Thesis on Enron Ethical Issues Assignment The Congressional Research Service of the United States Congress published a report for members of Congress looking in to the Enron failure (Jickling, 2002) in February 2002, which offered "An Overview of Financial Issues" relative to the Enron … Enron: What Caused the Ethical Collapse ...Case 1 ENRON: WHAT CAUSED THE ETHICAL COLLAPSE? In addition, society’s fixation on short term profits and daily market moves also increased the pressure to manipulate results and to hide financial bad news. They overlook the fact that the same qualities and strategies so often praised in business and other leadership literature can lead to disaster. They manipulated information while engaging in inconsistent treatment of internal and external constituencies. Leaders cannot articulate the concerns of followers unless they first understand their needs (Kanungo & Mendoca, 1996). Gruley, B., & Smith, R. (2002, April 26). The Enron collapse had a huge effect on present accounting regulations and rules. Enron's heyday has long ended. Enron officials put their loyalty to themselves above those of everyone else with a stake in the company’s fate — stock holders, business partners, rate payers, local communities, foreign governments, and so on. Driven by a concern for people, they seek to treat others fairly and recognize that they hold their positions in stewardship for others. On the issue of character, I agree with Dennis that the Enron debacle seems to be character-based. reports, hidden losses and other tactics were all designed to keep the stock price artificially high. However, when the firm’s stock price began to slide, the company was unable to back its guarantees. The paper describes the political, historical, and economic conditions that led to Enron’s rise and fall from a variety of leadership and ethical perspectives. Thousand Oaks, CA: Sage. Report: Enron board aided collapse. general populace were not wary about the validity of these statements. from the company, which resulted in the bankruptcy of the company. The company’s leaders did many things right according to the leadership and management literature. Enron hurt the lives of many people, and a company based on the principles of Enron is a company with no moral conduct at all (Wxiaom,2012). Excess typified top management at Enron. Academy of Management Journal 42, 539-552. An ENRON Scandal Summary of the acts of Embezzlement undertaken by ENRON Executives may be defined as the criminal activity involving the unlawful and unethical attainment of monies and funding by employees; typically, funds that are embezzled are intended for Leaders seeking self-benefit focus on personal achievements, and control followers through coercion and reward. As college graduates, Enron managers undoubtedly enrolled in leadership and ethics courses. These SPEs , backed by Enron stock and illegally run by company insiders, were designed to keep debt off the firm’s balance sheets and helped prop up its share price. Enron’s relationships with both employees and outsiders were marked by gross inconsistencies. billion; this total is considered to be a result of misappropriated Ethics is concerned with the kinds of values and morals an individual or a society finds desirable or appropriate. In addition to charges related to shady partnerships, Enron stands accused of: Much of the blame for what happened at Enron (nicknamed the “Crooked E” for its tilted Capital E logo) can be laid at the feet of company founder Kenneth Lay, his successor Jeffrey Skilling, chief financial officer Andrew Fastow, and Fastow’s top assistant Michael Kopper. attracted new investors desiring the enjoy the apparent financial gains enjoyed 2. 6). Reebok scam 2012 fraud Karan Kukreja. Mr. Kenneth Lay was the CEO and chairperson of the company, he hold a Ph.D. in Economics. Elliott, A. L, & Schroth, R. J. Ethical Issues in Today’s Business World. http://specials.ft.com/enron/FT3648VA9XC.html. Corporate ethics: Right makes might. investments while reporting fraudulent earnings to those investors; this not Average workers were forced to vest their retirement plans in Enron stock and then, during the crucial period when the stock was in free fall, were blocked from selling their shares. Workers enjoyed such benefits as lavish Christmas parties, aerobic classes, free taxi rides, refreshments, and the services of a concierge (Enron excess, 2002; How Enron let down its employees, 2002). A1, A5. Greenleaf, R. (1977). Unfortunately, the teaching of ethics, like the practice of ethics at Enron, is typically decoupled from the rest of the curriculum. case summary | Kenneth Lay, former chairman and chief executive officer (CEO) of Enron Corp., claimed to be a moral and ethical leader and exhorted Enron’s officers and employees to be highly ethical in their decisions and actions. undertaken within a setting in which its participants retain advanced education (2002, August 7). Term Paper on Ethical Issues of the Enron Case Assignment Partnerships can be an easy and effective way to raise money. The sense of betrayal experienced by Enron employees only added to the pain of losing their jobs and retirement savings. 201-211). Enron scandal, series of events that resulted in the bankruptcy of the U.S. energy, commodities, and services company Enron Corporation and the dissolution of Arthur Andersen LLP, which had been one of the largest auditing and accounting companies in the world. However, Rest, J. R. (1993). Ethical motives are the codification of moral judgement. Bryce, R., (2002). The Enron scandal involves both illegal and unethical activity and the courts of law will. The destructive power of individual greed and pride was magnified by Enron’s corporate culture that encouraged creativity and risk taking. Fraud Cases in Auditing Raymond Kulzick. (pp. Apparently no member of the firm had the courage to bring the misbehavior of Lay and his subordinates to the attention of the public before the crisis erupted (Cruver, 2002). Enron Company. The Oregonian, pp. Each failed to meet important ethical challenges or dilemmas of leadership (Johnson, 2001). Legal Issue in Business: The Case of Enron Legal Issue in Business: The Case of Enron Introduction Business ethics is based on normative ethics , standards that ethics are upheld and applied specific to distinguish what is right or wrong, that is to say what should be done or who should not be fact. Additionally, the Financial Accounting Standards Board (FASB) substantially raised its levels of ethical conduct. Servant leaders continually ask themselves what would be best for their constituents and measure their success by the progress of their followers. completely understand. What Enron’s top leaders, lower level managers, and front line employees learned in university classrooms was not enough to prevent ethical tragedy. Five-hundred officials received “retention bonuses” totaling $55 million at the same time laid off workers received only a fraction of the severance pay they had been promised (Barreveld, 2002). Enron scandal, series of events that resulted in the bankruptcy of the U.S. energy, commodities, and services company Enron Corporation and the dissolution of Arthur Andersen LLP, which had been one of the largest auditing and accounting companies in the world. Business Week Online. They manipulated information while engaging in inconsistent treatment of internal and external constituencies. Enron Corporation is an energy trading, natural gas, and electric utilities company located in Houston, Texas that had around 21,000 employees by mid-2001, before it went bankrupt. Employees invented a host of new commodity products which earned Enron top ranking six straight years on Fortune magazine’s list of most innovative companies (Fusaro & Miller, 2002). And finally he will discuss concepts that relate to his situations on the job. The recent spate of corporate scandals and the accompanying market crash may be the penalty that society must pay for the excesses and inattention of the last decade. (2002, August 5). More recent instances of corporate corruption should not diminish the importance of Enron as a case study in moral failure. 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