Ethical Policies of Enron

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This paper's main objective is to examine the Enron Corporation situation. This is a company founded in 1985 with its registered office in Houston, Texas. The business primarily dealt with energy and commodity production (Rhode & Paton, 2002). In the beginning it was founded as a result of the merger of two companies into one: InterNorth and Natural Gas. There are several reasons or dilemmas that might make Enron collapse (Seeger & Ulmer, 2003). After conducting a thorough analysis about the Company, I was able to find out that there are at least three situational dilemmas that contributed to its breakdown. This situational dilemmas can be categorized as a result of wrong systemic factors, poor organizational and personal influences/decisions.


As discussed above, Enron became a great Company after merging with several other Companies. Other key Stakeholders that contributed to Enron’s Ethical dilemma include the executive management; this management is solely responsible for making wrong decisions and moves that led to Enron falling down (Bowen & Heath, 2005). Some of the employees were also evil minded and were determined with so much zeal to destroy the Company; this group of employees went as far as influencing the other good employees. The third party that contributed to the Enron’s instability were the third parties that affiliated with the Company; this Companies include the international accounting firm and the InterNorth Corporation. This group of stakeholders contributed to Enron’s dilemmas one way or another.


Under this sub topic of the Paper, a detailed but brief analysis will be presented about the ethical dilemma that the Company faces based on the cultural relativism perspectives and how they relate to cultural norms, teleology and deontology (Rhode & Paton, 2002). Cultural norms can be defined as values that a society would view as acceptable or legal, teleology refers at looking at the consequences and acting for the greater good while deontology refers to comparing the principles and duties of each individual involved as well as their virtues (Wess, 2014). In reference to the cultural norms, it is evident that the Company was not working according to the societal expectations. This was the main reason as to why there was no transparency and auditing within the corporation. A majority of the Company’s decisions were kept secret from the public.

There was also lack of honesty and analysis on the duties and virtues of different stakeholders in the Company. This was the main reason that led to the collapse of the Enron Company. Employees, the Executive management and third party affiliates did not have anyone who monitored them; consequently, this contributed to the freedom of the stakeholders which later led to the breakdown of the Company. Despite the fact that the stakeholders are conditioned to make decisions that are based on the greater good of the Company and the Society. It is evident that the Stakeholder’s at Enron were not concerned at the Company’s operations and the direction that it was heading to. A majority of the stakeholders also lacked morals in reference to their principles and duties.


In conclusion, despite the fact that Enron Company had strict but legal measures based on ethics it is safe to say the fact that the auditing Company was responsible for the breakdown in the Company. This system was not able to identify and spot any fraudulent activities. The Stakeholders also failed since they did not put the Company’s considerations first. Generally; the main reasons that made the Company to fall down was because of poor auditing systems and an unwilling stakeholder support system.


Bowen, S. A., & Heath, R. L. (2005). Issues management, systems, and rhetoric: Exploring the distinction between ethical and legal guidelines at Enron. Journal of Public Affairs, 5(2), 84-98.

Rhode, D. L., & Paton, P. D. (2002). Lawyers, Ethics, and Enron. Stan. JL Bus. & Fin., 8, 9.

Seeger, M. W., & Ulmer, R. R. (2003). Explaining Enron: Communication and responsible leadership. Management Communication Quarterly, 17(1), 58-84.

Weiss, J. W. (2014). Business ethics: A stakeholder and issues management approach. Berrett-Koehler Publishers.

August 31, 2021

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