Enron Ethics and Organizational Culture

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Enron Ethics and Organizational Culture

Table of Contents

Introduction
Enrons Ethical Culture
Role Culture Played at Enron
Conclusion
References

Introduction

Electricity and natural gas were both sold wholesale by Enron Company Limited. It was profitable and operating well for the outside world, but the reality within was different. The lack of accounting openness gave the corporations financial situation a sound appearance. The truth about Enron was uncovered when outside specialists began to doubt its financial accounts (Benke, 2018). Enrons top management and the companys immoral organizational culture are to blame for its ethical collapse. Enron had a surveillance mechanism, a code of conduct, and a training film on vision, a crucial component of overall ethics. However, ethical conduct was independent of ethical laws (Benke, 2018). The moral standards gradually disappeared as accounting methods were used to present a good portfolio.

The unethical standards at Enron allowed the staff the freedom to develop immoral strategies for achieving their objectives. Moreover, it appears that the workforce has complete faith in their manager. They neither challenge managements choice nor do they make an effort to participate in decision-making. Therefore, it appears that the manager is both unable to supervise his employees unethical behavior and lacking in the ability to make a stand against it. Enrons whole structure turned out to be immoral over time, and the companys inevitable demise started. Eventually, the firm collapsed in 2001 once the world learned about Enrons unscrupulous business practices (Benke, 2018). The ethical collapse of Enron was a historical occurrence.

Enrons Ethical Culture

Moral conduct is encouraged among a firms partners thanks to an ethical culture. When a corporation has a strong culture, its members establish and concur with its objectives and principles. Enron encouraged a culture of rash business decisions, greed, and lies. Respect, morality, and a feeling of societal duty were utterly lacking. To the extent that Enron reached its lowest point, the companys culture was devoid of ethics (Benke, 2018). At first, the company executives and workers prided themselves on having upright conduct in business. Ultimately, they were so unaffected by their behavior that they completely abandoned track of their fundamental principles.

Role Culture Played at Enron

A firms culture influences personnel and stakeholders ethical perception. Organizations that seek to build a robust ethical culture encourage every employee to speak and behave honestly and ethically. Strongly moral businesses draw clients to their goods and services (Meade, 2021). The corporate culture in this instance of Enron was crucial to the companys demise, which resulted in a wide range of issues. Since the Enron bosses acted unethically, the staff members imitated their poor habits. Poor workforce morale and decreased performance might result from a toxic workplace environment. In the long term, it may hurt the businesss prestige and hinder the capacity to recruit top people.

Conclusion

A joyful workplace, team cooperation, and worker engagement result from a healthy business culture, which encourages workers to act ethically. Since personnel view, top management as a model of the kind of behavior that the firm considers acceptable in the workplace, Enrons CEO may provide a good example. Secondly, to make clear what is expected of their personnel, the CEO could express a comprehensive company code of ethics (Brooks & Dunn, 2020). The management could give employees incentives to act morally, particularly if they serve an organization with strong standards of ethics. Then, the leader could provide concise training courses based on actual situations that staff members might face, with the resolution demonstrating how moral behavior takes precedence over financial achievement (Brooks & Dunn, 2020). Finally, the CEO could recruit workers who exhibit ethical behavior and self-determination.

References

Benke, G. (2018). Risk and ruin: Enron and the culture of American capitalism. University of Pennsylvania press.

Brooks, L., & Dunn, P. (2020). Business and professional ethics. Cengage Learning Inc.

Meade, P. T. (2021). Evaluating and improving company culture. Journal of Risk Management, 68(2), 14-15.