...Ethics and Capitalism “Respect, Integrity, Communication and Excellence.” Its “Vision and Values” mission statement declared…”We treat others as we would like to be treated ourselves…We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness, and arrogance don’t belong here.” This is the motto of Enron. Falling short of their words, we find the falling of this company through their illegal ethics that brings forward much of their self-interest needs and not those of the company and investors that they are responsible for and to. After the investigation, their accounting firm, Anderson, played both sides by providing dual services, auditing and consulting, which is considered a conflict of interest. They would take money from new investors and pay the old ones, they knew how to hide the debts and only show where there were profits. Falsifying documents and shredding of reports to hide what they didn’t want investors & employees to see as well. Senior executives cashing out their stocks to make millions for themselves and telling the rest of the company that they cannot cash out theirs, that it’s for the sake of the company to keep being invested. At the cost of the employees and investors, the executives were unethical, breaking the rules of the SEC and seek to gain it all for themselves, this is “self-interest” and illegal. They knew what they were doing, especially when it was reported by an Enron accountant saying she...
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...I. Transformational leadership = ideally in transformational leadership, everyone, leaders, followers, and organizations, change. They transform. II. Leaders interact with followers with respect to their “emotions, values, ethics, standards, and long term goals, and includes assessing followers’ motives, satisfying their needs, and treating them as full human beings” (Northouse, 2007). III. All leadership theories are about influence. Transformational leadership is about influence that encourages followers to go well beyond what is normally expected of them because: (a) it makes individuals’ aware of how significant the results of their efforts are (moral purpose), (b) it emphasizes the interests of the team, the organization over self-interest, and (c) it motivates subordinates to take care of needs that operate at a higher level (Bass, 1985; Yukl, 2006). IV. It’s about improving each follower’s performance and helping followers develop to their highest potential (Avolio, 1999; Bass & Avolio, 1990). In addition, transformational leaders move subordinates to work for the interests of others over and above their own interests (moral purpose) and, in so doing, cause significant, positive changes to happen for the good of the team and organization (Dubrin, 2007; Kuhnert, 1994). V. Burns (1978) differentiated between transactional and transformational leadership. a. Transactional leadership emphasizes exchanges ( transaction) between followers and leaders. b. Transformational...
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...Two weeks into the trial of Enron founder Kenneth Lay and former chief executive Jeffrey Skilling, the defense's strategy so far has been clear: Undermine the credibility of the government's witness and barrage the jury with a deluge of complicated and, sometimes, mind-numbing corporate conference calls in an effort to show the defendants were unaware of any corporate chicanery at the company. Skilling gets 24 years Lessons from Enron: Just say 'sorry' Meet the players It's a strategy that defense teams have widely used in the recent corporate trials ranging from HealthSouth (Research) to WorldCom with mixed results. But with Enron -- the granddaddy of all cases of corporate malfeasance -- Lay and Skilling's dynamic duo of defense attorneys, Houston-based Michael Ramsey and Los Angeles-based Daniel Petrocelli, are taking their defense one step further. The attorneys contend that not only were the defendants unaware of any wrongdoing but, with the exception of a few bad apples, Enron never committed any fraud. They blame negative publicity, courtesy of the former CFO Andrew Fastow's questionable side deals, and a lack of market confidence in the post-bubble environment for the company's implosion in December 2001 -- an event that sparked billions of dollars in losses for investors and paved the way for a slew of corporate scandals. A brilliant but risky defense "It's a tough thing to sell," he said. "If the prosecutors can prove the fraud occurred and the defense lawyer insists...
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...Question 2: Prejudice can be hurtful and destructive. Discuss how you can personally reduce prejudice in your workplace – please provide an example. Prejudice has been defined by multiple authors in attempts to explore this dense subject. Oskamp (2000) states that prejudice is a consequence of perceiving others as different from oneself or one’s group. Fishbein (2002) defines prejudice as an unreasonable negative attitude toward others because of their membership in a particular group. However, Allport (1979) provides a more in depth definition; he explains that “the word prejudice, derived from the Latin noun praejudicium, has, like most words, undergone a change of meaning since classical times. There are three stages in the transformation. 1. To the ancients, praejudicium meant a precedent – a judgment based on previous decisions and experiences. 2. Later, the term, in English, acquired the meaning a judgment formed before due examination and consideration of the facts – a premature or hasty judgment. 3. Finally the term acquired also its present emotional flavor of favorableness or unfavorableness that accompanies such a prior and unsupported judgment.” (Allport. 1979, p.6) Duckitt (1994) identified several interventions that may possibly reduce prejudice under “appropriate circumstances”. He explained that “these interventions have typically involved action at one of the three levels identified – that is, social structure and intergroup relations, social influence,...
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...Enron Committed Suicide Name Leadership/LDR 531 April 11, 2011 Instructor Enron was considered the major player in energy and considered as one of the most successful companies until it collapsed in 2001. Failure of this company did not only affect the employees and stakeholders, but also it had a negative impact on the United States economy. Public scrutiny of Enron’s failure, through legal battles, revealed how the toxic organization leadership and culture were two of the major reasons the world’s top energy company collapsed. In this paper, the subject to be examined is how Enron’s organizational structure, culture, and the major contributors contributed to its failure. Enron’s Failure “Originally a gas pipeline company, it metamorphosed into the world's largest trader in gas, electricity, water, and all sorts of post-modern commodities such as bandwidth” (Gutman, 2002, p. 1). It appeared that Enron was one of the most successful companies in the United States. Share prices were doing well in the stock market, and the share value consistently grew, making them very attractive. The company’s growth was perceived as genuine until the company suddenly collapsed, leading to a disclosure of a scandal that involved the top leadership of the company. The scandal that led to the failure of Enron did not happen overnight. The failure was rooted in the company’s unethical leadership (Weidlich & Calkins, 2006). Enron’s fast rise to the largest energy management...
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...The text is an article called “Kenneth Clarke blames English riots on a ‘broken pedal system’ in the newspaper “The Guardian”. The writers are Paul Lewis, Matthew Taylor and James Ball, and the topic is the riots in England. I will start out giving the paragraphs headlines, to help summarize the article; • Line 14 to line 32: Kenneth Clarke says that the riots are caused by a ‘broken penal system’ and that 75% of the young rioters have been in criminality before. It’s the feral underclass. • Line 32 to line 34: David Cameron does not agree with Clarke and says that the riots were not about poverty. • Line 35 to line 53: The empirical study of the causes will involve researchers interviewing hundreds of people who had something to do with the riots. • Line 54 to line 67: A battle between Davis Cameron and Kenneth Clarke. The article is about the riots in England. Kenneth Clarke blames a broken penal system for the riots, because people don’t get punished enough for their crime, and says that it’s mostly the people with no money, who are into crime. David Cameron on the other hand, doesn’t blame any system or anything, he says that it’s “just” crime, nothing else. The article ends with Clarke saying, that it’s about having a job, a strong family and a decent education. And last but not least, a positive attitude. In the article there are quotes from the justice secretary, Kenneth Clarke, and quotes from the Prime Minister, David Cameron. The quotes is used to...
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...1. Explain the concept and rationale behind mark to market accounting and it’s significance to Enron. When the President of Enron, Kenneth Lay, hires new CEO Jeffrey Skilling, a very energetic and a “dreamer” who joins Enron on the condition that they utilize mark-to-market accounting, allowing the company to book potential profits on certain projects immediately after the deals are signed. To keep its stock price going up par example Enron began a venture that might make $50 million 10 years from now, it could claim the $50 million as current income. However, this projects turn out to be successful. This gives Enron the ability to subjectively give the appearance of being a profitable company even if it isn't. 2. Describe the Enron culture. The culture of Enron was very competitive and all the employees had the same attitude of their bosses. Par example Jeffrey Skilling imposes his idea on Enron by establishing a review committee that grades employees and annually fires the bottom fifteen percent. This creates a highly competitive and brutal working environment. 3. What is Andy Fastow's significance to Enron? Andy Fastow’s was the Enron’s CFO. He helped the company, hiding the losses with a “Tom Ponzi’s scheme”. One of Enron tactic was to create phony offshore corporate shells and move their losses to those companies, which were off the books. The film shows a schematic diagram tracing the movement of debt to such Enron entities. Two of the companies are named "M....
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...Ethics in Strategic Planning Roger Fair MGT/498 November 23, 2015 Eligah King Ethics in Strategic Planning Ethics and social responsibility is essential to any company, no matter how size. Ethics dictate the actions and decisions of every individual in a company or firm. Ethical standards are set by the owner or CEO and filter down through the rest of the company. The owner’s, or CEO’s, behavior toward employees, customers, the community, investors, and vendors affect the behavior of his employees. The employees look to the CEO to set the standard. “Observing high ethical standards is sound business strategy -- resulting in customer loyalty, higher employee retention and a positive image in the industry and within the community” (Hill, 2015). One of the most well known companies that did not live up ethical standards was Enron. Ethics come into play on many fronts. When developing a strategic plan ethics must be considered from the earliest stages. If it is the first or the last plan that a company develops does not matter. Long term plans and visions must take into consideration what the ethical base of the mission statement will be. A company that does not take ethics into consideration during the earliest stages of planning opens itself up for failure. It is also important to create a code of conduct to provide direction about how employees should act in situations they may encounter. Ethical choices can sometimes be personally challenging because adhering to a high...
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...Enron Corporation 1. Why did the company collapse? Enron In order to understand what happened within the company we need to start with its origins. Enron Corporation Inc. (later became Enron) begun operating in Huston Texas in 1985. It started from a merger of two natural gas companies, becoming the largest commercial, natural gas pipeline operating in the United States at that time. Throughout Enron’s humble beginnings it generally centred in the delivery of gas to utilities or businesses at market price. When the deregulation of the business markets emerged Enron’s role changed, they begun to act as energy brokers. Enron entered into contracts with the sellers (natural gas wholesaler) and signed the contract with the buyers (gas utility distributors). Enron then transitioned from an old-line energy company with pipelines and power plants, to a high tech global enterprise that traded energy contracts like commodities, launched into new industries like broadband communications, and oversaw a multi-billion-dollar international investment portfolio. Enron’s key corporate achievements during the 1990s was creation of an online energy trading business that bought and sold contracts to deliver energy products like natural gas, oil or electricity. It operated in over 40 countries and areas such as Europe, South America, Australia basing its main operations in the United States. Enron was only competing with a few major players in the recently deregulated industry and begun to design...
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...The Economics of Amartya Sen “Social Choice and Welfare Economics” (NPWES, 2008) And as related to Philippine Economy: National Budget Cycle In Partial Fulfillment of the Requirements for the Degree Bachelor of Science in Hotel and Restaurant By: Binalingbing, Jhan Ray N. February 2014 INTRODUCTION “…a budget is a useful tool to help ensure that what limited money is available will be spent for the family’s most important needs, like food, clothing and shelter.” -Florencio Abad Secretary, Department of Budget and Management Every household knows that their budget is indispensable, important and has the capability to turn and mobilize their life around. Every day, millions of Filipinos work just for a meager share to eat, drink, and live, and tomorrow, work again to live for a day. Yet reality, tells us that many still suffer and live in difficult conditions. The National Statistics Coordination Board (NCSB) reported that in 2012, 4.2 million Filipino families experienced or lived in poverty or that is 19.2% percent. The same report also stated that a family of five needed a budget of PhP 5,513 to meet basic food needs every month and Php 7,890 to stay above the poverty threshold (basic food and non-food needs) every month. Such can be attributed to the inflation rise to 4.1 % from the year 2009-2012. What could have caused this statistic to be constant and rise up even more? Is there lack in financial stewardship and accountability on the part of Filipinos? Or even...
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...Enron Company James Miles September 28, 2014 ENRON COMPANY FRAUD Based on the findings from milestone one, it is clear that Enron Company experienced an accounting fraud resulting in a spectacular bankruptcy. This was brought about by the accounting fraud made by the accounting firm. An accountant may face accounting dilemma of reporting any accounting violation to the financial accounting body of a company. It is an ethical duty for an accountant to report any such violations but also the dilemma arises on whether to report any uncertain mistake in the accounts. In the case of Enron Company the mistake was done by the accounting firm and the involved CEO was Jeff Skilling. According to legal and ethical issues of accounting fraud, government review of company financial records caused by an accounting scandal could cause the company’s rapid decline and can also lead to the layoff of thousands of employees and we can see from the Enron Company that it dropped its shares from $90 to $0.50 which brought loss to employees and a big financial loss to the investors who had saved their money in the Enron Company. From the legal ethical issues, executives and other corporate officers can also face criminal prosecution, leading to heavy fines and prison time as seen from the case where the scandal resulted in penalty of CEO Jeff Skilling. Jeff Skilling was sent to prison for 24 years for engaging in accounting fraud for the financial collapse of the company. Arthur was not charged...
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...Week 1 Trevor Castleman Bethel University MOD450 Prof. Huss 1/22/15 Enron 1) It is in no way possible to reconcile Kenneth Lay’s statements in regards to Enron’s values and visions with the actual practices of Enron. Executive from the company used the company profits as personal funds. (p.11) It is impossible for Lay to truly believe that the company was in ethical operation as he was aware that Enron was using monumental amounts of credit to keep the company looking profitable.(P.11) Lay should have withheld legal operation and not allowed the company to be used as a person asset by corporate executives. 2) The way bonus’ are structured speak in great volume about a company when set up unethically. The way Enron’s bonus’ were structured so that employees were more concerned with the stock price than the state of the business. To the point that a dropping stock price was so unacceptable that employees were willing to lie, cheat, and steal to keep it on the rise. This meant defrauding investors and eventually collapsing a once profitable and respectable company. This system of a bonus is very corrupting. 3) Technical compliance with the law and ethical obligation are two completely different topics. When looking at the law it never seems to fail that there is some sort of loop hole. It is possible to completely comply with the law yet mislead and lose complete trust of stockholders due to failing to act ethically.(P.11-12) It is not only unacceptable...
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...Enron Summary In the documentary Enron: The Smartest Guys in the Room, we get an in-depth look into how greed and the lust for power led to the rise and ultimate downfall of Enron. Starting in 1985 as a merger of two oil companies, Enron experienced astronomical growth behind the leadership of its CEO, Ken Lay, and executives Jeff Skilling and Andy Fastow. However, this growth did not come from hard work alone, as the film details some of the underhanded tactics used by Enron to become one of the largest companies in America. Lay, Skilling, and Fastow created an environment where all that mattered was the bottom line, meaning that anything was in the realm of possibility (no matter how despicable) as long as it brought hefty returns for the company. There were many lessons to be learned from Enron. First off, we learn a great deal about the psyche, and how certain primal urges can cause us humans to do things that would at first glance seem appalling. Also, the importance of company culture and corporate ethics is revealed throughout this film. There was a great deal of negative energy permeating throughout Enron that made it nearly impossible for them to sustain their upward trajectory. By no means should Enron’s leadership be let off the hook for what they did, but it is important to understand what motivated them to act in such a way. Early in the film, we get a little background information on the company’s leaders. Lay grew up in poverty and learned the value of hard...
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...investors bereft. Enron Corporation was an American energy company based in Houston Texas. It was one of the leading energy companies in United States and was repeatedly named as “America’s most innovative company”. Enron was found to have used various accounting methods to misrepresent its financials. The company’s fraudulent activities brought a number of changes in the business of United States. The movie begins with a lady describing the company as one filled with arrogance, intolerance and greed which led to a gigantic fraud. Within no matter of time, the company was bankrupt. The top executives made millions by cooking the books and hiding all the materialistic information from the customers. The key players in the scandal were Chairman Kenneth Lay, CEO Jeff Skilling and CFO Andrew Fastow. Enron being the major corporate contributor for the George W. Bush election campaign stressed on deregulating the energy market. Ken Lay along with few Texas based oil companies shared a common view that deregulation is the key for success. In the early stage, traders of Enron were involved in speculating the prices of oil. While such speculations were risky, Enron seemed to own a winning streak during the initial stage. Top Executives had offshore personal accounts and transferred millions of dollars in profits. Few employees tried to warn Ken Lay about the illicit trading his traders were involved in but ken Lay discouraged them by informing that speculation was the only part of business making...
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...Oliver Parker's Adaptation of 'Othello' - Review Since watching Oliver Parker’s adaptation of ‘Othello’, I have decided to give you my view on Parker’s take on the original play, which I found somewhat disappointing. The film was left shortened and many parts of the original play were omitted, which I think makes it hard for your typical, everyday person to understand. It may be much easier for purist Shakespeare followers to understand, but if you do not know the ins and outs of the book, then getting a grasp on Parker’s adaptation may be confusing, and therefore less enjoyable. Ultimately, I think this was the outcome – less enjoyable, than the original play, for the most of us. I disagree with Jenessa Casey's online review and many of the points that she raised. She claims that Oliver Parker ‘cut many parts of the play's scenes to shorten the film while adding a few to provide a more cinematic and box office-oriented production’. Although this may have been the desired effect, I do not feel that it has truly worked. Instead of making it a better box office production, it actually made it difficult to follow because of all the key, interlinking dialogue that was missed. This can easily sway our opinion on the characters themselves, and after watching the film, it made me view many of the characters very differently because of the way Parker had portrayed them. A vital part which was missed out was the exchange of words between Othello and Desdemona (Act 3 Scene 3). In the...
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