Successful company leaders understand the importance of communicating accurate accounting information and developing a business plan – whether a proprietorship, partnership or corporation. The language of the organization must be clear, or firms risk financial peril as experienced by Enron and WorldCom, or, currently, the 20-year-old multimillion-dollar Farish Street Project in downtown Jackson. These events suggest we should align ourselves with God and become good stewards of our daily blessings. If we neglect our responsibilities and misrepresent ourselves, we will pay a steep price. Job 4:8 tells us that those who sow sin and trouble will reap the same. This Scripture illustrates the consequences of corruption by CEO Ken Lay and his Enron Corporation. Despite Leviticus 19:11, which says we must not steal, lie, or defraud, the energy giant disintegrated in one of the worst accounting scandals in U.S. history. Lay’s death just months before sentencing compounded the tragedy. Accounting for business, spiritual lives, scams Although the ultimate price for our earthly sins may be death, II Corinthians 5:10 says we must still stand before God and be judged to receive just treatment for all the things we have done – good and bad. This suggests that our souls are on the line. There are other instances of inappropriate corporate behavior and consequences that relate to our spiritual lives. After abandoning its standards, the accounting firm of Arthur Andersen began to unravel in the wake of the Enron debacle. Its indictment, along with numerous others at Enron, led to Andersen’s demise. Ivancevich, Konopaske, Matteson (2011, pp. 419-420) say explanations for unethical behavior include: 1) pressure to perform well; 2) mimicking others ... ... middle of paper ... ...our Redeemer, who is responsible for the credits on our balance sheets that elevate our businesses and spiritual lives. Thus, reciprocally, we should willingly magnify our relationship with God. Works Cited Cathead. (2013). Over $21 million dollars spent on Farish Street revitalization. [Web log post]. Retrieved from http://kingfish1935.blogspot.com/2012/06/over-21-million-spent-on-farish-street.html Holt, R.N. (2010). Financial Accounting: A Management Perspective. (17th edition) Manquin, VA. Ivy Software. Holy Bible – New Living Translation. (2007). Tyndale House Foundation. Ivancevich, J.M., Konopaske, R., & Matteson, M.T. (2011). Organizational Behavior and Management. New York, NY: McGraw Hill. ISBN: 978-0-07-353050-5 Jordan, B.D, Ross, S.A. & Westerfield, R.W. (2011). Essentials of Corporate Finance. New York, NY: McGraw Hill. ISBN: 978-0-07-338246-3
Hill points out that all of these topics are in today’s business market. They should be addressed and recognized by Christians today. For most people, their work is a key factor in their self-worth, family esteem and identity. Workplace ethics and behavior are a central part of employment, as both are aspects that can help assist a business in its efforts to be gainful. Every business in every industry has certain guidelines and procedures to which its employees must follow. We must always remember that no matter who you are, where you come from, or where you are going, you are no better than the next person, when it comes to making mistakes and sinning. For all have sinned and fall short of the glory of God. (Romans
Many organizations have been destroyed or heavily damaged financially and took a hit in terms of reputation, for example, Enron. The word Ethics is derived from a Greek word called Ethos, meaning “The character or values particular to a specific person, people, culture or movement” (The American Heritage Dictionary, 2007, p. 295). Ethics has always played and will continue to play a huge role within the corporate world. Ethics is one of the important topics that are debated at lengths without reaching a conclusion, since there isn’t a right or wrong answer. It’s basically depends on how each individual perceives a particular situation. Over the past few years we have seen very poor unethical business practices by companies like Enron, which has affected many stakeholders. Poor unethical practices affect the society in many ways; employees lose their job, investors lose their money, and the country’s economy gets affected. This leads to people start losing confidence in the economy and the organizations that are being run by the so-called “educated” top executives that had one goal in their minds, personal gain. When Enron entered the scene in the mid-1980s, it was little more than a stodgy energy distribution system. Ten years later, it was a multi-billion dollar corporation, considered the poster child of the “new economy” for its willingness to use technology and the Internet in managing energy. Fifteen years later, the company is filing for bankruptcy on the heels of a massive financial collapse, likely the largest in corporate America’s history. As this paper is being written, the scope of Enron collapse is still being researched, poked and prodded. It will take years to determine what, exactly; the impact of the demise of this energy giant will be both on the industry and the
It's difficult not to be cynical about how “big business” treats the subject of ethics in today's world. In many corporations, where the only important value is the bottom line, most executives merely give lip service to living and operating their corporations ethically.
Ethics policies are implemented in almost all businesses. Companies search for candidates that will be moral in their actions so they can ensure long-term financial success. Throughout history we have seen businesses fall due to unethical behavior. In recent years the business Enron Corporation is best known for the scandal that led to the bankruptcy of a company with more than 60 billion dollars in assets. We will examine the circumstances that led to the downfall of Enron, how the scandal was realized, as well as the outcome of one of the largest bankruptcies in American history; a case that exemplifies unethical professional behavior.
Enron was an energy company founded in 1985 that was in the business of “trading commodities, which soon became the largest business site in the world” (Cbc.ca, 2006). By the end of 2001 it was discovered that Enron had created a “complex web of partnerships” (Cbc.ca, 2006) to hide the level of its level of debt and to artificially inflate stock prices. This financial fraud played out in a company whose “ethics code was based on respect, integrity, communication, and excellence (Cengage.com, n.d.). It is evident that these values were a superficial layer of outward facing trust that masked the problems inherent in the company where the espoused values are not the enacted values (Lecture Slides: Slippery Slopes). These problems are “rooted in
In the book Business for the Glory of God: The Bible’s Teaching on the Moral Goodness of Business by author Dr. Wayne Grudem, he discusses several viewpoints about relating with each other in a business setting. Dr. Grudem provides eleven business activities that give us the opportunity to glorify God and follow the Bible as a reference to how we should relate our readings of scripture to everyday business life. They are (1) Ownership; (2) Productivity; (3) Employment; (4) Commercial transactions (buying and selling); (5) Profit; (6) Money; (7) Inequality of possessions; (8) Competition; (9) Borrowing and lending; (10) Attitudes of heart; and (11) Effect on world poverty (Grudem, 2003).
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.
Ethical behavior, in a general sense, is a definition of moral behavior in regards to lawfulness, societal standards, and things of that nature. In the business world, ethics commonly refer to acceptable and unacceptable business practices within the workplace, and all other related environments. The acceptance of colleges regardless of ethnicity, gender, and beliefs, as well as truthfulness and honesty in relation to finances within the company are examples of ideal ethical business conducts. Unethical business behavior would include manipulating procedures based on bias or discrimination, engaging in activities that promote political gain, as well as blatant fabrication of monetary factors within the company and “can affect organizational performance and is costly to employers, employees, shareholders, and other organizational stakeholders” (Cox 263). When a corporation practices proper ethics, it is representing not only itself in a positive manner, but its partners, shareholders, and clients as well. On the other hand, when an organization partakes in unethical activities, all parties are negatively affected. The collapse of Enron is a major case of unethical conduct in the corporate world, because the circumstances surrounding the firm’s chaotic plunge where so scandalous that it left “creditors wrangling over Enron's skeletal remains” (Helyar) long after the company had seen its demise. There are numerous instances to be mentioned, including deliberate failure to properly report fiscal losses, insider trading, and overall relentlessness. The inclusive purpose of this paper is to further explore the underlining factors that contributed to the downfall of the once powerful Enron, and how a new way of approaching business ethi...
In the final two chapters of Every Good Endeavor, Timothy Keller ends his book by discussing the new aims of our work. They are found in the gospel, that power alone should motivate our work. In chapter 11, Keller begins by discussing our ethics and morals, and how the gospel should impact the way view and act in our workplace. Corruption can be found in many aspects of culture and the world. We should not disadvantage others to advantage ourselves. It might make good business sense to operate virtuously, but there are times when it will not. A Christian way of thinking will ultimately result in changing our thoughts on human value. This helps us face very confusing, moral dilemmas. We are forced to ask whether or not we want power, wealth
Moral and ethical leaders are essential for any successful business because these leaders are the essential links between the organization’s objectives and its stakeholders. Leaders are the face of any organization, and their actions reflect the values and the ethics the organization they represent. Therefore, if a leader’s action and decision is ethical, the stakeholders and other organizations will respect the leader and the organization. Recent history has shown that ethical behaviors are important in sustaining businesses; large corporations such as Enron, Chevron, and Worldcom, destroyed people’s lives through unethical business behaviors (Josephson, M., 2013). If these corporations and its executives have operated morally and ethically, they would have been able to avoid bankruptcy and escaped going to prison (The Economist, 2002). Having ethical leadership in organizations will help to eliminate the negative impact executive’s gre...
According to Jennings (2006), “All companies experience pressure to maintain solid performance” (p. 17). Marianne Jennings book, The Seven Signs of Ethical Collapse: How to Spot Moral Meltdowns in Companies Before It’s Too Late, centers around seven warning signs or seven common traits pattern to ethical collapse in companies. In her book, Jennings identifies the seven common ethical signs of moral meltdowns in companies to be: (1) pressure to maintain those numbers; (2) fear and silence; (3) young ’uns and a bigger-than-life CEO; (4) weak board of directors; (5) conflicts of interest overlooked or unaddressed; (6) innovation like no other company; and (7) goodness in some areas atones for evil in others (Jennings, 2006, p. 7). This paper will be addressing “Pressure to Maintain Those Numbers.”
Enron was one of the major energy corporation in America before it went bankrupt. A contributing reason to Enron’s failure was a lack of ethical management. Enron scandal proves that the company infringed the transparency, dignity and responsibility ethical principles of the Global Business Standard Codex (Paine et al. 2005). Effective management practices help businesses manage risk by reducing the likelihood of breaching the misconduct, but ethical dilemmas cause illegal or immoral activities.
The term “ethical business” is seen, by many people, as an oxymoron. This is because a business’s main objective is to make as much money as possible. Making the most money possible, however, can often lead to unethical actions. Companies like Enron, WorldCom, and Satyam have been the posterchildren for how corporations’ greed lead to unethical practices. In recent times however, companies have been accused of being unethical based on, not how they manage their finances, but on how they treat the society that they operate in. People have started to realize that the damage companies have been doing to the world around them is more impactful and far worse than any financial fraud that these companies might be engaging in. Events like the BP oil
Placed in proper perspective, had Enron considered doing the right thing because it was the right thing to do, regardless of outcome, the company may still be in business today (Gilbert, 2012, p. 57). Obviously, in hindsight, doing the right thing may have changed the culture to one more conducive to moral values, which in turn, may have resulted in earlier reports of financial shortcomings. In reality, the company may have prevented its own demise with honest forthcoming reports that could have prevented market panic; thus, preventing the downward spiral that enviable destroyed the company. Point of fact, Enron openly espoused its affection for ethical policies but, in fact, it did not practice ethical behavior. Truly, had the company followed any ethical approach, it may have staved off its preordained destiny. A culture that rewards breaking rules is destine for failure. Though an ethical program may appear to be the solution; however, a moral culture is truly the key to winning the battle of ethics. Moreover, others have suggested that ethical programs may stifle creativity and thus prevent the free exercise of one’s values and moral judgment (Stansbury & Barry, 2007, p. 239). While a program by itself will never be successfully, leadership from the top is instrumental to victory; managers must be known for possessing core values such as honesty and integrity (Nel, Nel, & du Plessis, 2011, p. 59). Albeit, despite the best policies, the proclivities of most subordinates will always drift towards follow the examples of leadership (Mayer, Kuenzi, & Greenbaum, 2010, p. 13). Thus, like the saying goes, an ounce of example is worth a thousand words! The prevention of such needless tragedy lies not in policy or programs but rather in leadership by example. If society truly demands moral behavior within its institutions, then it must expect the same standard from its leaders. Society must demand
John M. Ivancevich, Robert Konopaske, Michael T. Matteson, [2011] “Organizational Behavior and Management”, United States of America:McGraw-Hill Irwin