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…
