The Collapse Of Enron Corporation

The Collapse of Enron Company Essay

What result in the eventual collapse of Enron under Lay and Skilling?

The collapse of Enron can mainly be explained by the entire disregard of ethical principles that companies should follow. In particular, Kenneth Lay and Jeffrey Skilling neglected their responsibilities to the main stakeholders of Enron, especially, stockholders, employees, and the community, in general. This lack of accountability and integrity resulted in the recklessness of the senior executives and their failure to address the inefficiencies of the business (Gibney. 2005).

This is actually the main factor that needs to be considered. Furthermore, the administration disregarded such problems as organizational performance totally, productivity, or competiveness. Rather, they thought we would focus just on short-term gains. Therefore, this corporation didn’t have a well-developed technique. This issue is essential for explaining the downfall of the corporation also.

How did the very best leadership at Enron undermine the foundational ideals of the Enron Program code of Ethics?

The leaders of Enron undermined the organizational program code of ethics in a number of ways. Of all First, they presented false details to the investors to be able to increase their personal revenue (Gore & Guruprased, 2011, p. 6). Moreover, the business created artificial strength cuts to be able to raise the price of energy (Gibney, 2005). In this real way, they endangered the wellbeing of several people surviving in California (Gibney, 2005). Furthermore, you need to note that they didn’t warn other stakeholders about potential risks. Therefore, the management undermined the guidelines that are required for legal reasons and ethics completely. These actions completely contradicted their public rhetoric in accordance with that your welfare of stockholders was the very best priority for the management. So, you can state that their allegations about ethics had been unfounded.

Respect: provided Kenneth Lay’s and jeff skilling’s working beliefs and the Enron Program code of Ethics, what targets regarding ethical choices and activities should Enron’s workers have reasonably?

The behaviour of senior managers must have alerted employees. In particular, they should have seen that the senior executives are not interested in the welfare of various stakeholders. This argument is particularly relevant to people who had some knowledge about the internal operations of this corporation. Additionally, the official code of ethics adopted in this company was not compatible with corporate fraud. Thus, employees should have expected more transparent policies from the company. This is one of the main aspects that can be identified.

How did Enron’s corporate culture promote unethical decisions and actions?

It should be noted that the corporate culture of Enron was characterized by extreme competitiveness. The employees of this company had to demonstrate absolute commitment to the goals set by the management. One can mention the work of the Performance Review Committee that focused on the ability of workers to meet the requirements of managers (Gibney, 2005). The employees could justify their unethical conduct by arguing that it is accepted by organizational leaders.

The movie The Smartest Guys in the Room illustrated numerous situations when employees violated the rules of ethics only because they had to follow the directions of the manager. Unique attention should be paid to the activities of such individuals as Andrew Fastow, who didn’t even take into account the outcomes of the accounting fraud (Gibney, 2005). A lot of Enron supervisors relied on the authority of senior executives and recognized the unscrupulous strategies.

How do the investment banking group donate to the ethical collapse of Enron?

some extent

To, purchase bankers contributed to the ethical collapse of Enron furthermore. To begin with, many financial analysts believed that Enron’s performance was flawless, plus they convinced the Enron executives of these infallibility. Moreover, based on the film The Smartest Guys in The accessible room, a few of the finance institutions helped Enron hide their losses (Gibney, 2005). So, the purchase banking community furthermore played a critical function in this scandal.

Reference List

Gibney, A. (Executive Producer). (2005). Enron: The Smartest Guys in the Room . New York: Magnolia Pictures.

Gore, A., & Guruprased, M. (2011). A Case of Corporate Deceit: The Enron Way . Web.

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