Enron Scandal: White Collar Crime Short Summary

In organizational behavioral theory, it is clear that in the Enron scandal, one can understand the elements that encourage white collar crime. Organizational crime has three categories, (1) organizational goals (2) organizational environment (3) and organizational structure (Whispered, D. 1992) Clearly in Enron scandal, opportunity theory will argue that traders who had a hard time meeting its numbers will had a greater chance of utilizing illegal meaner to meet its goal. (P. 5) I thought that the performance review system, put a lot of pressure on the traders to produce cash and refit therefore, forced them to engage in illegal business transactions. Perry (1972) and Kramer (1982), stated clearly that large corporation ‘provide specific objectives that will most directly influence criminal behavior. ” (Whispered, P. 65) For example, the performance review system, aim at aligning individual and corporate goals, exacerbated the competitiveness as employees used several tactics to manipulate cash and “keep making profits. The consequences of this led to traders to push through over-valued deals.

Sometimes they changed the prize projections at the last minutes in order to favor their short term trades at the expense of originator’s long term contracts. I like to use differential opportunity theory in this framework to further support my view in organizational behavior. Differential opportunity theory here builds upon strain and anomie theory. In the Enron scandal, it pertains to strain theory on a micro variable point of view from lack of cash production or profit in meeting its goals.. My interpretation is that for traders to meet their objectives and produce profits, they are more than likely to engage in illegal behavior.

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This puts a lot of pressure to meet standard performance. In organizational environments, lack of law enforcement will not deter unlawful corporate behavior, although external controls maybe in place. (Dry. Lacier, week 2 study guide, P. 1 1) Enron code of ethics served as a behavioral control intended to prohibit a range of unethical behaviors. It is obvious that the code of ethics in Enron did not serve its purpose. Corporation like Enron encouraged and promote employees to engage in illegal business behavior, they were rewarded with large bonuses and were told “to keep making millions”.

Clearly, this demonstrate that there was no internal legal control, leadership of Enron did not enforce the code of ethics in place to prevent criminal activity. (Film, smartest guys) There was no ” legal restraints in economic structure of the industry’, everyone was in the bandwagon. The word “useful idiots. ” is The lawyers, bankers, and accountants who were all part of the illegal process, and took part in “cooking up the books” went on with the unethical practices, because they were also getting a piece of the pie. Film, smart guys, 2005) Sociologists looked at different” variables with organizations that may promote “criminal behavior” to include size, internal control structures and subcultures. (Whispered, P. 68) Lane, 1954, found ” firm size to have contradictory effects on criminality depending on the industry and type of violations involved and concluded that there is no clear relationship between size of corporation and it’s violations” (P. 58) Clarinda and Yeager (1980, P. 130) Breathiest (1984, 1989) agreed that institutions with formal’ compliance divisions”, to ensure corporation follow the law are more likely to do so.

P. 69) In Enron, we witnessed that tens Is not ten case. Enron CEO Ana executives’ tentacle Demeanor 010 not set ten standards for the employees to follow. (Smart guys, 2005) Enron was build on a culture of greed and corruption. In social psychological processes, Enron employees who refused to participate in illegal trades and did not meet expectations were more likely to lose their Jobs. The tactic they used were called the Weed the weak”. This meaner that if they did not produce profit, they will be removed or transfer.

In Enron scandal, huge bonuses were motives for high performance and to please the boss. This structure, I thought was base on macro level rather than the micro. Some characteristics of individuals involved in the Enron scandals vary. Characteristics included charismatic, there was a need to control, and urge to bully subordinates, for example, by usage of tactics to force employees to conform. Subordinates had fear of losing their status or position, and employees lack sense of integrity, Just to mention a few. I feel that in Enron scandal there were generally two groups, the leaders and followers.

In my view, leaders for example, like ken Lay and Killing were arrogant; feeling entitled and engaged in rationalization. The followers, I thought shared the same personality and motivational factors for profit and greed. References: Frederic’s, D. (2010) Trusted Criminals, White Collar crimes (4th De. ) Headwords, Coinage Learning Whispered, D. Schlemiel, K. (1992) White Collar crime Reconsidered, North Western University Press, Boston Dry. Lacier (week, study guide, September 10, 2013) CO 632 White Collar crime Enron the smartest guys in the room, (2005) Magnolia home entailment

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