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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