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Business Ethics -Enron

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How did the corporate culture of Enron contribute to its bankruptcy?

The corporate Culture at Enron could have contributed to its bankruptcy in many ways. Its corporate culture supported unethical behavior without question for as long as the behavior resulted in monetary gain for the company. It was describe as having a culture of arrogance that led people to believe that they could handle increasingly greater risk without encountering any danger. Its culture did little to promote the values of respect and integrity it instead rewarded ‘innovation’ and punished employees deemed week. The performance evaluation process for employees that was dubbed “rank and yank” utilized peer evaluations, and each of the company’s divisions was forced to fire the lowest ranking employees. This created cut-throat competition not only against Enron’s external competitors but also within the organization. It pitched employees against each other. The internal rivalry created in turn contributed to less communication between operations for fears of being fired. The “survival for the fittest” atmosphere reached the point where illegal activity was deemed necessary to stay on top of the game. Enron’s compensation plans also seemed less concerned with generating profits for shareholders than with enriching officer wealth. Its culture encouraged flaunting the rules and even breaking them. Each Enron division and business unit was kept separate from the others and as a result very few people in the organization had the big picture perspective of the company’s operations. All these aspects of the corporate culture at Enron contributed separately to its eventual bankruptcy

Did Enron’s bankers, auditors and attorneys contribute to Enron’s demise? if so, how?

Yes, the bankers, auditors and attorneys have contributed to Enron’s demise. This reason for this is because they took sides

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