Business Ethics Fin 486 Wk1 Ind
Business Ethics and Enron
Jaya Daniel
Fin 486
Prof. Richard Monahan
March 2, 2015
When one starts a company or organization, there are many aspects of that business that need to be sorted. One important aspect of any workplace is the environment and standard of work that needs to be established. This is important for employees to understand what is expected of them. It sets the tone of what behavior is acceptable and what will not be tolerated. It is up to management to ensure the business ethics are established and explained to the employees. It is also important that they show their employees what these standards are by setting an example. When executives and management lead by example, it produces a healthy work environment where the employees are encouraged to act in such a manner. If they (management) engage in unethical and illegal behavior, it sets the tone for a negative work environment that is not healthy for anyone who is employed there. There are examples of companies where management engaged in illegal behavior and the end result was they hurt the company as well as all those who worked for the company. Enron and Worldcom executives ran their business into the ground by lying to their employees as well as those around them who thought the companies were doing very well. Enron was considered a very strong company. At one point, they were named America’s most innovative company. One mistake Enron made was they were changing their financial accounts to show they were more profitable than they were. The were entering information on their accounts, but not showing their activities and losses on the balance sheet. Some of their assets and profits were not accurate and in some cases did not exist. The books did not show their losses and debts. They were put into entities that were offshore. The case of Worldcom is also similar to that of Enron. They changed the financial books and the executives of the company
Jaya Daniel
Fin 486
Prof. Richard Monahan
March 2, 2015
When one starts a company or organization, there are many aspects of that business that need to be sorted. One important aspect of any workplace is the environment and standard of work that needs to be established. This is important for employees to understand what is expected of them. It sets the tone of what behavior is acceptable and what will not be tolerated. It is up to management to ensure the business ethics are established and explained to the employees. It is also important that they show their employees what these standards are by setting an example. When executives and management lead by example, it produces a healthy work environment where the employees are encouraged to act in such a manner. If they (management) engage in unethical and illegal behavior, it sets the tone for a negative work environment that is not healthy for anyone who is employed there. There are examples of companies where management engaged in illegal behavior and the end result was they hurt the company as well as all those who worked for the company. Enron and Worldcom executives ran their business into the ground by lying to their employees as well as those around them who thought the companies were doing very well. Enron was considered a very strong company. At one point, they were named America’s most innovative company. One mistake Enron made was they were changing their financial accounts to show they were more profitable than they were. The were entering information on their accounts, but not showing their activities and losses on the balance sheet. Some of their assets and profits were not accurate and in some cases did not exist. The books did not show their losses and debts. They were put into entities that were offshore. The case of Worldcom is also similar to that of Enron. They changed the financial books and the executives of the company
References: Folger, Jean (2011). The Enron Collapse: A Look Back. Investopedia. Retrieved on February 19, 2015 from http://www.investopedia.com/financial-edge/1211/the-enron-collapse-a-look-back.aspx Lezner, Robert (2013). 5 Most Publicized Ethics Violations By CEOs. Forbes. Retrieved on February 19, 2015 from http://www.forbes.com/sites/investopedia/2013/02/05/5-most-publicized-ethics-violations-by-ceos/