Relationship Between Ethics And Business Performance

Decent Essays
Although the relationship between ethics and business performance is still the subject of controversy, the Enron case is a demonstration that the lack of ethical behavior is inseparable from the competitive disadvantage. The question is not so much whether the disaster could be avoided if the company had adopted from the beginning, transparency criteria. The main thing to know as citizens, so far reputed and honest, have managed to create an environment to bring their managers to take ethically reprehensible and economically untenable positions.
“Business ethical values vary by company, and are defined largely by the behaviors and values that govern a business environment. In general, business ethical values are a set of guiding principles that encourage individuals in an organization to make decisions based on the company’s stated beliefs and attitudes toward business practices within its industry.”(1)
Enron was known for the cultivation of strict operations that expanded among its employees. Thus, obtaining results became the main objective and standard of measurement within the company: what mattered above all, were the results; everything else was secondary to this goal. Enron was an energy company, considered a new business model. Its turnover was too big just before the financial scandal that caused his bankruptcy in only 24 days.
The form of performance measurement has to be consistent with the long-term business purposes. Enron focused excessively on market value and
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