Case Analysis: Enron’s Ethics Policies

Creating and evaluating ethics programs is a crucial component of a strong ethical corporate culture. Without a focus on the creation of an ethics program that allows a healthy ethical culture to develop, the ability of individuals to behave ethically is often severely damaged. Understanding a strong ethics program that supports ethical behavior requires that we first evaluate companies that have failed spectacularly. Perhaps one of the most well known corporate failures related to unethical behavior is Enron.

Enron is interesting for several reasons. First, the organization had a very well-written ethics policy that espoused ethics as an important and valued part of their corporate culture. However, the unethical behavior that was rampant within the company clearly illustrates the need to embed into the culture an ethics program based on the espoused ethics policies. Second, the unethical behavior became embedded in all levels within the organization.

View:

• ABC News. (2011, February 28). A cautionary tale [Video file]
  Retrieved from https://www.youtube.com/watch?v=zSt9Ovt9ksY

Read:

• Sims, R., & Brinkman, J. (2003). Enron ethics (Or: Culture matters more than codes). Journal of Business Ethics, 45(3), 243-256.

Using your text, the readings from this module, and at least three additional resources, evaluate Enron’s corporate ethics policies, ethics programs (if any existed), and corporate culture.

Consider the following questions in your case analysis:

• What cultural elements within Enron supported unethical behavior?
• Imagine that the company survived the scandal. What changes would have to be made to the ethics program to shift the corporate culture to one that valued ethical behavior?
• Based on what you have learned from this case, how would you evaluate a company’s ethics program? Make sure that you use what you have learned from ethics theories and the material throughout the course to support your argument. Be specific in the conclusion and recommendations section of your paper.

Develop your case analysis using the five following sections:

Section 1: Introduction and situational analysis: Describe the ethical dilemma, giving appropriate background information. The term “dilemma” implies that there are pros and cons to various options, even if some are clearly more socially acceptable than others. This is also where you do your situational analysis – identifying factors related to the individual(s) involved (consider the readings from this module), company and managerial practices and policies, external factors such as economic pressure, and any other aspects of the situation that you believe helped create the dilemma.

Section 2: Stakeholder analysis: Identify the key stakeholders and how they are potentially impacted by the various options inherent in the dilemma.

Section 3: Analysis based on ethical theories: Analyze the ethical dilemma from the perspective of cultural relativism (how it relates to cultural norms – what society would view as acceptable, as well as what is legal), teleology (looking at consequences and acting for the greater good), deontology (duties and principles), and virtue.

Note that stakeholder analysis is particularly pertinent to the consequentialist approach, and that one of the challenges is estimating positive and negative impacts on relevant stakeholders. Do the best you can, looking at both good and bad consequences for each stakeholder group. Make sure you summarize the overall situation and come to a conclusion about the greater good.

Section 4: Conclusion and recommendations. Up to now, you have been analyzing and comparing options. Here is where you pull together the different threads of your analysis and determine whether or not the company did the right thing. Also, make recommendations about what the company should have done. Make sure your justifications clearly flow from your analysis. Make managerial and policy recommendations that would help avoid similar ethical dilemmas in the future and provide guidance to help those facing a similar dilemma.

Section 5: References. List at least three sources (in addition to the Dowie’s article and your text) where you located additional information about the company and the associated ethical dilemma(s).

General guidance: Include a title page, and label the five sections. Your paper should be 2-3 pages in length, not including the title and reference pages. All citations should be in APA 6th Edition format. Double space your paper, use Times New Roman, 12-point font, with one inch margins. For more information, link to APA Tip Sheet, 6th ed.[PDF file size 177 KB]

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