Organizational Ethics Issues Resolution

Paper Summary:

The paper discusses how the Enron debacle that occurred in late 2001 illustrated how an ethically unsound business can have devastating and widespread effects on the international business community. The paper continues and reiterates that the reason for the collapse of Enron was an absence of ideation and practice of ethical values. Market failure occurred due to information asymmetries, in which unfairness of the imbalance exceeded simple competitive advantage, while compromising the rights of others. The paper states that six ethical decision-making steps can be applied to the organizational ethics issue of Enron in order to further understand the process involved in solving ethical issues.

Outline:
Issue Clarification
Stakeholder Analysis
Values Identification
Issue Resolution
Addressing Objections
Resolution Implementation

From the Paper:

"The collapse of Enron at the end of 2001 resulted in the second largest corporate bankruptcy in American history to date. The fraudulent practices of Enron executives resulted in stakeholder betrayals (Petrick & Scherer, 2003). Stakeholders were deceived by Enron executives, betrayals which contravene any ethical code. This choice among Enron executives to betray stakeholders in order to promote short term financial gain resulted in the destruction of their own personal and business reputations, exposure to the possibility of criminal and civil prosecution, as well as bankruptcy. Stakeholders, including institutional and individual investors, were misinformed regarding the financial stability of Enron due to fraudulent accounting practices, and this resulted in a loss of millions of dollars. Secondary and tertiary stakeholders were also negatively affected by the Enron scandal. For example, Enron executives placed pressure on accounting and law firms to partake in unethical practices in order to accrue short term, temporary gain."

Sample of Sources Used:

• Berenbeim, R.E. (2002). The Enron ethics breakdown. Executive Action, 15.
• Petrick, J.A., Scherer, R.F. (2003). The Enron scandal and the neglect of management integrity capacity. Mid-American Journal of Business, 18(1), 37-49.
• Sims, R.R., Brinkmann, J. (2003). Enron ethics (or: culture matters more than codes). Journal of Business Ethics, 45, 243-56.

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