Enron Corporation and the American

¶ … Enron Corporation and the American Fur Company

To construct a comparison between Enron and American Fur, it is useful to ask some questions. Were the executives at Enron more unethical than John Jacob Astor? Or was Astor more unethical than they were? Were there any indications that Astor or the Enron executives felt any social responsibility for their actions?

To answer these questions, several factors need to be considered. The regulatory environment for a company operating in the late 1900s, Enron, differed greatly from the environment for a company operating in the early 1800s, American Fur. Dissimilar regulatory atmospheres caused the companies to act in unlike fashions even though both companies existed in a capitalistic country where the primary goal was the same for both, monetary profit. To reach the goal, both companies relied on some unethical practices. Enron executives colluded to hide the impending financial disaster from their employees and the company's shareholders. John Jacob Astor constructed an organization, a trust, which gave him a monopoly in the fur business and the power to control pricing. Many regulatory requirements evolved from efforts to eliminate monopolistic practices, such as those used by Astor. However these rules did not stop the Enron debacle from happening.

Enron executives disguised their financial dealings and had the cooperation of their auditors, the investment community, politicians, and regulatory agencies to perpetuate the deception. While Enron executives were selling massive quantities of company stock, they were promoting purchases of the stock by company employees. The company sponsored retirement plan forced some amount of retirement savings to be held in the form of company stock. When the price of the stock plummeted, many employees lost a large percentage of their retirement savings. Most of the Enron executives have taken the approach that they made as much money as possible for themselves. Other people should have been smart enough to know when to sell. Enron executives believed that they should receive substantial rewards for their innovations that helped grow the company. These executives have shown no remorse toward the many people whose lives have impacted by the executives' lack of ethics. Even the most extensive legislation does not prevent unethical activity. The outcome of the Enron situation is still unknown. Most likely some rules will be updated and some new rules will be added.

In the case of American Fur, Astor created the company to dominate the fur trade in the American West. Domination led to elimination of any potential competition and control of the supply and pricing of fur products. Astor profited in every way possible by taking advantage of Native Americans and the trappers. Few restrictions inhibited his approach to building his business. Environmental concerns did not exist during American Fur's existence. American Fur and other companies like American Fur got whatever profit they could as quickly as possible. That kind of behavior would be unacceptable today. Huge financial rewards accrued to him for being astute. Indirectly his success in the West focused more attention on the West and encouraged exploration and development by others. Astor retired from business as the richest person in the world, so he was very successful at monopolizing the fur trade. As many other wealthy people would follow his example, Astor became somewhat of a philanthropist in his later years. At least he showed some inclination toward social responsibility. Ironically the laws enacted to outlaw trusts have come to the forefront again with the battle between the Justice Department and Microsoft Corporation. In the same ironic way, Bill Gates has emulated Astor through socially responsible acts such as supplying childhood illness vaccines to African countries.