The Misguided Ethics of Enron

Essay by kraftonUniversity, Bachelor'sA+, May 2005

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Business ethics is the difference between right and wrong in the business realm. The purpose of ethics is to recognize how a situation will be looked at, and resolving them before they become legal problems. Building a business means facing all kinds of ethical decisions. Should you skip a creditor's bill to pay your employees in a cash flow crisis? Help an employee with a problem that is affecting their performance at work? Stretch the truth to win an important client or broker a big deal? There are rarely clear-cut answers, and following your conscience can often have unfavorable consequences for your business. One of the best ways to deal with the complex decisions you make is to learn from those who have been there before you. One of the best, and most recent examples of this is the demise of Enron.

Enron, formerly the seventh wealthiest corporation in America, was once considered to be the company of the future.

Enron hired the best and brightest employees, and prided themselves on being a leading force into new markets, always wanting to be first. Upon being hired at Enron, a document was required to be signed stating that you read und understood the companies code of ethics. This was a 64 page document in 2000. The forward has a memo from Ken Lay (July 2000, page 2) which states:

As officers and employees of Enron Corp., its subsidiaries, and its affiliated companies, we are responsible for conducting the business affairs of companies in accordance with all applicable laws and in a moral and honest manner.

To be sure that we understand what is expected of us, Enron has adopted certain policies, with the approval of the Board of Directors, which are set forth in this booklet. I ask that you...

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