Ethical Issues and Argumentation in the Enron Affair will never fade away. At its peak, the company's stock sold for $90 and its assets were worth sixty-five billion, a growth that took nearly sixteen years. However, in just three months all the winnings were lost, resulting in the largest bankruptcy of the time. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay The Enron scandal was caused by a corporate culture that promoted unethical practices (Jennings, 1999). On top of that, none of the responsible parties – i.e. management, the SEC, the accountants, the employees – raised any obligations as to how business was conducted. Taking into account that the company had Enron's Code of Ethics which clearly stated what was and was not ethical business practice. They all did not want to believe that Enron could be too good to be true and simply accepted (McLean & Elkind, 2003). The atmosphere at Enron, under the leadership of Jeff Skilling, was extremely competitive. Skilling launched the Performance Appraisal Board which ranks employees based on respect, integrity, communication and excellence. However, it was extremely biased towards the amount of profit an employee could produce (McLean and Elkind, 2003). Employees with a good rating approached Skilling while those with a bad rating were fired. This led to fierce internal competition that encouraged employees to break the rules when signing contracts. Stakeholder Analysis Enron's executives, primarily Kenneth Lay, Jeff Skilling, and Andrew Fastow, had the most to gain or lose from Enron's rise or fall. They implemented many complex schemes designed to hide losses and give the impression that the company was doing well (Swartz & Watkins, 2003). Leaders were driven by greed and pride to commit unethical acts. Andrew Fastow ran LJM2 Co-investment LP which allowed him to receive $30 million in management fees; the company's code of ethics prevented employees from being associated with companies outside of Enron that had business dealings with Enron. Enron employees enjoyed many corporate benefits, and for traders, production was rewarded with unlimited bonuses. Additionally, the employees' pension plan was heavily invested in Enron stock. All of these factors created a situation where employees kept silent about illegal activities that were taking place in the company and also hushed up whistleblowers (Swartz & Watkins, 2003). Authur Anderson was the CPA firm that handled the external audit of Enron. Authur Anderson also provided internal audit and consulting services to Enron. This created a conflict of interest that led them to cover up the accounting errors for five years. Ethical Theories As long as there is money to be made, people will develop schemes that stretch the rules, or even break them; it is a corporate culture that has always existed and still exists (Jennings, 1999). Enron was no exception; however, it was a rapidly growing company, and as revenue streams declined, unethical behavior increased. The company had become so large that the.

Essay / Ethical Issues and Argumentation in the Enron Affair will never fade away. At its peak, the company's stock sold for $90 and its assets were worth sixty-five billion, a growth that took nearly sixteen years. However, in just three months all the winnings were lost, resulting in the largest bankruptcy of the time. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get the original essay The Enron scandal was caused by a corporate culture that promoted unethical practices (Jennings, 1999). On top of that, none of the responsible parties – i.e. management, the SEC, the accountants, the employees – raised any obligations as to how business was conducted. Taking into account that the company had Enron's Code of Ethics which clearly stated what was and was not ethical business practice. They all did not want to believe that Enron could be too good to be true and simply accepted (McLean & Elkind, 2003). The atmosphere at Enron, under the leadership of Jeff Skilling, was extremely competitive. Skilling launched the Performance Appraisal Board which ranks employees based on respect, integrity, communication and excellence. However, it was extremely biased towards the amount of profit an employee could produce (McLean and Elkind, 2003). Employees with a good rating approached Skilling while those with a bad rating were fired. This led to fierce internal competition that encouraged employees to break the rules when signing contracts. Stakeholder Analysis Enron's executives, primarily Kenneth Lay, Jeff Skilling, and Andrew Fastow, had the most to gain or lose from Enron's rise or fall. They implemented many complex schemes designed to hide losses and give the impression that the company was doing well (Swartz & Watkins, 2003). Leaders were driven by greed and pride to commit unethical acts. Andrew Fastow ran LJM2 Co-investment LP which allowed him to receive $30 million in management fees; the company's code of ethics prevented employees from being associated with companies outside of Enron that had business dealings with Enron. Enron employees enjoyed many corporate benefits, and for traders, production was rewarded with unlimited bonuses. Additionally, the employees' pension plan was heavily invested in Enron stock. All of these factors created a situation where employees kept silent about illegal activities that were taking place in the company and also hushed up whistleblowers (Swartz & Watkins, 2003). Authur Anderson was the CPA firm that handled the external audit of Enron. Authur Anderson also provided internal audit and consulting services to Enron. This created a conflict of interest that led them to cover up the accounting errors for five years. Ethical Theories As long as there is money to be made, people will develop schemes that stretch the rules, or even break them; it is a corporate culture that has always existed and still exists (Jennings, 1999). Enron was no exception; however, it was a rapidly growing company, and as revenue streams declined, unethical behavior increased. The company had become so large that the.

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