The collapse of Enron Corporation an American energy, commodities and services based Company in Houston, Texas reinforces why unethical business practices are not the foundation for an enduring and sustainable enterprise. Good business practices is rewarding because it builds sustainable company, trust, integrity and organizational growth. In the article Enron ethics: Culture matters more than codes, reminded us that before the scandal, Enron appeared to have the best organization tools economically and ethically. The propaganda of Enron as a model of excellence of corporate responsibility and business ethics and the reality of unethical business practices in the world of finance soon ensues.
Enron’s fall from grace as one of American’s largest corporation affected the lives of employees, investors and retirees. The scandal was a fraud and a corruption scheme where some top executives where a able to profit millions of dollars eroding the live-savings of all other stakeholders.
Enron’s former President and Chief Executive officer (CEO) Jeffrey Skilling cultivated a culture that rewarded cleverness and that would push limits at any cost. He was noted to have encouraged employees to be independent, innovative and aggressive. The Harvard Business Review Case Study: Enron’s Transformation (Bartlett and Glinska, 2001) contains employee quotations such as ". . . you were expected to perform to a standard that was continually being raised . . .", "the only thing that mattered was adding value", or ". . . it was all about an atmosphere of deliberately breaking the rules . . ." (Bartlett and Glinska, 2001). A culture that admires innovation and unchecked ambition and publicly punishes poor performance can produce tremendous returns in the short run. However, in the long run, achieving additional value by constantly "upping the ante" becomes harder and harder. Employees are forced to stretch the rules further and further until the limits of...
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