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The Enron Corporation Scandal as a Moral Scandal: Examining Enron from an Ethical Perspective - Research Paper Example

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The author examines the Enron Corporation scandal by looking at some ethical principles and theories. By using such frameworks, it is hoped that a deeper analysis of business practices can be arrived at, one that clearly outlines the need for asking pertinent questions about moral conduct…
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The Enron Corporation Scandal as a Moral Scandal: Examining Enron from an Ethical Perspective
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Download file to see previous pages The organizational collapse of the Enron Corporation in 2001 signaled the need for a more pronounced executive awareness of ethical principles in business. Enron was the seventh most successful company in America, valued at almost $7 billion at the time. As the corporation’s operations expanded during the 90s, various questionable practices were initiated by key personnel, ultimately leading to a subsequent investigation and the corporation’s eventual bankruptcy. What lies at the heart of this scandal is an ethical issue, pertaining primarily to what counts as the ethical conduct of business.

The Enron Corporation initiated various corporate means that, at the time, were seen as bold and perhaps even revolutionary. This was especially true when Jeffrey Skilling, former Enron CEO, came on board upon impressing founder and deregulation advocate, Kenneth Lay, with his consultancy capabilities. Prior to the Skilling phase of the company, Enron’s traders had been gambling without restraint using company funds, but with the knowledge of Kenneth Lay. Even with investigations and reports of misappropriation of funds, Lay intimated to traders to further continue generating money for the company. However, as is the nature of “gambling”, luck is bound to change. Enron’s traders soon gambled all of the company’s reserves. Nevertheless, the company survived and went on to employ Skilling. It was Skilling’s idea to utilize mark to market accounting, that is, the use of future projections to book earnings on deals that actually never made anything. This idea essentially opened up the company to unscrupulous practices, paving the way for fraudulent profit reports. Enron was also one of the first companies to form what they called, a Performance Review Committee, whose job it was to ensure that all employees were delivering the results that the company expected from them. This had the effect of pressuring employees to perform well but had the unsavory consequence of pushing employees to adopt and utilize “less than ethical” conduct. ...Download file to see next pagesRead More
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