Nov 19, 2020 in Case Studies

Enron Company
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Case Analysis

In October 2011, Enron Corporations was involved into the ethical scandal. This situation has led to the bankruptcy of the one of the five biggest American energy companies (Gillan & Martin, 2007). However, in spite this organization was one of the greatest in the United States of America, it fell down very fast. This paper will include the analysis of the ethics policy in the Enron Company. In addition, the research will consider the questions of morality that existed in the company. Moreover, the paper will contain a detailed analysis of the ethics policy as well as the authors attitude to the scandal. Besides, the paper will make a theorized assumption regarding what could have happened if the company had survived after the scandal.

 

The case of the Enron Company is rather complicated because the sum of corruption was rather high. On the other hand, this occurrence is interesting for those who study at business schools since it allows students to understand the scheme of how the big business works. There are different resources in the Internet that contain different points of view on this case. Those resources include both the testimonies of victims as well as words of the top managers of the company, their confessions. Nevertheless, such amount of information allows a researcher to understand the case better.

From the beginning, the company faced several financial problems, but it managed to survive. In 1988, the organization changed its goal from energy delivery to energy broker (Sims, 1992, p. 504), which allowed it to become one of the most powerful companies in the United States of America. The firm always has emphasized the seriousness of incorporate culture; this, however, can be seen in the companys motto. Later, the employees confessed that every person in the enterprise should have been following up all the standards which were constantly rising. Moreover, the companys authorities did not want to notice that employees were about to break down. In my opinion, the conflict was raising since the beginning of the companys history and the main reason for it was that the president of the company, as well as top managers, willing to earn money without thinking about the need of employees. The organization propagandized high moral values and culture inside of the enterprise; nevertheless, the main value inside the Enron Company was the competition between the employees. When the scandal rose, newspaper articles were highlighting this problem of corporate policy, which made it even shaper.

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The problem rose not only inside the firm. The companys authorities had problems with stakeholders, as well. Stakeholders were not only those who worked at the company, but also ones who had signed partnership contracts with other companies. When the problem of corruption, as well as the cultural issue, became known to public, the company had several problems with stakeholders. Afterward, it has been revealed that those partnership programs were not legal because the company earned much money for comparing cheap products. That is why when the corruption and cultural problem rose, it was clear that Enron Company was cheating its customers about the legality of their work. In my opinion, this influenced the companys reputation and did not add any respect from journalists.

 
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As it has been already mentioned above, the main value of the company was the quality of its product. Every employee was to perform his or her work according to the highest standards the firm put (Stephens & Behr, 2002, p. 1). From the moral point of view, it resembled more the way of living of slaves in the period of the Rome Empire because the authorities of the company were aimed on earning money and they did not care about the wealth of its workers. From the moral point of view, the society would not accept such a situation (Hollenbach, 2002, p. 34). As a result, the company was hiding the conditions of work and the process of evaluating the work of employees (Huanzhang, Lilin & Panghui, 2005, p. 470). Moreover, it is not as legal as it might seem. Though the law of the United States of America establishes that a working week should last no more than forty hours, it might seem the company does not violence any of the laws. Nonetheless, the law states nothing about the amount of work a person ought to perform. That is why I claim that the actions of the company were illegal.

There are different ethical theories that might explain the situation in the Enron Company. However, there is no theory that explains the reasons of such behavior of the authorities of the company. There are two different points of view: from the corporate angle and from the individual one. On one hand, the individual angle can be the one right position that details the situation at the company. The firm consists of persons who are the only force that helps the company to survive. Besides, people are those who set and support all the moral standards in the company; hence, it is useless to blame the organizations authorities. The thing is that if the employees did not want to follow the rules established, they could have either changed them or sabotaged. Every individual was responsible for his or her actions because they were not forced to act like they were acting. On the other hand, the corporate angle means that every manager is responsible for the orders he or she gives. Moreover, stakeholders did not know anything about the cultural situation that was in the Enron Company. Most of the researchers state that if stakeholders, as well, as the companys authorities have paid more attention on what happens in the enterprise, they would have noticed the problem earlier and, perhaps, they would have avoided the scandal.

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