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The Unethical And Illegal Actions Of Enron.

1554 words - 6 pages

On October 21, 2001, one of the largest energy companies in the worldfiled for Chapter 11 bankruptcy after restating their earnings report for the pasttwo calendar years. Enron, the energy conglomerate had to restate its earningsbecause of severely inaccurate book keeping of nine billion dollars.Clearly, the U.S economy had heroic success during the mid to late90's. More specifically, the economy had grown because of the influx of the moderntechnology, extremely low unemployment, and consumers spreading their wealthinto long-term investments via the stock market. Many of those investors enjoyedrapid returns on investments; meanwhile Enron had been deceitfully taken theirinvestors money and lining their personal bank accounts and increasing personalwealth to enormous heights. During this research, it was very clear that thecorporate CEO's and CFO's had in fact reported fictitious earning reports. Thispaper will cover the following: (1) Unethical climate at Enron (2) Definition of Law,its purpose, and the specific illegal activities of the Enron Corporation andassociates. Let us first delve into the meaning of ethics and look at whatexpert in business ethics, Linda Trevino has to say about corporate ethics.In her book, Managing Business Ethics, Linda K. Trevino discussesthe issue of ethics and her definition states, " It is the role of every CEO to ensuresound ethical practices are enforced from the top down. Ethics are behaviors andguidelines for employee's actions. It is a moral guide for conducting and engaging inday-to-day business. In a sense, it is doing what is right. The leaders mustdemonstrate to all employees what ethics is all about in the business environment"(p.189). This statement has lasting implications and is the foundation upon whichmany businesses operate. However, in the aftermath of the recent economic boom,many analysts have suspected unethical practices at some of the world's largestcompanies.According to Barbara Ehrenreich, author of, Nickel and Dime, "OurCorporate CEO's have gone from rocking to reeking in a mere two years. At theheight of the bubble, when they had won distinguished awards--that ofethic and credible "role models" and even "icons", many investors hastened to offertheir life savings via the stock market"(p.3). This statement has plenty of credibility,after Enron, WorldCom, Adelphia, and a few others rebelled against commondecency, and only at the risk of not being caught in unethical situations. Unethicalpractices have surfaced increasingly over the past two years. Many more companieslike the above-mentioned companies have lost tremendous credibility in today'sfinancial market place. Lastly, leaders of these multi-billion dollar company's musttake the leadership role by adhering too ethical practices and its own Codes ofConduct that they issue. The Code of Conduct is an operating procedurethat dictates how each member of the company is to adhere to organizationalstandards. Now that we have an...

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