ENRON ETHICS

Enron Ethics

Enron Ethics

Introduction

The following essay is concerned with the critical analysis of the organizational culture that led to the debacle of Enron Corporation. For the purpose of this essay, we chose a case titled 'Enron Ethics (Or: Culture Matters More than Codes' by Sims & Brinkmann. This paper sums up the events, attitudes and organisational behaviours that led to the collapse of Enron Corporation.

Enron Corporation was established in 1985 and was very successful Energy Company in the United States. Until the recent past, it was being ranked at 'seventh' position in the market capitalizations. It was a highly rated organization and acted as the United States' government adviser (Sims & Brinkmann 2003, 243). Many employees wished that they could work in this reputable company. It was guided by the principles of excellence, corporate responsibility as well as ethics. However, a crisis started when the organization was using questionable accounting practices in an effort to ensure that its credit rating maintained.

Culture History of Enron

Throughout its existence, Enron Corporation signifies the extremes of an organization working in a global context and capitalist economy. . It was regarded to represent as one of the best 21st Century organizations in terms of economical and ethical. Within less than a year, the firm departed from being a sign of “the most innovative company” model of ethics, social responsibility, and success. These qualities were replaced by failure indicators like greed, mismanagement and deception

Deregulation in the power sector permitted Enron to act as a match maker which eventually brings sellers and buyers at the same platform. Enron made profits from exchanges, and from the differences in the prices of buyers and sellers. The same deregulation let Enron to be innovative and creative. With the passage of time, Enron's contract's turned out to be increasingly diverse and drastically more complex and complicated. The firm's culture developed and progressed along with its product and services.

Jeffery Skilling, company's former president and CEO, enthusiastically refined a culture to push limits with his mantra of,” Do it right, do it now and do it better”. He supported and pushed employees to be innovative, independent and assertive. “Enron's Transformation”, case study of Harvard Business Review, employees figured out as saying, “You are supposed to act and deliver to a standard that was continually being raised,” "The only thing that mattered was adding value," and "It was all about an atmosphere of deliberately breaking the rules.” Employees were forced to extend and widen the rules more and more, until the boundaries of ethical conduct are overlooked effortlessly in the detection of the subsequent tremendous success (Ronald & Johannes, 2003, 243-244).

The Ultimate Debacle

The Enron Company had been one of the most successful companies in the world. The scandal at Enron involved the highest levels of leadership, to include the CEO. This elaborative scheme involved reporting profits from sources that were fraudulent to the tune of over $591 million. This "cooking the books" scheme had been mastered minded by the Chief Financial ...