Ethics in Business: Enron's Fall and Fake Sales Tactics
This paper examines the relationship between ethical business conduct and organizational competitiveness. Drawing on Villanova, Lozano, and Arenas (2009), it identifies enhanced reputation and innovation opportunity as key benefits of ethical behavior, while also acknowledging the costs associated with increased reporting and transparency. The paper uses the collapse of Enron — and the criminal convictions of its top executives — as a stark illustration of how unethical practices destroy both organizations and individuals. A second discussion question explores a real-world example of deceptive pricing at a local furniture store, analyzing how misleading "sale" tactics undermine customer trust, damage reputation, and ultimately reduce sales through negative word-of-mouth.
- Benefits of Ethical Business Practices: Reputation and competitiveness gained through ethical conduct
- Enron as a Case Study in Unethical Conduct: Enron executives convicted following massive corporate fraud
- Costs of Operating Ethically: Transparency and reporting increase operational costs
- Deceptive Pricing: A Local Furniture Store Example: Furniture store rotates fake discounts to deceive shoppers
- How Unethical Behavior Hurts the Business: Lost sales and damaged reputation follow unethical tactics
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What makes this paper effective
- Uses a high-profile corporate scandal (Enron) with specific factual details — names, sentences, and charges — to ground abstract ethical arguments in real consequences.
- Balances academic citation (Villanova, Lozano & Arenas, 2009) with personal observation, demonstrating that ethical issues exist at every scale of business activity.
- The furniture store anecdote is well-constructed: the student documents repeated visits, a pattern of rotating "deals," and a salesperson's candid admission — all of which build a persuasive first-person case study.
Key academic technique demonstrated
The paper employs a two-scale comparison technique: it pairs a macro-level corporate ethics case (Enron) with a micro-level consumer experience (local furniture store) to show that ethical failures manifest across all business contexts. This contrast strengthens the argument by preventing the discussion from remaining purely abstract.
Structure breakdown
The paper opens by surveying the benefits of ethical conduct, citing peer-reviewed scholarship before pivoting to the costs. It then uses Enron as a concrete negative example. The second half shifts to a personal narrative about deceptive retail pricing, applying the same ethical framework to show how even small-scale dishonesty damages reputation, customer relationships, and long-term revenue. A references section closes the paper in APA format.
Benefits of Ethical Business Practices
The benefits of conducting business in an ethical way are varied. Increased competitiveness is one such benefit. Ethical businesses enjoy an enhanced image and reputation. Villanova, Lozano, and Arenas (2009) surmise that organizations pursuing a positive image and reputation are more competitive than their counterparts. Those corporations with an enhanced reputation have more opportunities for innovation, which furthers their competitive advantage.
Enron as a Case Study in Unethical Conduct
One only has to look at the results of unethical business practices and the downfall of Enron to see how unethical practices can destroy both the organization and its executive officers:
Jeffrey Skilling — former Enron CEO — was sentenced to prison and ordered to pay $45 million in restitution.
Kenneth Lay — Enron founder — was convicted of conspiracy and securities fraud.
Andrew Fastow — Enron Chief Financial Officer — was sentenced to six years in prison after making a deal with prosecutors in exchange for his testimony ("Corporate Crackdown," n.d.).
Clearly, in addition to increased competitiveness, one of the primary benefits of conducting business ethically is not only the ability to remain operational, but also the avoidance of criminal prosecution for corporate executives.
References
Corporate crackdown: Enron. (No date). [Motion picture]. United States: McGraw-Hill Irwin.
Villanova, M., Lozano, J., & Arenas, D. (2009). Exploring the nature of the relationship between CSR and competitiveness. Journal of Business Ethics, 87, 57–69.
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