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Business Ethics Enron case - Essay Example

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An Expired Meat Looks so Nice Big companies attract a lot of public attention. It means more people would want to invest because the company is so successfull. But no matter how big the company, it will still go bankrupt if they have commited unethical business practice just to achieve their successs…
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Business Ethics Enron case
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"Business Ethics Enron case"

Download file to see previous pages It has dominated the business world in many divisions such as; natural resources, plastics, power, steel, broadband and principal investments. The men who were responsible of Enron’s demise were Kenneth Lay, Jeffrey Skilling, and Andrew Fastow. According to the Permanent Subcommittee on Investigations of the Committee on Governmental Affairs Enron commited high risk accounting, and disclose too many information about their cashflow. They hid their loss to attract investors for them to keep investing in the company. No one in the company reveal the truth until the social analyst starts to do some research because some of its data just do not make sense and found out the fraud that Enron had been committing. The company can had been falsely registering profit with its value increasing at a dizzying figure of 10 billion to 65 billion. But these unfounded profits have its price as it adversely affected the lives of those who invested in the company because they never got their money back. The fraudulent and unethical business practice of Enron can be traced back to its leadership. Leadership at Enron took a twisted turn when it became obsessed with increasing the value of its stock prices. Its sense of excellence also became crooked as reinforced and perpetuated by its leadership. It promoted a corporate culture of callousness when it arbitrarily ranked half of its employees as non-performer which it will eventually fire. The other half remaining may have remained in the company but adopted a corporate value system that is virulently greedy and fraudulent as promoted and reinforced by its leadership through its performance appraisals. The culture of a company is one of the basic aspect of an organization and often, its behaviors are often based on that corporate culture. At Enron, the company culture has a structure where they place the individuals who have a higher position at the upper level of the office, and ordinary workers who have less power in the company occupy the ground level of the office. This company structure reflects that people who can better adapt with Enron’s unethical business practice will control most of the activites, and create a decision and others who cannot will be relegated as subordinates. This culture of giving too much power on people who are unethical promotes the culture of fraud in th eorganization where greed is encouraged and money became the central value of the organization that they no longer care about the environment as long they gain money. As a company Enron does not have positive control environment “ the tone or culture of a firm the control environemnt sets the tone of organization, influencing its people”. (Hartman and Desjardin Pg. 539). In my point of view the negative control environment that Enron company sets it is to make their workers adapt with the situation of the company that they work 12 hours per day only thinking of how to make a billion profit to the company by doing fraudulent on the stakesholder. This practice alone of inducing employees to work all day long and forgo other aspects of their lives such as family and social lives is not healthy. Duty care does not also exist in its organizational structure. Kenneth Lay, Jeffrey Skilling, and Andrew Fastow does not apply the duty of care aspect to on their decision. “Duty of care involves the exercise of reasonalble care by board member... their management responsibilities and comply with the law” ...Download file to see next pagesRead More
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