Wise Decision: Sherron Watkins Letter to Kenneth Lay

801 Words2 Pages
bulb-icon

Recommended: Describe the organizational culture of Enron

1. What risks did Sherron Watkins take by writing the six-page letter to Kenneth Lay? Do you believe she should have written the letter? Why or why not?

Sherron Watkins takes a lot of risk when she decides to write a six-page letter to Kenneth Lay. She puts her jobs as well as personal and family safety at risk. This is because she may be fired, sued, blacklisted, arrested, threatened, or even assaulted or killed by Kenneth Lay and other top executives who responsible for Enron’s collapse. For instance, if she get fired, it is hard for her to find another employment because the other employers may be in doubt on her capabilities as she get fired from Enron, the “America’s Most Innovative Company” as named by Fortune for six consecutive year. Thus, during the decision-making process, it can be a financial and emotional hardship for Sherron Watkins.

However, we do believe that she should have written the letter. As what Sherron Watkins said in one of the interviews, “If your values are being challenged, get out, because you cannot change an unethical corporation unless you are at the very top. Pay attention to rationalizations.” The famous rationalization at Enron was, “What do we have accounting rules in this country for, if you do not use them.” Enron has the obligation to comply with the underlying principles in the accounting rules and when Enron break the rules, there must be someone who comes out to report or correct the mistakes in order to save countless lives and billions of dollars in public funds and prevent the disasters from worsening.

Furthermore, Sherron Watkins as vice president for corporate development of Enron shall adhere to Enron’s ethics code which based on respect, integrity, communication, and excellence. ...

... middle of paper ...

...some pointed out that Watkins never really blew a whistle by just sending a memo to the bank robber suggesting him to stop, but according to the meaning of whistle blower, he or she could make their accusation internally. That was what Watkins had done. She exposed the top officials’ frauds and tried to persuade and suggested them to make changes by make a way to quietly and quickly reverse and write down the transactions. Even though Watkins carried the ways to make allegations internally, but she still did the right things by reminding the tops on their illegal activities. As to is, Watkins had right to be worry and become concern on the Enron’s current situation at that time. She was one of their employees and of course she would worried in the things that involving her future. So, Watkins was a whistle blower who tried to expose Enron’s corruption internally.

Show More
Related

  • Talia's Letter Summary

    1029 Words  | 3 Pages

    A. What is Talia’s purpose in writing this letter? Do you believe she achieves her purpose

    Read More

  • A Corporate Code of Ethics is Not Enough

    2353 Words  | 5 Pages

    Investors and the media once considered Enron to be the company of the future. The company had detailed code of ethics and powerful front men like Kenneth Lay, who is the son of a Baptist minister and whose own son was studying to enter the ministry (Flynt 1). Unfortunately the Enron board waived the company’s own ethic code requirements to allow the company’s Chief Financial Officer to serve as a general partner for the partnership that Enron was using as a conduit for much of its business. They also allowed discrepancies of millions of dollars. It was not until whistleblower Sherron S. Watkins stepped forward that the deceit began to unravel. Enron finally declared bankruptcy on December 2, 2001, leaving employees with out jobs or money.

    Read More

  • The Corporate Culture In Enron's Case

    436 Words  | 1 Pages

    The CFO, Andrew Fastow, systematically falsified there earnings by moving company losses off book and only reporting earnings, which led to Enron’s bankruptcy. Any safeguards or mechanisms that were in place to catch unethical behavior were thrown out the window when the corporate culture became a situation where every person was looking out for their own best interests. There were a select few employees that tried to get in front of the unethical accounting practices, but they were pushed aside and silenced. The corporate culture at Enron became a place where if an employee would not make unethical decisions then they would be terminated and the next person that would make those unethical decisions would replace them. Enron executives had no conscience or they would have cared for the people they ended up hurting. At one time, Enron probably was a growing company that had potential to make a difference, but because their lack of social responsibility and their excessive greed the company became known for the negative affects it had on society rather than the potential positive ones it could have had. Enron’s coercive power created fear amongst the employees, which created a corporate culture that drove everyone to make unethical decisions and eventually led to the downfall and bankruptcy of

    Read More

  • Analysis Of The Collapse Of Enron

    761 Words  | 2 Pages

    Skilling then hired Andrew Fastow to cover the holes in Enron’s finances and make the company look profitable. Fastow found a loop hole to cover Enron’s debt, amounting over $30 billion by using special purpose entities by liabilities to subsidiary firms like well-known banks. Therefore, the banks knew what was going on also, and loaned money to Enron. Enron used the money to reward their employees “bonuses”. To meet Enron’s high demands of profits, Enron’s employees would falsify an energy shortage in California that started to profit Enron, however, made California in a $30 billion debt. After Bethany Mclean published “Is Enron Overpriced?”, the troubles at Enron started to become public because Skilling aggressively bullied Mclean over the question “How exactly does Enron make money”. It was not too long when Enron’s stocks started to decline and Skilling resigned because of a “personal matter”. Kenneth Lay became CEO again and tried to reassure his employees and investors that the business was doing good, but in reality, the employees lost their 401k funds in Enron’s stock. Then in 2001 Enron declared bankruptcy and tried to blame Fastow for the

    Read More

  • The Assassination Of John Kennedy

    1748 Words  | 4 Pages

    ... president. She said that she wanted all the information released because she thought the Warren Commission could not find the real reason behind Kennedy’s assassination. There is plenty of evidence out there that shows that the Warren Report was false and not truthfully put together.

    Read More

  • After Cliff Baxter

    605 Words  | 2 Pages

    I believe that Enron’s top executives, mainly Lay and Skilling, are mainly to blame for the Enron collapse. Lay and Skilling were surely able to lead an effective and efficient company, but they lacked self- control and let their greed get the best of them. They encouraged a competitive environment that, a survival of the fittest mentality, causing employees to constantly worried about their j...

    Read More

  • The Virtuous Manager

    1642 Words  | 4 Pages

    Enron was the model for rapid growth in the 1990’s but part of the culture and ethics of Enron was disturbing. Falsified documents, cutthroat competitiveness among employees and accounting schemes that hid the truth of the company’s indebtedness were just a few examples of the lack of business ethics within the organization. Perhaps a more virtuous management team could have saved Enron from collapse.

    Read More

  • Enron: The Smartest Guys in the Room

    1884 Words  | 4 Pages

    The three main crooks Chairman Ken Lay, CEO Jeff Skilling, and CFO Andrew Fastow, are as off the rack as they come. Fastow was skimming from Enron by ripping off the con artists who showed him how to steal, by hiding Enron debt in dummy corporations, and getting rich off of it. Opportunity theory is ever present because since this scam was done once without penalty, it was done plenty of more times with ease. Skilling however, was the typical amoral nerd, with delusions of grandeur, who wanted to mess around with others because he was ridiculed as a kid, implementing an absurd rank and yank policy that led to employees grading each other, with the lowest graded people being fired. Structural humiliation played a direct role in shaping Skilling's thoughts and future actions. This did not mean the worst employees were fired, only the least popular, or those who were not afraid to tell the truth. Thus, the corrupt culture of Enron was born. At one point, in an inter...

    Read More

  • Worldcom Case Study

    1575 Words  | 4 Pages

    Although many of her actions were parallel with fellow manager in General Accounting Troy Nordmand’s, he did not receive a prison sentence due to the fact that he attempted to leave the company (although Vinson did initially plan to resign). Conversely, Vinson was sentenced to five months in prison and five months of home detention. One particularly interesting aspect of Betty Vinson’s case is the inclusion of her concerns over taking home pay and having health insurance, in addition to the fact that she had a positive reputation and was known for doing “anything you told her”. While it is normal to have concerns over job security, the emotional appeals in her situation add a different side to the story. One could argue that she is a victim -- she could have been targeted due to her reputation, or that fear drove her to do things she otherwise would not have considered. The issue here, however, is that she facilitated the fulfillment of Sullivan’s requests and pleaded guilty to one count of securities fraud and one count of conspiracy to commit securities fraud. As far as the case specifies, despite any superior’s knowledge of Vinson’s tendencies, she was not absolutely forced to do or not do anything. Because she committed the crime and pleaded accordingly, the criminal charges and consequent sentencing was both expected and

    Read More

  • Ellen Moore

    1537 Words  | 4 Pages

    1.     What would you advise Ellen to do and why? What should be her objectives? Are there objectives and actions consistent with what you would do if you were in her situation?

    Read More

  • Analysis Of Enron, Ethics And Organizational Culture

    1213 Words  | 3 Pages

    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.

    Read More

  • Analysis of the Enron/Arthur Anderson Scandal

    1550 Words  | 4 Pages

    Unethical accounting practices involving Enron date back to 1987. Enron’s use of creative accounting involved moving profits from one period to another to manipulate earnings. Anderson, Enron’s auditor, investigated and reported these unusual transactions to Enron’s audit committee, but failed to discuss the illegality of the acts (Girioux, 2008). Enron decided the act was immaterial and Anderson went along with their decision. At this point, the auditor’s should have reevaluated their risk assessment of Enron’s internal controls in light of how this matter was handled and the risks Enron was willing to take The history of unethical accounting practic...

    Read More

  • Enron Ethical Dilemmas

    722 Words  | 2 Pages

    When an ethical dilemma arises within an organization, it is difficult to separate right and wrong with what is best for the majority. Sometimes the answer is not a simple “yes” or “no.” In 2002, Enron Corporation shows us just that. By 2002, the sixth-largest corporation in America filed for Chapter 11 bankruptcy. The case of the Enron scandal is one of the best examples of corporate greed and fraud in America.

    Read More

  • Essay On The Enron Corporation Scandal

    2377 Words  | 5 Pages

    “When a company called Enron… ascends to the number seven spot on the Fortune 500 and then collapses in weeks into a smoking ruin, its stock worth pennies, its CEO, a confidante of presidents, more or less evaporated, there must be lessons in there somewhere.” - Daniel Henninger.

    Read More

  • The Enron Corporation Case Study

    1339 Words  | 3 Pages

    Through an organizational culture that focused on financial greed for self, illegal accounting practices, conflicts of interest partnerships, illegal business dealings, fraud, negligence, and massive corruption at all levels, the Enron scandal help to create new laws and regulations with stiff penalties if violated (Ferrell, et al, 2013). The federal government implemented the Sarbanes Oxley Act (SOX) (Ferrell, et al, 2013).

    Read More

More about Wise Decision: Sherron Watkins Letter to Kenneth Lay

Open Document