Leaders seeking self-benefit focus on personal achievements, and control followers through coercion and reward. 201-211). only proliferated more investments from current stockholders, but also Worldcom Scandal Shiva Js Kumar. Due to the actions of the ENRON executives, the ENRON Obsession with short-term results encourages executives to do whatever they can to meet these expectations. They manipulated information while engaging in inconsistent treatment of internal and external constituencies. Mr. Kenneth Lay was the CEO and chairperson of the company, he hold a Ph.D. in Economics. Cruver, B. Many willingly bought into the get rich quick mentality of the Crooked E. During the company’s 15 years of rapid growth, few stopped to question the company’s tactics. Report: Enron board aided collapse. Enron Corporation is an energy trading, natural gas, and electric public-service corporations company located in Houston, Texas that had around 21,000 employees by mid-2001, before it went bankrupt. Each of these approaches emphasizes the duties that leaders have both to followers and to the larger community and can serve as a framework for discussions of leadership and followership ethics. Instructors cater to this motivation when they act as cheerleaders for prominent business leaders like Jack Welch or Kenneth Lay. Enron CEO Ken Lay wrote a public statement saying that Enron “believes in conducting business affairs in accordance with the highest ethical standards… your recognition of our ethical standards allows Enron employees to work with you via arm’s length transactions and avoids potentially embarrassing and unethical situations.” Enron Company. New York:Teachers College Press. An earlier version of this paper was presented at the 2002 National Communication Association convention, New Orleans, LA. Retrieved August 8, 2002 from http://www.msnbc.com/news/787517.asp. Ethical theory provides us with a system of rules or principles that guide us in making decisions about what is good or bad and right or wrong in a particular situation. (1993). How can society develop a long-term perspective on financial results. It is the first in a new series assessing organisations against ACG’s Golden Rules of corporate governance and applying our proprietary rating tool. Such courage was sorely lacking at Enron. There are a vast number of ethical issues we can get from the Enron scandal. In a narrative format, discuss the key facts and critical issues presented in the case. Ethics Issues At Enron. Events leading up to Enron’s bankruptcy have been chronicled in a host of magazine articles as well as in such books as Anatomy of Greed (Cruver, 2002), Enron: The Rise and Fall (Fox, 2003), What Went Wrong at Enron (Fusaro & Miller, 2002), The Enron Collapse (Barresveld, 2002), and Pipe Dreams (Bryce, 2002). http://specials.ft.com/enron/FT3648VA9XC.html. They overlook the fact that the same qualities and strategies so often praised in business and other leadership literature can lead to disaster. Those who study and teach ethics believe that they would exhibit the virtues that Lay, Skilling, and Fastow seemed to lack. In one instance, Lay withdrew an underwriting deal to pressure Merrill Lynch into firing an analyst who had downgraded Enron stock (Smith & Raghaven, 2002). Retrieved August 8, 2002 from http://www.msnbc.com/news/718379.asp. Ethical Issues. The sudden and unexpected collapse of Enron Corp. was the first in a series of major corporate accounting scandals that has shaken confidence in corporate governance and the stock market. The key values of the company were respect, integrity, communications, and excellence. Associated Press (2002, July 7). These questions should be considered: Since Aristotle, scholars have examined the factors that make a source believable to an audience, an interest based on the strong correlation between credibility and influence (Hackman & Johnson, 2001, chap. The deception within Enron was so thick that even the top Executive believed that they were … With our Microsoft endpoint management services, you’ll watch your network security, compliance, and personnel free time go up and your costs, risks, and trouble tickets go down. Ethical Issues Evident in Enron Case. 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