Enron the smartest guys in the room
1. What is the relationship between ethics and law? Were Enron’s actions illegal?
2. What factors contributed to Enron’s unethical culture? What were the consequences?
3. Did Enron violate Occupational Ethics, Individual Ethics, or Societal Ethics?
4. Whose job was it to step-up, speak out, and take measures to stop the unethical dealings at Enron?
5. What steps can companies take to prevent this problem-to stop its values and norms from becoming so inwardly focused that managers and employees lose sight of their ethical responsibility?
What is Enron? We first have to understand that Enron’s collapse is more than the story of just one company, it is the collapse of a system, a collapse of public trust in management, accounting, auditing, finance and consulting. The collapse of Enron, Sunbeam, Waste management, Tyco, Worldcom, but also International companies like Vivendi were just the results of a significant inconsistency between conflicts of interest and incentive compensations practices. Enron was one of the largest, maybe the largest company to sold gas and electricity and other services such as bandwidth and consulting on risk management and financial services for potential investors. “At the end of 2001 it was revealed that its reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud, known as the “Enron scandal”. Enron since has become a popular symbol of willful corporate Fraud and corruption. The scandal was also considered a landmark case in the field of business fraud and brought into question the accounting practices of many corporations throughout the United States.” (Enron - Wikipedia, the free encyclopedia)
But what is the relationship between ethics and law in this and were Enron’s action illegal? In the 1980’s and after the so-called “Black Monday” on Wall Street, after the Exxon Valdez oil spill in Alaska, or the huge poison gas leak in Bhopal,