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Ethics and Specialized Knowledge
Enron's case summary For five years, the company managed to hide such fraudulent activities from the public, and those employees who doubted Enron's financial condition were either fired or silenced.
Enron is an interstate pipeline company that was founded in 1985 as a supplier of power utilities. In the 20th century, Enron had grown quickly, and due to increased competition in the global market, the company decided to diversify and use international investments that would help in keeping their market position. Enron's rapid expansion exceeded their funding abilities, and this resulted in the creation of a complex web of off-balance-sheet financing (Silverstein, 2013). It is clear that they ignored the dangers associated with their activities in bringing serious losses. Moreover, in 2001 is when the company overstated on its revenues and its liabilities became hidden from the public.
Additionally, their driving culture became reinforced by incentive schemes that promised and delivered rewards that were huge concerning their compensation packages (Silverstein, 2013). As such, their outstanding performance required them to portray the company as able and the executives decided to use the mark to market valuation. The contracts produced using this approach had produced artificially high earnings and it is through this that investors were lured to continue purchasing the company stocks. Employees were also given suggestions about investing their pensions in stock...
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In the meantime, the top executives at Enron embezzled the company and managed to drive the stock prices high as they pocketed the investors' funds. During this time, the company was not generating cash flow that was adequate to sustain their extravagant expansion activities. In December 2001, the management filed for bankruptcy; Arthur Andersen's accounting firm was also affected and in the process because of its dealing with Enron, who was their client (Silverstein, 2013).
Ethical issue involved
The moral issue at Enron was the executives' personal pursuit of wealth using rapid growth strategies. This then led to the introduction of extreme schemes of investments that attracted and motivated people who were bright and driven by diversification and expansion activities. However, this resulted in having an unhealthy focus on the company's short-term earnings. Another ethical assessment is that Enron massaged its growth figures on their income and this left them with a cash shortfall. Therefore, they resorted to masking their borrowing abilities, and this resulted in the creation of schemes that produced secret funding that was…
References
Marianne M. J. (2009). Business Ethic Case Study and Selected Readings (sixth Ed.). Salt Lake City, UT, U.S.A.: Southwestern Cengage Learning.
Silverstein, K. (2013, May 14). Enron, Ethics and Today's Corporate Values. Forbes. Retrieved from http://www.forbes.com/sites/kensilverstein/2013/05/14/enron-ethics-and-todays-corporate-values/#7a4cfc557688
Ethical and Moral Issues in Business A situation or problem requires an organization or a person to choose between some alternatives. These are evaluated as ethical (right) or unethical (wrong). Involvement of a difference of belief is a moral issue. A slight difference between moral issues and ethical issues is about "preference." Such issues play an important role in business dealings. This essay discusses various ethical and moral issues in business.
This caused the California Energy crisis to become worse by: encouraging traders to engage in actions that would directly increase the wholesale costs. Despite the fact, that there were more than enough supplies to deal with the situation. As a result, traders embraced the directives of Skilling and the company itself by overlooking the ethics of society and focusing on those of the organization. (Cline, 2011) ("Business Ethics," n.d.,
Moral decisions in business are best served by adhering to the ethical code of rule ultilitarianism. Rule utilitarianism provides a workable code for businesses, especially in the wake of the Enron and WorldCom financial scandals. By adopting rule utilitarianism, businesses can help to prevent serious damage caused by decisions based solely on the consequences of a single act, and instead allow businesses to focus on ethical rules that ensure the
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
Enron was at one time considered to be a highly successful energy firm based out of Houston, Texas. The company was initially formed from a merger of two prominent gas pipeline companies in 1985, and the company's scope then broadened to include the provision of products and services in the realms of electricity, natural gas, and communications. Enron's reach expanded beyond the United States to the international market, as the
THE PEOPLE BEHIND THE RISE AND FALL OF ENRON Kenneth Lay being one of the pioneers of Enron from its establishment in 1986, had lead the way of Enron's emergence as one of the leading company in the U.S. And eventually to its collapse and declaration of bankruptcy on December 2001. Kenneth Lay held the position as the CEO and chairman of Enron from 1986 to January 23, 2002. Lay is