Business Ethics : Enron Scandal

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Business ethics have been the central concern of all corporations in operating business. Enron scandal was the highlighted case representing the dramatic violation of business ethics with the involvement of misusing power to conduct unethical missteps to gain self-interest, resulting in a collapse of the whole organization. This report is aimed at assessing Enron case to provide better understanding of its rise and fall through the background of the company’s formation and bankruptcy as well as applying few of ethical approaches to seek some possible alternative outcomes such as utilitarian, expectation and choice. II. Body a. Background: Enron was found in 1985 as the result of between Houston Natural Gas and Inter North Pipeline…show more content…
Moreover, Enron used invasive approach to archive $27 billion in one quarter as biggest energy wholesaler and boosted Enron share value up to $90 in 2000 that attracted attentions of investors to purchase more. However, misleading information and other financial practices on online system caused several collapse in 2001 that led Enron share value felt down under $1 and bankrupt after that (The New York Times, 2001). b. Utility test Although Enron has their own code of ethics, which listed out their policies highly focusing on honesty, respectfulness, and generation of the benefit for stakeholders as a whole, Enron management actions were only complied with a certain level of ethics philosophy that led to poor approaches to handle behavioral and moral circumstances (Paine 1994; Petrick and Quinn 2000). According to utilitarian theories with solely concentrating on “social consequences” - generating the best outcomes for affected people as a whole, Enron’s executive actions were recognized as being unethical because they failed to yield the greatest benefit of all other stakeholders while playing the critical role of a linkage between employees, shareholders, suppliers and customers (Petrick and Scherer, 2003). Particularly, their top management focused on their own interests that derived from other’s expenses by feeding hunger with greediness, bribing government under political donation and making series of unethical actions that caused the uncured
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