Lack of ethics at enron case study

Advantage Ethics, Accounting Ethics, Place of work Ethics, Curriculum vitae

Excerpt from Case Study:

Enron Advantage Ethics

The author of this record is to choose three virtues from a list and describe the way they were or were not used in a specific instances. The virtues that can be picked from are rights, fairness, honesty, courage, prize and truthfulness. For three virtues that are chosen, there will be a definition of every single one. After defining every virtue, it will have an application to the Enron case. Indeed, there was clearly not a lot of virtue when it came to the Enron case. It began at the top with Lay, Skilling and Fastow and there was a lot of other people that have been actively mixed up in fraud and depravity that was below way. Simultaneously, the ethical malfeasance on the part of those three men plus the others led to a lot of people staying victimized before and after it all blew up in everybody’s faces. While there have been other accounting and corporate scandals inside the history of the us and the wider world, the Enron ordeal set a fresh standard in regards to a lack of right virtue integrity.

Analysis

Three ethics that will be discussed since it they correspond with the series of events that was the Enron scandal will probably be fairness, justice and accuracy. Before progressing to how they apply at Enron, they may first be defined. When ever browsing the word “fairness” on the Merriam-Webster on the net dictionary, the writer is steered to the work “fair. inches There are three overall explanations that are offered by the site. The first is “agreeing using what is regarded as right or acceptable. inches The second is “treating people in a way that does not favor some other others. ” The 3rd and last definition is definitely “not too harsh or perhaps critical” (Merriam-Webster, 2015). With regards to justice, you will discover two key definitions. The foremost is “the procedure or response to using regulations to quite judge and punish criminal offenses and criminals. ” The second definition if “a judge in a court of law” (Merriam-Webster, 2015). When it comes to accuracy, there is a refocus to the word “truthful. ” When it comes to that word, this will mean “telling the truth” or “containing or conveying the truth. ” When it comes to the basis word “truth, ” the first which means is “the real facts about something. ” Another definition of truth is “the quality or state penalized true. inches Finally, you have the definition “a statement or idea that holds true or accepted as true” (Merriam-Webster, 2015).

Application to Enron

Justness

When it comes to the word fairness, you will discover multiple ways that fairness could possibly be applied to Enron in particular or business on the whole. When it comes to business generally, the word justness gets thrown around a lot but it could mean a lot of different points. When it comes to the profits and functions of businesses, a large number of point to company social responsibility and ponder over it “fair” as well as required (even if it’s not really in writing) for businesses never to charge the actual can even though they have the ability to do so. Fairness could also be applied when it comes to business practices in general. Often, what is regarded fair and what is legal are not the same set of actions. There are a few laws that address a number of the more devious actions just like those that require insider trading and the like. Nevertheless , timely details and being in the right place at the right time is often the difference for a lot of persons (Erb, 2011).

However , justness is a whole different ball of wax with regards to the whole Enron affair. One obviously example of fairness eliminated horribly wrong is the fact that the investors that had been invested in Enron were playing pennies on the dollar, if anything, after Enron collapsed. For employees of Enron or perhaps anyone else that was entirely and only committed to Enron, this literally wrecked lives in many ways including retirement plans and savings on the whole. While it is obviously less than wise to only be used one type of expense, it is not at all uncommon intended for someone’s complete nest egg being their workplace 401(k) or perhaps something else along those lines like revenue sharing and the like. Another way of looking at justness when it came to Enron was so what happened to the three main ringleaders of the Enron scam. Kenneth Law was convicted of some major charges. Nevertheless , he died between the period that the dedication took place as well as the time he was to have been sentenced. This was very lucky timing intended for the wife and estate of Mr. Lay because this effectively produced the consensus null and void and this would contain any reimbursement[n]: reparation; indemnity; settlement; compensation; indemnification, jail time etc. Jeffrey Skilling was as well convicted. He lived to serve a jail sentence in your essay but had it reduced because one of many laws that was used to convict and sentence the man was not technically applicable about what he was offender of doing. As a result, his word was lowered by a significant amount. Regarding Fastow, he himself lucked out as well because he slice a deal to testify against Lay and Skilling (Business Insider, 2011).

Justice

With regards to justice, this very perfectly dovetails while using fairness debate mentioned above. A large number of hold that the fact that Kenneth Lay perished when he do should not include negated and nullified his sentence. Without a doubt, he was tried and convicted in a court of law. Just because he was unable to serve a prison sentence, at least to a lot of, should not signify his better half and/or other heirs need to enjoy the money and assets that he accumulated on the backs of the scam and the employees that were remaining penniless or perhaps close to that as compared to in which they were prior to scam. As for Skilling, various would believe the prosecutor and/or the jury was incompetent and that if there were not a regulation that could place Skilling away for a good many years so that he performed, there should be. Consequently, it is either the case of your prosecutor that was a bumbling idiot or maybe the laws on the books are not designed to handle what the Enron executives did. The deal that Fastow lower was every well and good if perhaps there was adequate payoff to get letting him off convenient. However , the guidelines of justice would seem to indicate that this was simply not the situation. This is not the fault of Fastow. However , the situation remains that every three males, each in their own way, escaped justice to one degree or another and in one or even more ways (CNN, 2015).

Truthfulness

As for reliability, this subject matter would be a great amalgamation of some other two in lots of ways. For example , telling the truth is a funny thing in terms of doing business. For instance , a lay by omission is often utilized to keep or perhaps gain a competitive advantage. Since a lie had not been technically uttered, many persons feel that they may be still formally in the proper. However , there are many examples wherever this is plainly false. One of those would certainly be virtually any situation where a company is usually publicly traded. Indeed, companies which can be publicly traded are required by the regulation and firms like the Securities Exchange Percentage (SEC) to report selected metrics and data including revenue, income, operating perimeter, dividends and so on. Enron did that but they had been telling a lot of half-truths and outright lies whenever they did so. Certainly, they were shuffling money between subsidiaries in a way so as to prevent reporting losses and other bad information to stockholders, investors and employees (Barrionuevo, 2006).

Stakeholder Impact

To state benefits, the three virtue ethics mentioned previously and how Enron clearly failed to uphold these people had a severe and unfavorable effect on a huge number of stakeholders. Indeed, the stakeholders pertaining to Enron could include the professionals, the employees, the customers which were being bilked due to Enron’s market manipulations and the shareholders that bought and sold Enron share. It should be noted that many the employees and shareholders had been the same persons as it is quite common for employees to have stock and perhaps they are often offered a discount pertaining to doing so. Nevertheless , regardless of how or perhaps why a person wound up having a financial stake with Enron, it obviously reached a a crash halt the moment Enron’s scam was uncovered. However , the stakeholders involved go beyond Enron because the other accounting firm Arthur Andersen was mixed up in fraud as well. They were rubberized stamping the unfinished or completely wrong information that was being reported to stakeholders and shareholders (Hartley, 2014).

One can consider all of this stakeholder talk to a different sort of level. For example , an Arthur Anderson worker who worked for the business during Enron is going to provide an awkward conversation or two regarding

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