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Enron Scandal Essay

681 words - 3 pages

Enron as an ethical dilemma can only be described as a travesty. The violations of ethical code and moral obligation ceased to exist while the company was alive. A tremendous contributor to the scandal is Arthur Anderson, who was Enron’s outside auditor since 1985. Arthur Anderson was able to hide major losses from Enron. Many projects that had failed through Enron seemingly went unnoticed as they were covered up by Anderson. Not only was this illegal, but it was ethically wrong of Anderson and Enron to do. Most of what Enron did violated business legality. The decision to break these laws is surrounded by the unethical approach the company took in order to maintain company power. The categorical imperative of the energy giant is that in order to maintain power, we as a company must hide our losses. This is one of Immanuel Kant’s theories that focuses on imperatives and what human beings deem as necessity, and what actions must occur in order to reach ones ...view middle of the document...

We can blame a lot of this unethical behavior on the environment that Enron set for its employees. They had strict ratings systems that coerced twenty percent of employees to leave the company because of underperformance. Due to the harsh environment and competiveness for financial gain, Enron’s employees sought to cheat to ensure that they would remain an employee. It was a ripple affect amongst workers, as everyone had to stay competitive so it evoke more cheating and less ethical behavior. Enron tried to keep its employees and outside parties quiet. “Employees were discouraged from expressing doubts about the financial condition of the company as well as decisions made by the executives.” (Wang). The single most important goal was to increase financial numbers as opposed to the value of Enron itself. “This evil culture contributed to Enron’s scandal. At Enron, both executives and most of employees behaved unethically when they encountered conflicts of interests. They were greedy and self-interested.” (Wang). The utilitarian theory couldn’t be less obvious in this situation. This brings us to our next topic at hand, which is the idea of ethical egoism.

Ethical egoism is the idea that human beings act only in their self-interest. Almost every executive of Enron followed this theory in the way in which they made decisions. Why did executives choose to lie and cover up losses instead of telling the truth and reporting major losses? This is why business ethics has become more relevant in today’s society. What is it that drives human beings to act unethically? Maybe money really is the root of all evil and Enron and all of its employees couldn’t see past it. Kenneth Lay, who was the founder, chairman and CEO of Enron was pivotal in the demise of Enron and all of its assets. “Under his leadership, Enron was involved in fraud, causing investors to lose billions of dollars.” (Wang). He overlooked everything the company was doing and signed off on numerous illegal activities over the years. He set the tone for the harsh work environment. Lay also made it clear that the ultimate goal of Enron was too increase its financial gains while forgetting about the value. Kenneth Lay is the poster boy for ethical egoism, as he only acted out of self-interest.

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