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Ethics and Corporate Social Responsibility a Case Analysis of Enron - Essay Example

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Ethics and Corporate Social Responsibility a Case Analysis of Enron Abstract This paper examines the Enron Case. The paper focuses on some important elements and aspects that led to the corporate collapse of the energy giant in the early 21st Century. From the case study, there are some elements of corporate social responsibility, governance and other matters that led to the eventual collapse of Enron…
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Ethics and Corporate Social Responsibility a Case Analysis of Enron
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Download file to see previous pages 2. An evaluation of the potential role of corporate social responsibility in saving Enron in line with the criticisms of CSR by Friedman and Barry. 3. An assessment of whether Enron should have favoured some stakeholders ahead of others or not. 4. An evaluation of whether codes of conducts and stated core values have an effect on a business or not. Question 1 The Role of the CEO in the Enron Scandal This portion of the research examines whether Enron chief, Kenneth Lay acted immorally or not. In order to examine the issue well, the paper would use a broad range of assessment of morality to identify whether actions of Lay were appropriate or not. Each of these issues would be examined critically. Dominant and Unfettered Power and Control It is apparent that Kenneth Lay had dominant and unfettered powers and control over activities of Enron. This is because he had stayed in power for a very long time and had a lot of control in decision making. Although this in itself is not immoral, it created the impetus for a lot of immoral and amoral activities to be carried out by Lay in conjunction with his fellow managers and directors. Ideally, a business needs to have some kind of control and checks to ensure that managers do not abuse the system (Crawford, 2006 p114). This reason justifies the need for the establishment of an Independent Board of Directors and a Management team. Again, the board needs to be headed by a person who is different from the CEO in order to create an ideal situation where no one in the top hierarchy can get uncontrolled power over the activities of the company. In the case of Kenneth Lay, he was the CEO and the Chairman of the Board of Enron for 17 years and had unfettered powers which contributed to a lot of wrongs in the company. Disregard for Core Principles Kenneth Lay stated that the core principles of Enron were communication, respect, integrity, and excellence. However, there is strong evidence that he led the company to override the very standards he set and the system that was meant to safeguard the implementation of those standards. George and Jones identify that overriding standards and principles means disregard of rules and regulations for reasons that are not consistent with the best interest of the business (2009). As such, there is evidence that Kenneth Lay did things that undermined the core guiding principles that he set for Enron. First of all, he claimed that communication was key. However, there were major reporting issues in Enron that led to its collapse. Secondly, he claimed that respect was a key principle. However, it is apparent that some stakeholder groups like employees were given tough treatments and their rights were blatantly disregarded. Thirdly, Enron claimed to seek integrity but in reality, they had serious issues with truthfulness and the attempt to disguise the reality in its financial situation to maintain a positive image with the public and other stakeholders. Finally, Enron stated that they sought excellence. Although they might have been a leading business at some point in their history, they used unsustainable systems and structures to attain this end. This led to major long term issues which culminated in the collapse of the company. Since Kenneth Lay had extensive powers to ensure that the core principles that he had outlined would be honoured and he failed to do so, there is a major ...Download file to see next pagesRead More
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