4 Ethical Issues with Enron

Topics: Enron, Finance, Enron scandal Pages: 3 (1015 words) Published: November 5, 2011
There was a vast number of ethical issues raised in the movie “Enron-the Smartest Guys in the Room” but the four I am going to focus on are listed below. Art Anderson, Ken Lay and all of the other executives did a number of unethical things which ultimately brought down Enron and affected thousands of employees and their futures. The bottom line was that each and every one of them acted out of greed for the almighty dollar.

1- Encouraging employees to invest and buy stock in Enron when they knew the truth about the lack of value in the stock.

As an employee you trust in your management to make the best choices both for you and for the business to succeed. Ken Lay and other executives strongly encouraged Enron employees to invest in it’s stock. They all knew that the company was not doing well and yet they encouraged others to spend their hard earned money investing in it all the while they are selling their shares of stock. Employees trusted and relied on their decisions and in the end it ended up hurting them.

With Ken Lay publicly encouraging its employees and other investors to invest in Enron’s stock he is affecting their future and retirement. These employees didn’t earn nearly as much as he did and he is convincing them to invest their money into an entity that was set to fail by Lay himself. I don’t believe any proper ethical alternative action could have been taken in this situation. Of course you want your employees to have faith in the company they work for and the VP’s aren’t going to encourage their employees to invest elsewhere, but Lay shouldn’t have encouraged and pushed as hard as he did all the while knowing that the stock wasn’t worth anything. This effect is a prime example of how the rich are a separate entity from the rest of us. While Lay and other high level executives weren’t hurt by their decisions, the rest of the employees lives were completely turned upside down.

2- Bribing analysts to give Enron good ratings.

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