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ENRON ACCOUNTING FAILURE AND ETHICAL ISSUES Once the world's most innovative company for six years running and boasting $100 billion in revenue during the year 2000, Enron appeared to be a corporation at the dawn of a new generation of firms built on innovation, technology, and an ambition to be the smartest guys in the room. Want to add some juice to your work? They usually don’t have the tendency to challenge top management. He was described as an aggressive gambler who valued risk taking and boosting the company’s stock price above all. BUL 4310 Fall 2017. According to the Texas State Historical, Enron's Ethical Dilemma: That’ll help you to understand even the minutes of the Enron Case Study. ENRON ACCOUNTING FAILURE AND ETHICAL ISSUES II. He was also highly philanthropic in the Houston community as well as within his company. Gibney, A. it took Enron 16 years to go from about $10 billion of assets to $65 billion of assets, and 24 days to go bankruptcy. ENRON ACCOUNTING FAILURE AND ETHICAL ISSUES 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. They always strived for the best. Subject: Air Suspension System. The Enron Jeffrey Skilling and Ken Lay knew was one they kept to themselves and a few chosen colleagues. 55. It’s was a textbook version of what can go wrong in an organization that lacks a true culture of ethical standards. The thing I liked most about this documentary was the fact that it focused on the guys at the top, the self-proclaimed "smartest men in the room", the so-called geniuses who knew the energy business so much better than the rest of the industry. Download for Free . A hypocritical leader talks persistently about integrity and ethical values but then engages in unethical conduct, encourages others to do so either explicitly or implicitly. Investors. The movie entitled “ENRON: Smartest Guys in The Room is based on a book with the same title written by Bethany Mclean and Peter Elkind. This could be Enron 2.0. Corporate Values, Workplace Decisions and Ethical Standards of Employees, Journal of Managerial Issues, 20(1), 68-87. Enron is an example of corporations that have faced bankruptcy in the recent past because of the numerous problems it had with federal and state governments for manipulation of financial statements. At over $60 billion being scammed away from the public, they were the biggest fraud in history. Get Custom Essay. It included Kenneth Lay: Chairman, and Chief executive officer, Jeffrey Skilling: President, Chief operating officer, and CEO (February–August 2001), and Andrew Fastow: Chief financial officer. In some ways, the culture of Enron was the primary cause of the collapse. On February 12, 2001, Skilling was named CEO of Enron, receiving $132 million in a single year. and secondary groups of community. There are so many things that went wrong within the organization, from all personal (prescriptive and psychological approaches), managerial (group norms, reward system, etc. Multiple ethical selves can explain best Ken Lay role in the Enron case. Our customer support team is available Monday-Friday 9am-5pm EST. Organizations or companies, which operate in the corporate realm, are bound and regulated by corporate ethics and values. 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. Enron: The Smartest Guys in the Room should be viewed as a cautionary tale. Merrill Lynch’s main focus should have been their employees and their investors, not solely Enron. Don't Miss a Chance to Connect With Experts. He surely knew how to lead an organization by setting the tone by the example of his own conduct. ENRON ACCOUNTING FAILURE AND ETHICAL ISSUES That’ll help you to understand even the minutes of the Enron Case Study. However, at the same time, decision to go against the laws meant those leaders were gambling with their business, which is a high external locus of control behavior. Corporate Facts and History This paper will focus on the business ethics issues at Enron that were raised from the documentation Enron: The Smartest Guys in the Room, from cognitive moral development to group norms, etc. 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. This paper will focus on the business ethics issues at Enron that were raised from the documentation Enron: The Smartest Guys in the Room, from cognitive moral development to group norms, etc. The rest of the world saw a global oil company on the cutting edge of its business and paving a path that other American firms could follow. In its trail, investors were getting rich, employees found reward and satisfaction, and the community it called home thought it, The Enron Accounting Scandal of 2001 Once people were hired, it was an “up-or-out” culture. In this video we take a look at the Enron story. Using ENRON: The Smartest Guys in the Room as a live case illustration of financial concepts and ethical issues. That brings in the ethical issue of conflicts of interest, one of key problems at Enron. Despite this great personality, Lay had another self. 717 (2 pages) Downloads. Enron Corporation was an energy company running out of Texas that was started when two companies, Houston Natural Gas and InterNorth, merged together in 1985. Enron: The smartest guys in the room … MBA 6070X Unfortunately, he chose to set bad examples. It's Free! The emphasis is on human drama, from suicide to 20,000 people sacked: the personalities of Ken Lay (with Falwellesque rectitude), Jeff Skilling (he of big ideas), Lou Pai (gone with $250 M), and Andy Fastow (the dark prince) dominate. Even Watkins, the whistleblower, described Lay as a man of integrity. One of the most striking scenes in Bethany McLean and Peter Elkind’s Enron expose The Smartest Guys in the Room details the courtroom testimony of Kenneth Lay and Jeff Skilling during their criminal trial. The company’s stakeholders include primary groups of customers, employees, shareholders, owners, suppliers, etc. They consider themselves representatives of the shareholders only, and not of the employees. Psychological Approach – Cognitive Moral Development (Appendix 1) and Locus of Control Applying Kohlberg’s Cognitive Moral Development (CMD) to Enron key executives, I think they all were struggling in Conventional level, between stages Three and Four. Enron: The Smartest Guys In The Room. From my observation from the documentation, these smartest men were too confident about themselves. People do what’s rewarded and avoid what’s punished. This scandal demonstrates the need for significant reforms in accounting and corporate governance in the United States, as well as for a close look at the ethical quality of the culture of business generally and of business corporations in the United States. This paper will focus on the business ethics issues at Enron that were raised from the documentation Enron: The Smartest Guys in the Room, from cognitive moral development to group norms, etc. Lecturer: DR SITI ZELEHA ABDUL RASHID Being said that, the corporation owes all stakeholders the obligations to meet their interests. She knew deeply that Enron accounting activities were wrong and couldn’t stand the facts that the company was deceiving its investors. Check out other papers written by Elizabeth: Ethical Issues In Enron The Smartest Guys In The Room. Ethical Issues in Business and Society Professor Franklin Bridge IDIS 302.004 Take Home Assignment – Enron: The Smartest Guys in the Room Instructions: Write a few sentences or more on each of the following questions. If you need this or any other sample, we can send it to you via email. 301 certified writers online Buyers of energy also benefited because Enron could ensure the supply of energy. 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. That single image calls up multiple meanings: faith fronting business; terrible irony; a real need for salvation. Inhaltsangabe: Dokumentation über die Pleite des Energiekonzerns Enron… This text is available online and is used for guidance and inspiration. 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