Enron Scandal And Its Ethical Implications

1744 Words Oct 12th, 2015 7 Pages
Enron Scandal and Its Ethical Implications
Introduction
Enron’s collapse in 2002 was perhaps the most shocking and widely publicized ethical violations of all times. Once one of the world’s largest energy company, Enron’s downfall and the demise of its accounting firm Arthur Andersen, highlight corporate America’s moral failings. Enron was charged with substantial accounting frauds by manipulating its major accounts and by masking its massive debts. The company stock that once peaked at $90 was down below a dollar by the end of 2001, costing $200 billion dollars of investor money. A company with humble beginnings, Enron in its heydays was heralded as the epitome of corporate responsibility and ethics. This case study examines the ethical issues surrounding the Enron scandal and attempts to explore the reasons behind Enron’s ethical and economic failure.
Background
Enron was founded in 1985, shortly after the de-regulation of natural gas industry in the US. Enron’s growth was phenomenal and it became one of the leading companies in the power industry. The newly deregulated industry opened many doors for Enron and the company started to diversify and expand internationally. As the company grew, its culture evolved, Enron embraced a culture where employees were expected to take advantage of the newly open playing field to the most.
Enron executives were rewarded through large pay packages for their ‘cleverness’ in building a company with sustainable returns. The company’s…

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