Ethics
Ethics defines what is wrong or right conduct depending on the context. Ethics varies with cultures. Ethics is also expressed as moral philosophy, philosophical ethics, moral theory and ethical theory. Ethics in most cases is used in addressing conflicts or disputes. There are four areas of ethics identifying with descriptive ethics, Meta ethics, applied ethics and normative ethics. This paper identifies with violations of ethics in Enron in 2001.
Enron was a limited company in the United States. It came out that Enron had one of the greatest violations of ethics in the corporate world (Fox, 2003). Chief Executive Officer in Enron by the name Kenneth Lay led to the downfall of the organization due to breach of the organizational culture in incorrect financial reporting (Sterling, 2002). The government of the United States responded to the scandal by forming laws directed at protecting different stakeholders. The government facilitated Sarbanes-Oxley legislation. Leaders in Enron created an organizational culture that supported impunity in financial reporting.
A number of leaders in Enron were imprisoned; the fall of Enron due to false reporting in accounting also led to the fall of Arthur Anderson, which was a renowned auditing firm. The unethical practices in Enron eroded the confidence of investors in the United States. The credit rating of Enron was tarnished to a point that it resulted to the bankruptcy of the organization (Sterling, 2002). Securities and Exchange Commission was not satisfied with the actions of Lay who acted as the former Chief Executive Officer (CEO) and Jeffery Skilling who acted as the former Chief Financial Officer (C.F.O.) among other leaders in the organization (Fox, 2003).
Breach of ethics in Enron was one of the largest corporate misconduct that eroded the confidence of the general public. Organizations and individuals are expected to act ethically in addressing the interests of all the stakeholders are addressed.
References
Fox, L. (2003). Enron: The Rise and Fall. Hoboken, NJ: Wiley.
Sterling, T. F. (2002). Enron Scandal . Hauppauge, New York: Nova Science Publishers, Inc.
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