Since the fall of the Enron Empire we have witnessed many instances of “big business” failures in the public and private sector. For example, there are the recent government bailouts of entities such as AIG, Fannie Mae and Freddy Mac. There was the collapse of Countrywide Financial, Lehman Brothers, and Bearn Sterns. And, of course, we cannot forget Bernie Madoff – the person responsible for bilking thousands of investors of billions of dollars. There is a common thread between all of these examples – the systematic failure to adhere to a code of conduct and business ethics. I will discuss several possible explanations for the exponential growth and spread of Enron’s toxic corporate culture, what role individual and business ethics played in Enron’s recidivation, and how that culture was to blame for Enron’s demise.
Enron is perhaps the most analyzed modern day business failure. One has to question why Enron failed when it was touted by Fortune magazine as America’s “most innovative” company for five years running from 1997 to 2001 (McClain & Elkin, 2006) and had reported earnings in 2000 of $979Million (Ackman, 2002). Enron received accolades from the business press and financial analysts alike. “[t]he business community rewarded Enron for its cleverness (and even its ethicalness)…” (Sims and Brinkmann, 2003).
How then did Enron go from “an excellent corporate citizen, with all the corporate social responsibility (CSR) and business ethics tools and status symbols in place” (Sims and Brinkmann, 2003) to a business in the throes of bankruptcy with its top executives indicted for money laundering, insider trading, and conspiracy, among other crimes? Simply stated, it was the unethical conduct of Enron’s top executives which destined it for failure. These top executives created a culture that was the fundamental enabling mechanism that allowed the widespread practice of unethical and illegal behavior based on self-interest (Bryce, 2003;... [continues]
Enron is perhaps the most analyzed modern day business failure. One has to question why Enron failed when it was touted by Fortune magazine as America’s “most innovative” company for five years running from 1997 to 2001 (McClain & Elkin, 2006) and had reported earnings in 2000 of $979Million (Ackman, 2002). Enron received accolades from the business press and financial analysts alike. “[t]he business community rewarded Enron for its cleverness (and even its ethicalness)…” (Sims and Brinkmann, 2003).
How then did Enron go from “an excellent corporate citizen, with all the corporate social responsibility (CSR) and business ethics tools and status symbols in place” (Sims and Brinkmann, 2003) to a business in the throes of bankruptcy with its top executives indicted for money laundering, insider trading, and conspiracy, among other crimes? Simply stated, it was the unethical conduct of Enron’s top executives which destined it for failure. These top executives created a culture that was the fundamental enabling mechanism that allowed the widespread practice of unethical and illegal behavior based on self-interest (Bryce, 2003;... [continues]
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