Whistle-Blowing: Enron Essay

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Whistle blowing is an act to disclose an organizational wrongdoing to parties that can take action. Sherron Watkins was the vice president of Enron Corporation that became a whistle blower in 2001. She sent an anonymous memo to Enron Chairman Kenneth Lay regarding the misstatements on the financial report. Enron hired lawyers from Vinson & Elkins to do an investigation on the financial misstatement allegations (Ackman, 2002). According to the memo from the investigations, after Watkins identified herself Lay held a meeting with her to discuss about her concerns regarding her allegations. The memo failed to indicate what Lay told Watkins. The investigation from Vinson & Elkins concluded that the questionable transaction that Watkins was…show more content…
Whistle Blowing Policy According to Ravishankar (2003), it is better to address an employee’s concern when it is still minor before it became public and causes much damage to the company. It is beneficial for companies to create an organizational culture that encourages early reporting by employees to the attention of their superiors by “internal whistleblowers”. Companies can introduce whistle blowing policy to their employees to encourage them to voice out if they have legitimate concerns about wrongdoings. Also, company can create a code of conduct to set rules for employees to make reference to laws, rules, regulation and directives applying to that company. The code helps employees to know about their obligations to the company and to their colleagues. Advantages of Whistle Blowing Policy A lot of times, employees that found out about a violation of internal rules or external laws are too afraid to speak out because they are fearful about losing their job. The application of whistle blowing policy assures the employees that they will not be subject to reprisal as long as their concerns are legitimate. By speaking up once the problem is spotted, superiors became aware about the early warnings and the concerns are more likely to be addressed internally. This reduces the risk of having external regulators to be
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