Factors That Created Bad Corporate Culture At Enron: An Essay On Personal Code Of Ethics And Ethical Frameworks.

The primary purpose of this report is to elucidate on the factors that paved the way for the creation of bad corporate culture at Enron.

The report also creates the personal code of the ethics that can provide guidance to an individual in relation to professional along with personal decision making.

The report focuses on how relationships, honesty, transparency, work ethics and fairness can help in creating the right kind of culture in an organization.

Factors that created the culture of the profit at Enron

Business ethics helps in examining the ethical principles of a business which can rise within the business environment. It can be applied to all the aspects in relation to business conduct which is important for the behaviour of the individuals within the organization. Enron Company is the name of an American energy company which is based in Texas. This report throws light on the factors that have given rise to profit culture in the organization. The report creates the personal code of the ethics that can guide an individual in the professional along with personal decision making. This report also links the code of the ethics to the biblical ethical frameworks.

Pride along with arrogance were responsible for creating the profit culture that destroyed the principles of the employees at Enron. The employees along with the investors of Enron lost everything and it was the company that was able to gain from this event. It was instrumental in destroying the economy of that of California and there were incidences of human failings in the organization. The greed for money caused the CEO of Enron along with the top management of the company to take recourse to the malpractices that harmed the investors of organization (Youtube.com., 2018). It was played out on a great scale and there was no amount of checking that ruined the fate of many people who were involved in the company.

 The company has huge amount of potential but it was the intolerance of a group of people that made the company take recourse to unethical ways. The factor that gave rise to the unethical culture was that it could trade anyone in the world and this pushed the company into a state of ruin. The concentration of power in the hands of a few people paved the path for the unethical ways of the company. The company pocketed a large amount of dollars by taking recourse to the private side deal. The evil action on the part of the company caused Andy to land in the prison along with his wife. The CEO of the company was responsible for making partnerships that were involved in doing bad deals. The friend of the president of the company was the one with whom the bad deals were struck. The factor of greed that was in the CEO caused the ruin of the company. The top management of the company being involved in the bad deal destroyed the culture prevailing in Enron.

Relationships

There should be transparent relationship in between the top managers, employees and the stakeholders of the organization. The shareholder should take the center stage in an organization and the relationship should be opened up with the shareholder community that shall act as the guiding principle of the organization (Bowie, 2017).  The company should engage in the aspect of public relations and the corporate communication can help in reaching out the prospective investors of the organization that can create the path for the creation of building the image of the company (Chell et al., 2016).

Personal Code of Ethics

 The code of conduct can be justified by referring to the framework of utilitarianism that talks about doing good to a large number of people.

The leaders in the organization should act with integrity and keep the promises that can help in building bond between the upper management and the employees in an organization. The managers in the organisation should act with honesty so that it does not delude other people in the organization. The leaders in an organization should be courageous and they should be open to the subordinates in an organization (Wang &Calvano, 2015).  The managers should never compromise on the aspect of integrity that can help in building bond between the management and employees in an organization. Honesty along with integrity should be held in high regard in the organization as it can help in the creation of value in the communications taking place in the organization.

 This code can be justified by referring to ethical framework of Kant’s Categorical Imperative (Kolk, 2016).  The integrity displayed by the leaders in an organization can help in ensuring justice to all the employees in an organization.

The policies of the company should be communicated in a clear manner to all the employees in an organization. Transparency being maintained at all the hierarchical level in the organization can help the organization in working along ethical lines. The rules in the organization should be flexible that can help the employees in adjusting properly to the environment in an organization. The main responsibility of the employees should be highlighted that can help the employees in carrying out their responsibility in a proper manner in the organization (Ferrero &Sison, 2014).  The roles along with responsibilities of the employees should be assigned on the basis of skill sets along with knowledge of the employees.

 This code has been devised on the basis of ethical framework of pragmatism. The man focus is laid on abstract principles that can be said to be hypothetical.

There should be transparency along with disclosure that can help in building a framework pertaining to robust corporate governance in the organization. The reliable disclosure in relation to financial information can help in creating a distinct standard for the company. The organisation would provide timely along with accurate information to the shareholders along with public in relation to financial performance and the liabilities (Michaelson et al., 2014).  The management of the organisation should not engage in any kind of unlawful behaviour and the conduct of the organization would be scrutinized from time to time. There would be system of check along with balances among the management, board of directors and the stakeholders.

This code is on the basis of the ethical framework of utilitarianism that does the greatest good to a large number of people.

The organization should ensure fairness in its decisions along with policies that can help the employees in delivering effective performance in the organization. The employees experiencing fairness at the workplace would be able to develop a bond with that of the other members of the organization. The judgements made in the organisation should be just and the employees in the organisation should be provided with adequate pay along with opportunities in relation to promotion. The employees in the organization should be provided with more information in relation to decision making. The employees should be provided with the opportunity of voicing perspective and the employees should be provided with the adequate responses to points that are raised in an organization. The organization should be able to reaffirm that everyone is getting an equal opportunity in the organization. The promotions in the organisation should be handled in a fair manner by the management of the organization. The employees in the organisation should be provided with fair pay that can provide proper encouragement to the employees in the organisation.

 This code has been framed on the basis of Kant’s Categorical Perspective that lays stress on the idea of justice along with morally correct actions.

Conclusion

Business ethics can examine ethical principles in business that can arise in business environment. Business ethics can prove to be useful in conducting the behaviour of individuals within an organisation. Pride was responsible for the destruction of corporate culture in Enron. The employees of the company and investors lost a lot and on the other hand the company stood to gain owing to the malpractice in the company. The enactment of the personal code of the ethics can help in the smooth functioning of an organization. Transparent relationship existing between managers and stakeholders can help in the proper running of an organization. Leaders within an organization should carry out work with a lot of integrity that can be useful in building close relationship in the organization. Transparency in an organisation can be instrumental in building framework that can ensure the creation of robust corporate governance within organization.

References

Bowie, N. E. (2017). Business ethics: A Kantian perspective. Cambridge University Press.

Chell, E., Spence, L. J., Perrini, F., & Harris, J. D. (2016). Social entrepreneurship and business ethics: Does social equal ethical?. Journal of business ethics, 133(4), 619-625.

Ferrero, I., &Sison, A. J. G. (2014). A quantitative analysis of authors, schools and themes in virtue ethics articles in business ethics and management journals (1980–2011). Business Ethics: A European Review, 23(4), 375-400.

Kolk, A. (2016). The social responsibility of international business: From ethics and the environment to CSR and sustainable development. Journal of World Business, 51(1), 23-34.

Michaelson, C., Pratt, M. G., Grant, A. M., & Dunn, C. P. (2014). Meaningful work: Connecting business ethics and organization studies. Journal of Business Ethics, 121(1), 77-90.

Wang, L. C., &Calvano, L. (2015). Is business ethics education effective? An analysis of gender, personal ethical perspectives, and moral judgment. Journal of Business Ethics, 126(4), 591-602.

Youtube.com. (2018). A conversation about the documentary "Enron: The Smartest Guys in the Room." Retrieved from https://www.youtube.com/watch?v=PNIooXEeVu4.