Unethical Business Practice-a Case Study of the Downfall of Two Major Companies
Running head: Unethical Business Practices 1
Unethical Business Practices:
A Case Study of the Downfall of
Two Major Corporations
Sharon Purpuro
New Jersey City University
Unethical Business Practices 2
Abstract
The following pages will tell the story of how two very successful companies met their
downfalls at the hands of some very greedy top executives and boards of trustees that
chose to look the other way all because of one common denominator - greed. The
tremendous pressure by stockholders and board members that is put upon companies and the executives that run them to out-perform the competition in an extremely competitive global marketplace can influence top executives and some board members to participate in unethical practices.
Keywords: downfall, ethics, greed.
Unethical Business Practices 3
In the late 1990’s and early 2000’s, Enron and WorldCom seemed to be on the top of the ‘business’ world. Wall Street was singing their praises, stockholders and employees were giddy with excitement about how much money their companies were making, and top executives and other key players got ridiculously rich. But in a few short years, the façade would come tumbling down for each of these companies and the world would see how unethical behavior and greed destroyed Enron and WorldCom. Knowing what is morally acceptable, the difference between right and wrong, good and bad, and doing the right/good thing when it is very tempting to do the wrong/bad thing defines ethical behavior. Business ethics does not have a special set of rules that differ from ethics in general. As defined in text book, Management – Challenges for Tomorrow’s Leaders, “business ethics is the application of the general ethical rules to business behavior” (Lewis, Goodman & Fundt, 2004, p. 25). The stress that corporate leaders feel to outperform their competitors can possibly lead a once moral, ethical person to
Unethical Business Practices:
A Case Study of the Downfall of
Two Major Corporations
Sharon Purpuro
New Jersey City University
Unethical Business Practices 2
Abstract
The following pages will tell the story of how two very successful companies met their
downfalls at the hands of some very greedy top executives and boards of trustees that
chose to look the other way all because of one common denominator - greed. The
tremendous pressure by stockholders and board members that is put upon companies and the executives that run them to out-perform the competition in an extremely competitive global marketplace can influence top executives and some board members to participate in unethical practices.
Keywords: downfall, ethics, greed.
Unethical Business Practices 3
In the late 1990’s and early 2000’s, Enron and WorldCom seemed to be on the top of the ‘business’ world. Wall Street was singing their praises, stockholders and employees were giddy with excitement about how much money their companies were making, and top executives and other key players got ridiculously rich. But in a few short years, the façade would come tumbling down for each of these companies and the world would see how unethical behavior and greed destroyed Enron and WorldCom. Knowing what is morally acceptable, the difference between right and wrong, good and bad, and doing the right/good thing when it is very tempting to do the wrong/bad thing defines ethical behavior. Business ethics does not have a special set of rules that differ from ethics in general. As defined in text book, Management – Challenges for Tomorrow’s Leaders, “business ethics is the application of the general ethical rules to business behavior” (Lewis, Goodman & Fundt, 2004, p. 25). The stress that corporate leaders feel to outperform their competitors can possibly lead a once moral, ethical person to
References: Crover, B., (2002). Anatomy of Greed: The Unshredded Truth from an Enron Insider. Hamilton, S., & Micklethwait, A. (2006). Greed and Corporate Failure – The Lessons from Recent Disasters Lewis, P., Goodman, S., & Fundt, P., (2004). Management - Challenges for Tomorrow’s Business Leaders Murphy, KK. & Barrionvevo, A. (2006, September 26) Fastow Sentenced to Six Years. New York Times, pg. 1. Retrieved April 21, 2010 from NYTimes.com/2006/09/27/business/ 27enron.htlm. Newton, L. (2008). Taking Sides – Clashing Views in Business Ethics and Society. New York: McGraw Hill Pasha, S. (2006, July 7) Enron Founder Ken Lay Dies. CNN Money. Retrieved April 21, 2010 from CNNMoney.com/2006/07/05/news/newsmakers/lay_death/index.htm Swaratz, M. (2003). Power & Failure – The Inside Story of the Collapse of Enron. New York: Random House