Ethical Dilemma



Ethical Dilemma

Introduction

Ten years ago, everyone witnessed that Enron went bankrupt and moved out from the market. The devastating effects it has laid on the business ethics will never get disappeared. Enron took 16 years to raise its assets from 10 billion dollars to 65 billion dollars, and took just 24 days to ruin all its valuable assets (McLean & Elkind, 2004). Fortune 500 rated the Company as the 7th largest Corporation and 6th largest Energy Company in the world. In the year 2001, Enron filed for security regarding leading case of liquidation and economic failure in the country. In 2001, its share were reaching the maximum height of 90$, and suddenly it decreased to less than 1$. It appeared a biggest disaster for all of the stakeholders involved in Enron, along with employs and shareholders. Workers lost their jobs and retirement funds, and shareholders lost billion of their investments. In this paper, ethical dilemma of Enron Scandal has been discussed and the prescriptive ethical frameworks involved in Enron case were examined.

Discussion

Ethical Dilemma of the Enron Scandal

It was established in 1985 as a power supplier to customers. It was an interstate pipeline firm. Company flourished throughout the mergers with Houston Natural Gas and Oman-based Company. With the passage of time, Enron turned out to be the leading Energy Company in the world. It also attained praiseworthy and admirable titles, like 'most well-liked companies in the world,' and so on (Skilling vs United States, 2010).

To face the rising challenge from the rivals, Enron made a decision to diversify its business and use global venture to maintain its market share. In reality, these decisions brought unpredictably great losses rather than profitability. Enron made another wrong decision by venturing with Fiber Optics Company and broadband market. This made company suffer heavy looses and losing its market position. Nevertheless, Enron had never revealed any information regarding losses till 2001. In its place, Enron overstated and exaggerated its profits and hide its liabilities. Here, they acted unethically and broke their shareholders trust. After manipulating the financial accounts, Enron never disclosed the risky state that is required by investors to know. In contrast, managerial bodies revealed a great profit projects in the course of the press and motivated shareholders to buy its stocks. They also recommended their workers to do the same (Gini, 2004)

The audit firm aided to cover these scams for 5 years. Whenever investors or workers articulated their uncertainties regarding financial state, Enron would try to calm them and later fire them. In the meantime, managerial body committed fraud. Mangers also increased the share cost and earned huge amount throughout trading it (Skilling v. United States, 2010). Thus, both shareholders and workers suffered greatly from this calamity when Enron went bankrupt.

Ethical Frameworks

Enron was an international energy company that went bankrupt and filed for its protection in 2001. Company's executives were involved in fraudulent activities for some time throughout a plan in which ventures possessed by the executives could get sum of ...