The Ethics of Enron: A Corporate Disaster Racheal D. Smith Salem International University The Ethics of Enron: A Corporate Disaster Ethics, as stated by Dawn D. Bennett-Alexander and Linda F. Harrison in The Legal, Ethical & Regulatory Environment of Business in a Diverse Society, are considered subjective laws as well as a how-to-guide for businesses in how they conduct themselves with their suppliers, customers, employees, and anyone else they do business with (2012). It is not enough
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the way they manage all their relationships with shareholders, employees, and the communities they live and work in. Enron went bankrupt and disappeared over 10 years ago but the impact it has made on ethical standards have never faded. Thousands of people lost their retirement savings, and the energy industry was greatly affected by the downfall of Enron. The collapse of Enron is now used in many textbooks and research papers as an example of the importance of an organization’s behaviors an how
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Ethics is the branch of study dealing with what is the proper course of life in human’s life or throughout society. It is the study of right and wrong in human endeavors. It is the value and pursue we categorize. It is regarding do we pursue for self interest or for the greater cause for society. One main culprit for Enron scandal was Arthur Anderson. It had served as Enron’s outside auditor since 1985. Not only did Anderson do external audits it also provided Enron internal auditing and consulting
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Ethics Enron's culture during their heyday encouraged an entrepreneurial spirit along with a “loose tight” management style that has been highlighted in the media and the Darden CD as being part of their success (Darden CD). However, according to Hatcher (2003), Enron had a culture of “anything goes as long as it makes money”. For example, in a thesis written by Boje, Alder, and Black, the authors claim that Enron used theatre to influence how decision makers accurately or inaccurately interpreted
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Summary Enron Corporation is an energy trading, natural gas, and electric utilities company based in Houston, Texas. Formed in 1931, it was originally known as Northern Natural Gas Company. In 1985, Enron was formed by Kenneth Lay after the merger of Houston natural Gas Company and Inter North (Nebraska Pipeline Company). Fortune magazine named Enron “America’s most innovative company for 6 consecutive years. But all that came crashing down in a very bad scandal better known as the Enron Scandal
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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
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MGT320 Portfolio Project Post-Enron Era Ethics The time for change is now! CEO’s must continue to be held accountable for the accuracy of their financial statements, and the performance of their company. To assure the accuracy of a publicly traded company’s financial status reporting, an additional requirement of an outside industry experienced auditing firm is needed, as well as performance based pay contracts for publically traded companies’ officers. The goal is simple, change the mindset
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leadership of Enron and its Board of Directors is a virtual how to on how unethical decisions can and will eventually bring a company to the brink of collapse. The short term rewards of unethical activity can be quickly overcome by the destructive force of investigations and market swings. How greed and lack of oversight can cause the disruption of the livelihoods of employees not directly involved with the unethical behavior. We will examine the events leading up to the bankruptcy of Enron as well
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The ethical analysis can be conducted with the full understanding of what ethics in fact is. Ethics is all about proper behavior and acting for good; therefore, everyone has his/her own idea of what that means. In any case, the comparison of several ethical scandals should be based on the principles of action and the foundation of ethics. Being a large energy provider, Enron had its good and bad sides. Thus, in 2002 Enron announced its bankruptcy what turned out to be one of the biggest issues in
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Case 1 ENRON: WHAT CAUSED THE ETHICAL COLLAPSE? case summary | Kenneth Lay, former chairman and chief executive officer (CEO) of Enron Corp., claimed to be a moral and ethical leader and exhorted Enron’s officers and employees to be highly ethical in their decisions and actions. In addition, the Enron Code of Ethics specified that “An employee shall not conduct himself or herself in a manner which directly or indirectly would be detrimental to the best interests of the Company or in a manner
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