CORPORATE ETHICS IN THE POST-ENRON ERA

Corporate Ethics in the Post-Enron Era from the Role of a Policy Analyst

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Abstract

The paper explains the importance of chosen policy, as well as addresses ideas of how to remedy the corporate malfeasance issue. The paper also proposes recommendation to decision-makers and government on how corporate governance can be improved with regards to corporate ethics.

Table of Contents

Abstract2

Table of Contents3

Introduction4

Discussion5

The Scope of the Problem5

Need of Business Ethics6

Recommendations7

Government Reforms7

Private Reforms10

Conclusion11

References12

Corporate Ethics in the Post-Enron Era from the Role of a Policy Analyst

Introduction

In early literature of management, owners and stakeholders were same, and the responsibility of top managers was primarily to these shareholders. Later on, these managers have appeared as non-owner stakeholders as necessary to success of firm, in both financial and societal terms. Conversely, this has not eradicated managerial decisions that are more than usually apprehension with financial performance at the cost of stakeholders' interest. During 21st Century, the collapse of Enron because of accounting scam against include Medicare, Tyco and Time Warner by United Healthcare and HealthSouth exemplify that in spite the clear logic of stakeholder management's integrated perspective, however, few managers still seized to the separation perspective. This reflects that shareholders are not only concern about financial results and these financial results not always in their interest. Enron stock holding, still those who do not know about the firm's illegal activities, eventually realize that maximizing wealth of shareholder by excluding non-owner stakeholder is not inevitably consistent. In reality, if the interest of non-stakeholders is not valued it can inadvertently increase pressure on managers (Robertson & Athanassiou, 2009).

An efficiently and economically to create a way emergency is to extend a "parade of horrible" by accumulating headline of securities firms and potent individuals who have been held responsible for misconduct. The recent working paper “The Bigger They Are, the Harder They Fall” that estimated the loss to US economy because of Enron and WorldCom fraud was about $37 billion to $42 billion. As a result, their stocks have fallen from its ex-values, and senior executives have been charged. A small number of responsible ethical business trainers missed a chance to refer to Enron to show consequences if mangers work irresponsibly, known as “Enron Effect.”

Discussion

Enron shuck the public confidence, explicitly in the capital markets that was economic system lifeblood resulted in unemployment, as well as cause lose of billions of dollars in retirement security and investments. That raised the question in the mind of business leaders and Americans regarding the balance between shareholder ethical values and value.

United States have been categorization through the Enron blow wreckage. Business ethics cannot be enforced by the government by formulating legislation regarding moral or ethical values in the marketplace. Business and business people must do it by their own (Moore & Wen, 2008).

The Scope of the Problem

It is the association of the middle class investors who have been affected in Enron's wreck. They are unsure whether the immense pressure on other top business leader ...