Case Study Business Ethics

Business Ethics: Enron Case Study
Introduction
Enron was a very powerful company that was doing very well in the market. The value of its share was high and the company was enjoying an overall healthy position as a business. The employees were happy and new recruits would have killed to get a job at Enron. However, this was not to last. Enron enjoyed so much success that it got to its head and it started making all sorts of problems. Enron decided to change its organizational structure by employing new people at high posts who were given the opportunity to make big decisions that could directly affect the organization. Thus, their organizational design was altered. The reward system within the organization was also changed since the top performers were given the opportunity to receive many bonuses and stocks options. This new system was to be controlled by an internal controlling authority but this did not work well because the people who were reviewing and those who were being reviewed were working on the same levels and this caused them to form alliances among themselves. They all ‘looked out’ for each other and were not honest with their reviews, and everyone was given good reviews. Employees were scared to do something that would anger their superior and this is why they all became ‘yes men.’ This created a very unstable culture that was based on dishonesty and this caused Enron’s downfall.

Division of Workers and Executives: The Culture at Enron
Enron’s earlier organizational structure was different and it based its ideas on constructivism, where the employees were encouraged to achieve more. But the new system failed because it gave too much authority to the new and young managers. These people did not really have any close ties with the company and were given a lot of power before they could become aware of the core company values and norms. The employees were not given sound guidance and this led them to make many wrong decisions that cost the... [continues]

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