Hasbro Case Study - Ethical Behavior

Prior to the Tyco scandal, the company was one of America's largest conglomerates, with operating revenues of 38 billion dollars and 240,000 employees, worldwide. Tyco Laboratories began operations in 1960, performing experimental work for the U.S. government. The firm went public in 1964 and quickly expanded, mostly by acquisition, to exploit the commercial applications of its work. Dennis Kozlowski joined the company in 1975 as an assistant controller. The company subsequently shifted its focus from growth to profits within its three primary divisions: fire protection, electronics, and packaging. Kozlowski joined Tyco's board in 1987 and became president and chief operating officer two years later. Kozlowski

Enron was an energy trading and communications company located in Houston, Texas. During 1996-2001 Enron was given the name of America’s Most Innovative Company by Fortune magazine as it was the seventh-largest corporation in the US. The problem that led this company to bankruptcy was due to the fact that fraudulent accounting practices took place allowing Enron to overstate their earnings and tuck away their high debt liabilities in order to have a more appealing balance sheet (Forbes.com, 2002). Enron’s accounting team “cooked” the books to every meaning of the word so that their investors would not see anything wrong with the failing organization. This poorly structured company led people to jail time, unemployment, and caused retirement stocks to be dried up. Enron had a social responsibility to its stockholders and rather than being up front and honest about the failing company they hid every financial flaw in order to keep receiving money from its investors. By Enron not keeping a social

Rannazzisi, J. T. (2010). Role of Authorized Agents in Communicating Controlled Substance . Retrieved from http://www.gpo.gov/fdsys/pkg/FR-2010-10-06/html/2010-25136.htm

This now bankrupt company, misappropriated investments, pension funds, stock options and saving plans after deregulation and little oversight by the federal government. However, with deregulation an increasing competitive culture emerged as the CEO Jeffry Skilling motto to his organization was to “do it right, do it now, and do it better” this was the rally cried that pushed ambitious employees to engage in unethical behavior as Enron use deceptive “accounting methods to maintain its investment grade status” (Sims, & Brinkmann, 2003, pp.244-245). As Enron continued to flourish and received accolades from the business community this recognition drove executives to continue the façade of bending ethical guidelines before their public fall from

Earlier in his career, Jim was a controversial figure among investors and financial analysts on Wall Street. They blamed Jim for being too generous towards Costco’s employees and not bringing immediate profit to the shareholders1. But after weathering the recession and retaining a return rate of over 10 percent, Jim Sinegal is now revered on Wall Street. His ideology of building a long-lasting company has been successful. Additionally, during the recession, unlike other CEO’s, Jim implemented policies that prevented lay-offs and, in the process, managed to keep Costco’s balance statement in the black. He used strategies such as establishing a strong identity for their private-label offerings. For example, after the economic meltdown, Kirkland Signatures (Costco’s private label) was able to provide customers with a low cost alternative while maintaining the quality they were accustomed to.

We will look at the Enron Corporation and discuss its application of Corporate Social Responsibility (CSR) or in actuality its irresponsible behavior as related to social responsibility. We will revisit what CSR is and discuss Enron’s philosophy regarding its use and function within the corporation. We will discuss the consequences of Enron’s irresponsible behavior and the far reaching effects it had on society.

Enron was named the most admired company for six years in a row, and it was widely considered one of the best companies to work for by Fortune magazine. Enron shocked the world, and it's stockholders when it was revealed at the end of 2001 that the company’s “reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud”. (Enron, 2011, para. 1) Enron maximized it’s long-run profits for itself, but not within the limits of the law. Enron disregarded it’s social responsibility to it’s stackholders when the company only strive for it’s maximized profits, and didn’t strive

Enron, a once thriving Houston-based energy titan, is now reduced to a cautionary adage among Americans to what massive failure corporate greed could lead to. At its core however Enron’s ethical and moral behavior was sound and seemed to be aligned with industry competitors. In an opening statement to the Enron Code of Ethics issued in July 2000, Lay wrote: “As officers and employees of Enron Corp., its subsidiaries, and its affiliated companies, we are responsible

Widely known as the champion of the energy industry, Enron is suddenly faced with a corporate crisis in the form of a scandal. This scandal involves not only Enron’s accounting practices but also its corporate governance and culture (Lawrence & Weber, 2008). This report will recommend some potential strategies for Enron to move forward from the scandal. To do this, we must incorporate stakeholder theory, which “argues that corporations serve a broad public purpose; to create value for society” (Lawrence & Weber, 2014, p 6.). This means that Enron must take responsibility for the scandal it created and take actions to regain its stakeholders’ confidence. To accomplish this, we will first identify and analyze Enron’s primary

I am proposing that the issues affecting Toyota’s ability to rebuild cannot alone be fixed by remedying the safety and manufacturing issues, but it must also work to rebuild the company’s reputation and rebuild stakeholder trust. As outlined by Stewart (2010), Toyota ended up with a full blown crisis on its hands largely because of the delay and mediocre response from Toyota. These management practices call in to question Toyota’s ethical practices and their commitment to corporate social responsibility (CSR) principles.

Business Industry has witnessed the outcomes of bad moral decisions taken by business leaders. Enron’s story is only one example of corporate scandals and cases of bad moral decisions, which has not only shaken the public trust in corporations, but also affected the bank accounts of investors and employees. Before the bankruptcy of Enron; it was included in one of the fortune 500 companies after its fraudulent accounting case the share went down to $1 (Enron scandal, 2010; PBS, 2002; Godwin, 2006; Godwin, 2008).

It seems like business morals and ethics are being whisked to the side in lieu of the ever growing demand of higher stock prices, rising budget goals and investor profits. Despite the increased regulation of corporations through legislation, such as, Sarbanes-Oxley, some corporations still find themselves struggling to maintain ethics and codes of conduct within the workplace. In reviewing the failings of the Enron Scandal, one can heed the mistakes that both individual and organization malaise, such as, conflicts of interest, lack of true transparency and the sever lack of moral courage from the government, executive board, senior management and others, contributed to the energy giant’s downfall.

The overwhelming facts point to a shady underworld of self-dealing and opportunistic exploitation of the poor and working class, which was until recently, well hidden from the commoner. The executives of WorldCom and Enron provide real world examples of unethical business practices, where the desire to make money for their shareholders transcended into an addiction to greed and self-dealing that were displayed by their, “excessive pay, perks, and golden parachutes”(Carson 392) at the expense of all stakeholders. All is not lost, there are corporations that pride themselves in their sound business model and commitment to ethical business practices. Such companies as Eaton Corporation, and Weyerhaeuser, who according to Ethisphere.com, a business ethics watchdog, are among the “2010 World`s most ethical companies.” (Ethisphere)

Unfortunately, scandals like Enron are not isolated incidents and the last decade has offered Americans a disheartening perspective with comparable scandals like that of WorldCom and Tyco, Sunbeam, Global Crossing and many more. Companies have a concrete responsibility not just to their investors but to society as a whole to have practices which deter corporate greed and looting and which actively and effectively work to prevent such things from happening. This

A multitude of choices made by executives at WorldCom led to the ultimate demise of the company as it was previously known, the employees and their livelihoods’, and the trust of the American people. In a time when corporations fail to set ethical standards and provide transparency to investors, how do we change corporate culture on a national level? By analyzing choices made to improve stock prices and company image that ultimately result in failure-- we can guide