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Ethical Issues in Business and Society: Enron: The Smartest Guys in the Room
Enron manipulated the energy market in a manner that hurt consumers and did not reflect the state of real economic demand and supply. This was not capitalism, rather it was criminal behavior. It also used underhanded accounting measures that did not reflect its real losses to delude investors, including employees that had sunk their savings into the company.
The capitalist system demands evidence of short-term profitability for a company to survive. There is little respect for a company that grows slowly, particularly in these volatile economic times. Enron's ability to make it seem as if it was wildly profitable on paper was rewarded.
Q3. Socrates would have said that the ultimate goal of life was excellence, and that true Platonic perfection is not realized by the pursuit of sensual, short-term pleasure. The truth, rather than the mirage must be the focus of the company. Likewise, Aristotle...
Yet even from an egotistical, rational selfish perspective, the activities of Enron should have been obviously 'wrong,' given the inevitability that they would be eventually revealed.
Q4. Andy Fastow was the 'brains' behind the operation, and played a critical figure in making Enron's actions look legitimate. He also was able, for a time, to ensure that these unethical practices did not actually violate the letter of the law.
Q5. The immediate cause of the downfall lay in the hands of the company's leaders who engaged in concealment of the firm's real profits. However, a failure to adequately regulate corporate enterprise was also to blame, on the part of the government, as well as investment advisers who did not advise clients to manage their risk, or to be cautious of suspicious profits. When people invested in the company, despite suspiciously positive…
ethical issues for business organizations in the twenty-first century. The forces of globalization have increased the degree to which diverse groups in society have grown dependent on one another. Hence, their expectations influence the freedoms and responsibilities of other groups. The expectations of various stakeholders have placed greater responsibilities on business organizations to be ethical in their communication with their stakeholders. Business organizations are under growing pressure to be
ethical issues have been increasingly brought to the forefront. This is because a variety of challenges are impacting the way executives and employees are behaving inside the workplace. A good example of this can be seen by looking no further than Tyco. What happened is Dennis Kozlowski was the CEO of the company from the early 1990s until 2002. This is when a wide scale fraud was reported, as
Consequentialist and Deontological Ethical Issues. Consequentialism states that the morality of an action is determined by the specific results of that action. Deontology, on the other hand, states that the morality of an action is determined by duty or adherence to given rules. (Theodore Roosevelt) Consequentialism is based on the consequences of actions. According to consequentialism, actions are right or wrong depending on whether their consequences further the goal. The goal
The law standardized internal control and auditing procedures. It mandated auditing committees use stricter standards when vetting accounting firms and raised standards for corporate responsibility for fraudulent accounting. It provided more stringent conflict-of-interest guidelines for accounting firms. It was passed by the U.S. Congress to protect ordinary investors from losing their money due to fraudulent accounting practices which ordinary investors could not monitor, through public documents. It also established
From all facts and appearances, those Enron executives gave lip service to ethics, then went on their own way, making as much profit as they could while the company teetered on collapse. One final example from Enron's "Code of Ethics" is titled "Twenty-Twenty Hindsight" which carries its own irony without delving into its points. Lay writes on page 10 that if any employees' security activities or transactions "become the subject
Without this duty to take car of one another, government and society would have no reason to exist. Because man is a social creature, it seems reasonable that society is meant to exist, but that society will only be stable as long as everyone in it is treated fairly -- that is, ethically. Therefore, business ethics are not only important for the longevity and profitability of a specific individual