, I believe that I have two types of personal Power: expert and referent. I think I can use these two powers regarding the chairman, staff, and other parties interested in the matter. Power comes from different sources; however, a typology divides Power into two categories: hard and soft. Accordingly, soft Power is based on attracting others instead of inducing or forcing them to go along with what one wants (Johnson, 2019). Soft Power is created by gaining admiration and inspiration and building healthy relationships with those below your rank. On the other hand, hard Power is the use of force or threats, for example, firing people or inducing them through promises of benefits like bonuses and promotions, among other things (Johnson, 2019). Notably, reward power is very similar to hard Power, and therefore, I must pay close attention to these powers and how I use them so I do not act in unethical ways.

As chief of staff and ranking below the chairperson, I can use my soft Power, particularly expert Power, to showcase my team’s research and recommend the best way to solve the dilemma. Besides, having served as chief of staff for quite some time, I believe I have sufficient expertise and experience in matters concerning the stadium. One influential tactic I would use is rational persuasion, which, as mentioned above, involves presenting factual evidence, logical arguments, and other valid data to help solve the problem (Tsai, 2014). Secondly, I would employ the influential tactic of apprising (Johnson, 2019), explaining to the chairperson the best solution to the dilemma that brings a win-win solution for everyone involved.

Regarding my staff, I would use expert and referent power. According to Johnson (2019), Americans do not respond well to Power gained through ranks; they react to power experts and referent power. As such, I have managed to create a healthy working environment for my staff, and I believe this will go a long way regarding my referent power when it comes to them. Using this Power, I can use influential tactics, including inspirational appeals (Uhl-Bien et al., 2014), whereby I will generate their passion by appealing to their ideals and values. Most of the staff are passionate about the stadium, especially the different projects involved; as such, they also know the best solution to the dilemma. I would encourage them to come forward with their ideas using referent power. Further, I would also use smart Power, a combination of soft and hard Power (Nye, 2013). Accordingly, I would make it known to my staff that if we did not find a solution to the dilemma and create a win-win situation, the team would leave, meaning that there would be no need for many people to oversee the stadium, the revenues collected from the stadium would significantly reduce, and as a result, some of them would end up losing their jobs.

Moreover, I would also use my positional Power, which includes reward power, legitimate Power, and coercive Power (Brink & Steffen 2008). These types of Power would not impact the chairperson much, seeing as I rank below him. However, I can apply this Power to my staff and other entities interested in the stadium. For example, use legitimate Power to allocate various duties to the staff, duties that I feel will all lead to us coming up with the best solution. Legitimate Power is useful, especially when there is resistance; for example, assigning staff to a role they were not doing before may provoke resistance from the staff because they are scared of change or could be any other reason, but as long as the role assigning process is ethical, then I have the authority to make the change. Secondly, I would also use reward power on the staff to get them to work harder to solve the problem. Getting the stadium renovated seems like it would be more beneficial than losing the team, but it also means more activities and events would be held there since it would attract more people. Through these gains, more positions will likely open up in the organization, and this will be a chance for those who work hard to be promoted. Considering the type of powers I have, both positional and personal, I believe I have the influence needed to solve this dilemma. As mentioned above, I would apply referent, legitimate, reward, or coercive Power, if necessary, to influence the staff, and I would use expert Power to control the chairperson.

Having worked in this position for a few years, I have taken part in many projects that required the use of the stadium, like high school games at all levels, from district to national, fundraising events, and campaigns for different causes, for example, political campaigns, among other things. These activities have made me influential in the community, and I believe this will play a significant role in negotiating with the stakeholders. I can successfully solve this dilemma by influencing the chairperson, my staff, and a substantial part of the community. Therefore, creating more influence through alliances will not be necessary.

Negotiation

Suppose that after my influential tactics, the chairperson and staff decide to split the renovation costs 50-50 between the team and the county; the subsequent steps would be a negotiation. Negotiation would involve the team, us, and other stakeholders directly affected by the stadium’s renovation. Such stakeholders include, most importantly, the county’s residents, businesses, and companies associated with the stadium. Residents should be involved in the negotiation because some will likely be against the renovations. For example, the average non-sports caring resident would feel that the money, which is government funds for county projects, should be directed towards better projects like healthcare. Granted, these individuals have every right to oppose the renovations since it’s also their money paid through tax.

Further, involving the various businesses can provide additional data on whether this project will bring more benefits or losses. Companies regularly conduct environmental scanning, collecting data on trends and occurrences in the internal and external environment that affect the business’s current or future success (Albright, 2004). The stadium renovation is a trend that will affect these businesses; therefore, involving them in the negotiation process will help shed more light on the positive impact of the upgrades.

Strengths and Weaknesses of the County’s Negotiation Position

            Taking an integrative negation approach is the best strategy in this case because this approach adopts a win-win methodology, which is what all parties involved here want. Nevertheless, several strengths and weaknesses of our negation position will play a major role in the negotiation. Looking at strengths first is a shared interest. The team wants a renovated stadium to compete with other teams. On the other hand, the county benefits significantly from the revenues generated from the stadium, and a renovated stadium means more revenue. This shared interest is a strength because they eventually want the same thing. Therefore, the likelihood of a win-win situation is high. Secondly, there is a long-lasting relationship between the team and the county. Influential tactics, particularly personal appeals, whereby we appeal to the team’s loyalty to the county, can be a strength in this case. The team has played in the stadium for the last twenty years, and the county and its residents have continuously supported them. This relationship between the two sides is a strength in the negotiation. Lastly, another strength is that the team threatened to leave the county and build another stadium somewhere else; however, this will be way more money than the half we are asking them to renovate. As such, the team’s position gives us some power to coerce them to agree to the 50-50 shared renovation cost.

Contrastingly, the negotiation has some weaknesses. Some stakeholders, particularly the public, may disagree with the renovation, claiming that the stadium should not be renovated so soon or that the county funds could be used elsewhere, like in education or healthcare. It is imperative that these funds be used wisely, and everyone’s opinion must be considered. Suppose a majority of the public disagrees; there is a likelihood that the county will dismiss the project. Secondly, the team could consider the 50-50 shared cost a loss on their side and reject the deal. Thirdly, the team could have already found another stadium or another way to build another stadium in case we fail to meet their conditions. In this case, convincing the team of a 50-50 shared cost would not be easy when they think they have a better deal elsewhere.

Systems thinking is the holistic methodology of exploring a system. Accordingly, this enables one to focus on how each part of a system interrelates for the efficient operation of the whole system. In a dilemma mentioned previously, I would employ systems thinking to formulate options for common gains for all stakeholders involved (Johnson, 2019). For instance, the citizens proposing the funds be allocated elsewhere because they do not care for sports could be; the stadium could hold free medical services whereby various hospitals could set up tents and treat people for free. Further, the stadium could hold demonstrations and meetings for social causes like the black lives matter movement. Devising various ways the stadium can serve the county apart from sports will create a win-win situation for everyone involved.

References

Albright, K. S. (2004). Environmental scanning: radar for success. Information Management Journal, 38(3), 38-45.

Brink, R. V. D., & Steffen, F. (2008). Positional Power in Hierarchy. In power, freedom, and voting (pp. 57-81). Springer, Berlin, Heidelberg.

Johnson, C. E. (2019). Meeting the ethical challenges of leadership: Casting light or shadow. Sage Publications.

Nye, J. S. (2013). Hard, soft, and smart Power.

Tsai, G. (2014). Rational persuasion as paternalism. Philosophy & Public Affairs, 42(1), 78-112.

Uhl-Bien, M., Riggio, R. E., Lowe, K. B., & Carsten, M. K. (2014). Followership theory: A review and research agenda. The Leadership Quarterly, 25(1), 83-104.

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Imagine you are the chief of staff for the chairman of the board of supervisors responsible for the stadium district of your county. The professional sports team that uses the stadium believes that the 20-year-old stadium needs upgrades to stay competitive with other teams around the league. They demand that the county pay $200 million for said upgrades, or they will leave the county and build a new stadium elsewhere.
The county originally paid for the stadium’s construction with a sales tax initiative that was unpopular with many voters. There are strong opinions and valid arguments from voters, the business community, and various other stakeholders and forces regarding whether the team should stay in the stadium.
As the chief of staff, you are responsible, with your staff, to assist the chairman in determining the best path forward to deal with this situation. In 1,500-2,000 (total) words, do the following:
Part I (750-1,000 words):

1. Determine the type of personal Power you possess in this situation. Describe your Power regarding the chairperson, staff, and other parties interested in this issue.
2. Determine the type of positional Power you possess in this situation. Describe your positional Power regarding the chairperson, staff, and other parties interested in this issue.
3. Given the type of Power you possess, determine whether you have the influence required to move this issue in the right direction. Explain what kind of influence you may have and if you must create more impact through other alliances, etc.
Part II (750-1,000 words):
Imagine that the chairman and your team have decided that it would be fair for the county to split the costs for renovations with the team and pay half of the expenses.
Assess the strengths and weaknesses of the negotiation position the county is in to get the team to pay half of the costs by doing the following:
1. Determine if the negotiation is just between the county and the team or if other stakeholders should be involved. Explain why.
2. Outline the strengths and weaknesses of the county’s negotiation position. Explain why each is a strength or a weakness.
3. Explain how you can employ systems thinking to strengthen your position, manage various forces such as public opinion and political pressure, and obtain results that maximize the public good.
Use four to six scholarly resources to support your explanations.
Prepare this assignment according to the guidelines in the APA Style Guide in the Student Success Center. An abstract is not required.

Company Law

In British company law, the merits of the liquidator’s arguments are that Mr. Lay cannot recover his loan from the company and that he should instead be made to contribute to the company’s debt because there is no difference between him and the company. Do not deal with any criminal element involved (40 marks).

The claim by the liquidator to have Mr. Lay take responsibility for the company’s losses and that he should not seek to recover the money he invested in the company is null and void according to British company law. According to Lim (2014), Enron and Mr. Lay are distinct legal entities, each enjoying the rights of a legal entity. According to Wymeersch (2001), a company can easily be defined as a legal entity brought about by the laid down procedures in the British companies act 2006, with its evidence being the issuance of a certificate of incorporation, also, according to the decision in the Solomon vs. Solomon co. Ltd, the legal status of a company run by an individual can have the trader not only limit the liabilities of the company to the contributions he made to the business enterprise but also evade the severe risks to a great extent by subscribing for debentures of the company as opposed to shares he owns in the company (Rickford, 2005).

British company law allows the owner of a company to sue his company in case of a loss and eventual liquidation. In the case of Solomon vs. Solomon Company Limited, the House of Lords has been satisfied that Solomon Company Limited’s formation was according to the company’s act. Therefore the founder is a separate entity and should not be viewed as an agent or controller of the company. According to Lim (2014), the company’s assets and liabilities belong to it; this gives Mr. Lay the legal right to recover the money owed to him by Enron. The implication of this law is to shield the company’s owner from the company’s liabilities in case one occurs.

Mr Louis Bourget’s and Mr. Andrew Fastow’s duties as directors of Enron, explaining which duty, if any, they breached under the Companies Act 2006 (60 marks).

Mr.  Louis Bourget and Mr. Andrew Fastow are senior employees of the Enron company, and it required them to make reasonable decisions for the company’s good and bear the responsibility for the company’s losses that occurred on their watch. The Company’s Act 2006 stipulates that employees who occupy senior positions in the company where they are required to make standard, reasonable business decisions at their discretion can be held responsible for actions that go below expectations (Naniwadekar, 2008).

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The law would have been lenient to the two individuals if their actions benefitted the business enterprise, especially where the company’s owners were directly involved. This was, however, not the case because Mr.  Louis Bourget’s decision to divert the company’s funds internal account and Mr. Andrew Factor’s use of the company’s funds to set up multiple business enterprises he used to defraud the company can be termed as actions amounting to crimactivitiestions. This will, therefore, require that the two individuals be held responsible for their actions which led to financial losses to the company. The reason for this is that the two senior employees of the company acted fraudulently by intentional wrongdoing beyond the authority bestowed on them by the employer (Teklè, 20Ins, this liquidator ase, will be keen to pursue those responsible for the day-to-day running of the company’s affairs for the two to be charged for going against their principal responsibility to the affairs of the company (Lim, 2014).

Other Related Post: Communication Dilemma

References

Lim, E. (2014). Attribution in Company Law. The Modern Law Review, 77(5), pp.794-807.

Naniwadekar, M. (2008). The Law of Agency as applied in Company Transactions. European Company and Financial Law Review, 5(3).

Rickford, J. (2005). Fundamentals, Developments, and Trends in British Company Law – Some Wider Reflections Second Part: Current British Priorities and Wider Reflections. European Company and Financial Law Review, 2(1).

Teklè, T. (2018). Labour Rights and the Case Law of the European Court of Justice. European Labour Law Journal, 9(3), pp.236-262.

Wymeersch, E. (2001). Company Law in Europe and European Company Law. SSRN Electronic Journal.

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Coursework Week 8: Company Law

Documentary Film – Enron: The Smartest Guys in the Room (2005)

Film Summary

‘Enron: The Smartest Guys in the Room’ is a 2005 documentary film detailing American history’stmost most significant corporate scandal and corollary. Enron is the story of insatiable greed made possible by the perpetratorcrecreativeability to invent highly questionable methods to portray the company as a success and win the trust and admiration unsuspectingly public with devastating outcomes. The outcomes include suicides by corporate executives, jail sentences, the dismissal of more than 20,000 employees, yees, and the loss of life savings by thousands more. At the same time, the company’s top exec walks away with more than $1 billion. The company gave itself an appearance of profitability by inflating its profits and concealing its losses through corrupt bookkeeping practices, with the surrender of its highly paid firm of accountants, Arthur Anderson.

Within two years of its founding in 1985 by Kenneth Lay, the compbecameomes embroiled in a scandal after two of its trabeganbegin betting on the oil market resulting in consistent profits. But betting and the publication of consistent profits, which very few questioned, would be the company’s hallmarkpany right up to its collapse.

Enron aimed to reinvent the energy industry marketplace where gas and electricity could be traded like shares and bonds. Enron gambled in the energy m, manipulatedlated it and other common cities, and even considered ‘trading weather’ at some point.

Its executive officers were involved in the company’s unethical and often criminal activities. These include:

• Its founder Kenneth Lay, gambled away all of the company’s assets and reserves and encouraged the company’s president to risk more in trading and also claimed that the company was the ‘best energy company in the world when he should have known that the company was bankrupt and had been worthless for years;
• its president Louise Bourget who diverted the company’s profits into his personal bank account destroyed the company’s record, and gambled the company’s money;
• its new CEO, Jeffrey Skilling, used an accounting tactic, mark-to-market, to record the company’s projected future profits as its current income as soon as a contract was signed, regardless of the actual profit that the agreement would generate;
• Lou Pai, the elusive CEO of Enron Energy Ser, was obsessed with gambling and visiting strip clubs using shareholder money. They left with a $250 million payout when his department was $1 billion in debt.
• Andrew Fastow, the Chief Financial Officer, breached his duty to Enron and its shareholders and made over $45 million by creating several front companies to hide Enron’s losses.

By maintaining an appearance of profitability, the company’s executives consistently rewarded themselves with huge bonuses.

Question

Assume that Mr. Kenneth Lay, the founder of Enron, had provided a loan of £1 million to the company and that following the company’s collapse, Mr. Lay attempted to recover his money. Still, the liquidator resisted his claim that there was no difference between Mr. Lay and the company since he had overall control over the company and that he should be made liable for its debts instead of trying to claim money from the company,

In the film, Mr. Louis Bourget, the president of Enron, diverted the company’s profit into his account, destroyed the company’s records, and gambled the company’s money. Mr. Andrew Fastow, the company’s Chief Financial Officer, created several companies he used to defraud Enron for tens of millions of dollars.

You are a legal team summoned to attend a case conference. The liquidator of the company has asked your team to prepare a legal analysis of the company law issues raised in the film and advise on the following:

1. In British company law, the merits of the liquidator’s arguments are that Mr. Lay cannot recover his loan from the company and that he should instead be made to contribute to the company’s debt because there is no difference between him and the company. Do not deal with any criminal element involved (40 marks).
2. Mr. Louis Bourget’s and Mr. Andrew Fastow’s duties as directors of Enron, explaining which duty, if any, they breached under the Companies Act 2006 (60 marks).

The answer should be between 750 – 1000 words long and address all the questions raised. The written response carries 50% of the marks available for this case conference. The group presentation brings the remaining 50%. Effects may be deducted if you do not keep within the word margin. You are expected to word count your work and note this at the end. You are reminded that you must support your answer with relevant company law cases and statutory provisions.

Assessment Rationale and Criteria

The assessment method for this part of the module is designed to meet the module’s objectives and facilitate its outcomes. The coursework will allow students to develop their research and data interpretation skills as team members, regarding the group presentation, and as individuals in the care of the written answers. The written part of the coursework will allow students to develop their legal writing skills. Students must ensure they satisfy the assessment criteria their work will be marked against.

Grade A

• Precise identification of the legal issue.
• Precise identification of all the relevant areas of law.
• Demonstrate a thorough knowledge and understanding of the relevant principles and case law, including a critical analysis thereof.
• Accurate application of law to question addresses precisely the legal issues raised therein.
• Use authority (cases and statutes) to support the arguments, advanced, ed, and conclusions reached.
• Presentation of work which is legible.
• Clarity of expression.