Analysis Of Enron, Ethics And Organizational Culture

Jennifer Lee Serna
MGMT 3362- 90L
Enron, Ethics, and Organizational Culture
04/15/2016
Introduction
Enron Corporation was based in Houston, Texas and participated in the wholesale exchange of American energy and commodities (ex. electricity and natural gas). Enron found itself in the middle of a very public accounting fraud scandal in the early 2000s. The corruption of Enron’s CFO and top executives bring to question their ethics and ethical culture of the company. Additionally, examining Enron ethics, their organization culture, will help to determine how their criminal acts could have been prevented.
Questions and Answers
Based on what you read in this chapter, summarize in one page or less how you would explain Enron’s ethical meltdown.

If true, what does that say about Enron’s ethical culture? “Signals that mold a company’s organizational culture include characteristics values, traditions, and behaviors a company’s employees share.” (Dessler. Pg. 466) Enron was once known for having very high ethical standards in which it prided itself on and displayed to the world. However, with irresponsible executives and personal greed the environment rapidly transformed like an infectious disease. For example, “bad barrels” correlation, companies that promote an “everyone for himself” atmosphere are more likely to suffer unethical decisions.” (Dessler, pg.464) Enron Company values became full of corruption, deceit, and inattentive financial transactions. Once Enron was exposed for the accounting fraud scandal of their financial statements. There no longer preserved any ethical conduct or values within the organizational culture. All of this could be a combination of self-greed from top leadership, and company pressure to make Enron look like a sustainable

What role do you think culture played at Enron? Give five specific examples of things Enron’s CEO could have done to create a healthy ethical culture. It has been stated that ethical culture can be measured by the following key attributes. “Employees must feel a sense of responsibility, and accountability for their actions and the actions of their peers. Employees must feel secure enough to raise issues, and concerns freely without fear of retaliation. Most importantly managers must lead by example, and model the behaviors that they demand from their employees.” (Dessler, pg.489) The following are examples, of things Enron’s CEO could have done to promote a strong ethical culture. First there must be a checks and balance system put in motion. For example, Office of Inspector General sole purpose is, “OIG’s mission is to (1) conduct and manage independent audit, evaluations, and investigations concerning Agency programs; (2) prevent and detect against Agency fraud, waste, and abuse; and (3) promote economy and efficiency, and effectiveness in Agency programs and operations.” (EEOC, OIG Semiannual report to Congress) “OIG is conducting ongoing investigations in several field offices involving prohibited personnel practices, ethics violations, conflicts of interest, time and attendance fraud, falsification of government records, misuse of government vehicles,