Ethical failures in management communication: the Enron case

Listening

Perhaps one of the most well-known organizational examples of the lack of use of ethical standards in management communications is readily supplied by Enron. Enron was certainly one of the most duplicitous companies at the turn of the most recent millennium, and engaged in numerous unethical practices including "shady bookkeeping" (Roston). However, the way it treated its many hardworking employees (the vast majority of which were unaware of the fact that the company had been tediously bordering on the verge of bankruptcy for several years) provides an egregious example for a violation of ethical standards in management communication.

The crux of this situation is that despite the fact that the company had little money and was going to declare bankruptcy within a matter of months, senior level management was telling employees that the company was still profitable. Jeff Skilling and Ken Lay, the company's CEO and founder, respectively, were mostly guilty of not only telling their subordinates that the company was still a lucrative one, but also widely encouraged them to continue investing in its stock which they sold off their shares as swiftly as possible. Communicating this message to employees is unethical because it is illegal and constitutes what is known as insider trader.