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Enron Ethical Issue

In: Business and Management

Submitted By braveheartwang
Words 1074
Pages 5
September 22, 2014
Ethical Meltdown This case describes one of the biggest corporate collapses due to unethical practices in the history of the United States. Before the ethical meltdown, Enron was the world’s largest wholesaler of natural gas and electricity. In a competitive market, companies are constantly struggling to improve their services or products in order to gain a competitive advantage. The pressure to succeed sometimes allows for companies to forget their morals and participate in unethical practices. “It turned out that the lack of accounting transparency enabled the company’s managers to make Enron’s financial performance look much better than it actually was” (Dessler, 2013, p. 242). As a result, several top executives were convicted of manipulating Enron’s profit statements and investors lost most of their investments in Enron. This is a perfect example of a company that lacks professional ethics and proper management. Enron was able to succeed and become a huge corporation in the United States economy. However, the loss of morality and ethics eventually led to the collapse of the corporation. In order for a company to become successful and maintain their success a proper ethical culture is needed within the organization.
Enron’s Ethical Culture Dessler describes ethics as, “the principles of conduct governing an individual or a group and specifically to the standards you use to decide what your conduct should be” (2013, 240). In order for a company to be successful a code of ethics must be applied to the company’s culture. The behavior of both Enron’s CEO and the employees when an analyst asked about the firm’s suspicious accounting statements is an example of the company’s lack of proper ethical culture. The incident consisted of the CEO describing the analyst using inappropriate language while the employees laughed. There is no proof that...

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