Describe The Organizing Ethical Values At Enron

Before going into an analysis on the organizational culture at Enron, I will first elaborate on the severity of the unethical behavior that existed at Enron. The problem can best be shown in the words of an Enron employee who said “If I’m going to my boss’s office to talk about compensation, and if I step on some guy’s throat and that doubles it, then I’ll stomp on that guy’s throat”(Enron: The Smartest Guys in the Room). This culture of greed and corruption can also be seen through Enron’s mark to market accounting system, in which Enron cashed in on ideas and “future profits” without actually making anything. Furthermore,

Exploring Enron as it goes from infancy to final explosion, is a valuable mechanism for understanding, how not to organize and manage a company properly. Lay and especially Skilling, were very powerful and persuasive orators. Their charisma radiated out to the employees who followed their leadership with blind obedience. This facilitated a work culture and environment that was toxic, and infectious to everyone involved. It limited any staff diversification internally and fostered a severely overt masculine culture that lead to its downfall eventually.

As with much of Enron, their outward appearance did not match what was really going on inside the company. Enron ended up cultivating their own demise for bankruptcy by how they ran their company. This corrupt corporate culture was a place whose employees threw ethical responsibility to the wind if it meant financial gain. At Enron, the employees were motivated by a very “cut-throat” culture. If an employee didn’t perform well enough, they would simply be replaced by someone who could. “The company’s culture had profound effects on the ethics of its employees” (Sims, pg.243). Like a parent to their children, when the executives of a company pursue unethical financial means, it sets a certain tone for their employees and even the market of the company. As mentioned before, Enron had a very “cut-throat” attitude in regards to their employees. This also became one Enron’s main ethical falling points. According to the class text, “employees were rated every six months, with those ranked in the bottom 20 percent forced to leave” (Ferrell, 2017, pg. 287). This system which pits employees against each other rather than having them work together will create a workplace of dishonesty and a recipe of disaster for the company. This coupled with the objective of financial growth, creates a very dim opportunity for any ethical culture. “The entire cultural framework of Enron not only allowed unethical behavior to flourish,

According to the documentation, those Enron people who faced ethical issues used different prescriptive reasoning approach to resolve their dilemma. Take Andrew Fastow as an example, he might not start all the fraudulent financial activities in the first place; however, he decided to do so in order to please the boss, when Ken Lay wanted to see neat financial disclosures. It seemed that Fastow

Q1: Analyse the corporate culture at Enron and its management’s behaviour. Include in your analysis, the normative theory of ethics which you would consider most relevant in driving the decision making at Enron.

Chapter discussed Organizational Justice, Ethics, and Social Responsibility. While watching CNBC on television, I viewed a documentary on the energy company Enron. Their practices and ethics, or lack thereof are an excellent example of the topics contained in this chapter. Their disregard for ethical behavior and social responsibility, ultimately led to the demise of the company and also caused several members of the company in management positions to be brought to justice in the court systems. Enron was a energy company that was seemingly very profitable, ethical, and successful, as was reflected in their stock price. However, there was a great deal of information withheld from

Exploring Enron as it goes from infancy to final explosion, is a valuable mechanism for

Question 1 Summarize 1 one page how you would explain Enron’s ethical meltdown: Enron was an energy company founded by Kenneth Lay in 1985 through a merger of vast networks of natural gas lines. Enron specialized in wholesale, natural gas, and electricity, and made its money as a wholesaler between suppliers and customers rather than actually owning any. Enron in fact didn’t own any assets, which made their accounting procedures very unusual. The lack of accounting transparency at Enron allowed the company’s managers to make Enron’s financial performance better than it actually was. The organizational culture at Enron was to blame for it’s ethical meltdown. Enron’s accounting scheme slowly began to erode its ethical practices, which soon led the culture of Enron to become a more aggressive and misleading business practice. Enron reported profits from joint partnerships that were not yet attained in order to keep stock prices up (or make wall street happy). As this was happening employees began to notice the ethics in senior management (leadership) deteriorating, and soon after they to would follow in their footsteps. Senior management thought they were saving their company from financial ruin and though lying was ok if it meant saving the company. Investors would surely sell their stocks if they really knew the situation the

The winners have been consumers, who have paid lower prices, and investors, who have seen competition force the power suppliers to become much more efficient…. Under the old regulated model of delivering gas and electricity, customers were offered a one-size-fits-all contract…. Enron pioneered contracts that could be tailored to the exact needs of the customer. To do this, Enron unbundled the classic power contract into its constituent parts, starting with price and volume, location, time, etc., and offered customers choices on each one. Again, consumers won. Enron's investors did too, because Enron earned the surplus typically reaped by inventors. Arguably, Enron is the embodiment of what economist Joseph Schumpeter called the "process of Creative Destruction." But creative destroyers are not necessarily likable, pleasant folks, which may be part of Enron's problem today. (Bodily and Bruner, 2001)

This paper will discuss the business failure of one of the largest energy companies in the world, Enron Corporation. I will discuss the leadership, management, and organizational structure of the company and how this failure could have been prevented.

The main purpose of this report is to understand the Enron business practices so that it can be analysed that what leadership traits & style were responsible for its failure. Enron was a US company, which was founded in 1986 with the merger of Houston Natural Gas & Internorth the two big natural gas pipeline companies. Enron was a huge company that reached to remarkable heights but eventually collapsed due to improper business practises, accounting frauds, and unethical culture with in an organization. Top management of Enron had used their position & power in wrong way resulting bankruptcy of such a huge company in 2001. This report will examine the internal culture of the organisation as well as the leadership practices of its top management. Further in this report I will be explaining the disaster happened at Enron by trait & transformation leadership theory and ethical theory that have been identified as the appropriate analytical tool for examining Enron culture. At the end this report shows how the Kenneth Lay and Jeffery Skilling led to the downfall of Enron also provide some recommendations and

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

Ethics is something that is very important to have especially in the business world. Ethics is the unwritten laws or rules defined by human nature; ethics is something people encounter as a child learning the differences between right and wrong. In 2001, Enron was the fifth largest company on the Fortune 500. Enron was also the market leader in energy production, distribution, and trading. However, Enron's unethical accounting practices have left the company in joint chapter 11 bankruptcy. This bankruptcy has caused many problems among many individuals. Enron's employees and retirees are suffering because of the bankruptcy. Wall Street and investors have taken a major downturn do to the company's unethical practices. Enron's competitors

The collapse of Enron and all of the questions that arise to try and explain how this company failed, it all comes back to the values of management. The last option on our training plan will provide training in ethics. Enron executives and employees were caught in the desire to report ever-increasing earnings in order to keep stock prices rising, and to protect their jobs and wealth in their retirement plans (,2002).

Enron’s code of ethics prided itself on four key values; respect, integrity, communication, and excellence. Codes of ethics should be a reflection of what the owners, investors, and employees work towards as an organization. Executives overlooked those values as they deliberately corrupted Enron by engaging in