Organizational Justice, Ethics, and Social Responsibility
Chapter discussed Organizational Justice, Ethics, and Social Responsibility. While watching CNBC on television, I viewed a documentary on the energy company Enron. Their practices and ethics, or lack thereof are an excellent example of the topics contained in this chapter. Their disregard for ethical behavior and social responsibility, ultimately led to the demise of the company and also caused several members of the company in management positions to be brought to justice in the court systems. Enron was a energy company that was seemingly very profitable, ethical, and successful, as was reflected in their stock price. However, there was a great deal of information withheld from the stockholders and the public, that was evidence of their unethical and deceptive practices.
First, Enron was withholding information from stockholders and the general public with regards to their financial statements and positions. Besides being an unethical practice, it is a good example of informational justice. Enron was hiding debts and making transactions with other companies, primarily banks and investment banking companies, that were allowing them to seem profitable on paper, although they were not. There were many companies that were participating in these transactions with Enron, and these companies were making loans or buying assets from Enron, and Enron’s financial statements showed these transactions as revenue, when they were actually debts. They even created companies to make transactions with, that allowed the other, such as Merrill Lynch, to essentially make bets on Enron’s stock prices and profitability. These transactions were appealing to other companies, because Enron basically allowed them to “bet” using Enron’s chips. It was a very deceitful and unethical practice that misled the general public as well as Enron’s stockholders. Financial positions and revenue weren’t accurately described in their...
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