M7A1 Case Analysis: Enron’s Ethics Policies
Gary Pace
Excelsior College
Business Ethics
BUS323
Professor Pao
INTRODUCTION/SITUATIONAL ANALYSIS
The object of this case analysis examined the ethics program of the Eron Corporation. The case analysis examines the Enron’s organizational culture that led to multiple counts of security fraud and its bankruptcy, in December 2011. Although, there are many contributing factors to the demise of the gas company, the major factor was its unethical practices and its financial scandal to its shareholders.
This analysis will address the cultural elements within Enron organization that supported and did nothing to stop unethical behavior. Additionally, this analysis examines changes in…show more content… 243). “How could such a large company fall so hard, so quickly?” The answer lies in the organizational culture. If corporate leaders encourage rule-breaking and foster an intimidating, aggressive environment, it is not surprising that the ethical boundaries at Enron eroded away to nothing. (Sims & Brinkman, 2003, p. 247). At Enron, executives used various mechanisms, such as attention, reaction to crisis, role modeling, allocation of awards, and criteria for selection and dismissal to create a culture that promoted unethical practices (according to Shein, 1985). Enron’s executives valued profit more than accountability to shareholders. This value was so deeply embedded within the organization that the company 's leadership promoted and retained only those employees that produced consistently, with little regard to ethics. (Sims & Brinkman, 2003, p. 250)
Greed drove Enron’s organizational culture. Their practices were illegal and created an organizational culture that resulted in unethical behavior and the eventual fall of the company. One key element to this corrupt organization was its lack of accountability and leadership. When strong company leadership would have been needed the most, Enron 's leader left the company (Sims & Brinkman, 2003, p.