Based on what you read in this chapter, summarize in one page or less how you would explain Enron’s ethical meltdown. After reading chapter 14, my knowledge of ethics has significantly increased. The first paragraph of the chapter points out that ethics is not theoretical; instead it greases the wheels that make the business work. Enron’s behavior as an entire company was unethical. Chapter 14 explains making ethical decisions always requires normative judgments. Enron’s top executives had to make many normative judgments. In many occasions they had to decide if what they were doing is good or bad.
They could have chosen to make the ethical decision to not lie on the accounting reports; however, they decided to make the unethical decision and lie. Enron’s managers should have asked themselves if what they are doing is legal. In the end they only set themselves up for unethical behavior. After a few employees began to cheat, the only way to fix these choices was to cheat more. This created an unprincipled culture throughout the whole company. The worst part about Enron’s scandal is they hurt people inside and outside of Enron.
They tried to keep employees as well as outside parties quiet about their financial statements. Enron’s employees were pressured into keeping quiet and protecting their own short term interests. This made them try to achieve goals even if it was to cheat. At Enron, executives and most employees were unethical and greedy. 2. It is said that when one securities analyst tried to confront Enron’s CEO about the firm’s unusual accounting statements, the CEO publicly used vulgar language to describe the analyst, and that Enron employees subsequently thought doing so was humorous.
If true, what does that say about Enron’s ethical culture? If this was true, it would summarize how the company was as a whole. If the CEO was able to act like that, then it would cause chain reactions throughout the whole company. This behavior caused a culture of deception. The company created an environment that if he people didn’t behave incorrectly they would be considered odd. This behavior contributed to the covering of errors and cheating because employees tended to be uncooperative. This even made employees misunderstand what their job was.
As a result, they would cover up their errors to make themselves look good. 3. The case and chapter both had something to say about how organizational culture influences ethical behavior. What role do you think culture played at Enron? Give five specific examples of things Enron’s CEO could have done to create a healthy ethical culture. Culture played a large role at Enron. Their unethical culture started from the CEO all the way to the bottom of the employee chain. If you tried to go against the company you would most likely get discharged.
Five examples of things Enron’s CEO could have done to create a healthy ethical culture could have been: •Make employees feel accountable for their actions. •Make employees ask themselves questions such as, is this action legal? , is it right? , who will be affected? , will it reflect poorly on the company?. •Create an honest culture throughout the company. •Do not reward someone for bad behavior •Have managers influence employees by carefully cultivating the right norms, leadership, reward systems, and culture.