Ethics

Ethics

Being socially responsible , ethical , and a good corporate citizen is important to meeting and exceeding the expectations of any organization 's stakeholders . Unless today 's organizations recognize the importance of developing and sustaining a reputation that is built on doing the right things ' and doing things right ' as viewed by their key stakeholders , they will not survive or thrive , as has been the case with Enron . The issues surrounding business ethics , corporate social responsibility , and stakeholder management are treated at various points in this work . Special treatment is given to

related organizational missteps at Enron to gain insight into why such social irresponsible and unethical behavior occurs . Workplace issues like employee rights are considered important s in our efforts to make sense of organizational missteps . This work suggests that organizations like Enron take ethical falls because of failed leadership , an unethically oriented culture , socially irresponsible behavior and operational activities that lead to unethical employee practices . Then the considers how Enron should have conducted business in to be ethical and not face problems

Enron , one of the seven largest American corporations , is about to earn the dubious distinction of being the largest bankruptcy in business history . Despite the formation of Enron in 1985 from the union of Houston Natural Gas and Omaha-based InterNorth , its true culture did not actually emerge until 1988 , when it went from a stodgy but safe gas pipeline company ' to the World 's Leading Company ' capitalizing on the deregulation of both gas and energy and pioneering the swapping of natural gas (CNN .com . The new culture at Enron , headed by founder Lay started out as a culture of challenge and confrontation . When Skilling and Fastow joined the company in 1990 , the culture quickly evolved into one of arrogance , aggressiveness , greed , cockiness , secretiveness , and ruthlessness

The culture at Enron was , unsurprisingly , all about money . To determine why managers act in a given way and their real interests and agendas common Enron wisdom was to first study their compensation deal . Top executives ' remuneration packages were directly tied to performance . For example , they benefited greatly when Enron 's book value skyrocketed as a result of the SEC approval of the market-to-market accounting scheme

Enron 's board twice waived the company 's code of ethics to allow top executives to operate in areas of conflicting interest . It could have asked tough questions , but it did not . Board members later said they were misled by Enron executives . The board set up an elaborate monitoring system , but board members put little energy into it repeatedly failing to ask pointed questions , a Senate subcommittee later concluded . Enron 's top executives were also supposed to be corporate watchdogs , but they personally profited from the corporate malfeasance Even secretaries became millionaires . Many had fancy cars and mansions in high-class neighborhoods . The Enron people were living the good life , and pretty much everyone went along

Enron 's slide toward scandal and bankruptcy exposed the failure of watchdogs at every level . Its board...