Introduction and Situational Analysis
In business, operations are not carried out for without a plan to make extraordinary profits. Instead, all organizations are guided by a code of conduct approved by the members of the board in at the beginning of the company. However, the constitution may be subjected to change in between the life of the business. Enron Company is one of the firms that are well known in America for their competitive advantage. The company dealt with energy supply and used to make billions of money in profit back in the 19th century ( Sims & Brinkmann, 2003) . The founder of the company Kenneth Lay founded the company in the year 1985 in the city termed as Omaha. Just like any other company would do, a code of conduct was formulated to govern the employees on how to behave at the workplace. It also defined how top management and external stakeholders were to relate with the employees. The core values targeted to govern the institution included integrity, respect, communication as well as excellence.
A scandal hit Enron Company in the year 2000 when its external stakeholders in collaboration with the external stakeholders decided to commit a financial fraud against the company ethics. Rules and regulations set by the board of directors are always aligned with the company's act in the constitution. Therefore, when a person decided to cross boards of obedience, the individual is said to have gone against the law. Jeffry Skilling, the C.E.O of Enron during the fraud era had read and understood the 64 pages code of ethics provided by the company ( Sims & Brinkmann, 2003) . Despite having the information on what to do and how to relate with employees, the person in the highest position was associated with bastardness of allegedly destroying the employees’ retirement financial plan. The mishandling of company finances led to the occurrence of the largest bankruptcy ever heard in the United States of America.
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Stakeholders Analysis
Since the stakeholders are the people who formulate and approve the company's code of conduct, they are always affected by the immoral acts that happen within the enterprise. First and foremost, internal stakeholders could not escape the trap of being termed as the core defaulters in the organization ( Li, 2010) . The money fraud was associated with all those who seemed to be in the line of finances starting with the top management (CEO) to the lowest accountant handling the cash accounts of the company. In such a situation, the person in charge of the organization is held liable for the immoral act and accused in the court of law for grabbing employees’ retirement benefits. Indeed, the C.E.O was sentenced to dail up to the end of the year 2017.
On the other hand, external stakeholders and shareholders are also affected by the decision made by the court against the company. For the case of Enron Company, all the money in the accounts had to compensate the employees, and the company was announced as bankrupt ( Li, 2010) .That mean all shareholders who invested their money with Enron had to lose it. According to the constitution, when a company is termed as bankrupt, it is not liable to pay any debt to suppliers or even shareholders. Therefore, stakeholders had to suffer the loss despite their innocent will to invest in the company.
Analysis Based on Ethical Theories
Philosophers in the field of ethics categorize the ideas into three primary groups namely the normative, met ethics and applied ethics. Dwelling from what the society consider as wrong or right, the act of grabbing employees’ retirement money is immoral ( Eduardo, 2011) . It is an act of greediness and dishonesty. Despite that, the company has well written and documents values that included honesty, there still emerged a group of people who decided to go against the code of conduct. Basing the argument on the theories of ethics, such behaviors are condemned by the community and the society at large. Victims linked with the fraud deserve punishment for them to be an example to other members of the community with a similar plan in mind. Advancement in technology has come to deteriorate the behavior of employees in an organization. However, it should be used to ensure there are accuracy and transparency in the company system.
Conclusion and Recommendation
Enron’s case on ethical conduct serves as a perfect example to other companies in the United States. The implications, as well as consequences that follow an individual after sabotaging the code of ethics in an organization, might lead to a jail sentence and be bankrupt. Therefore, both internal and external stakeholders have a duty to ensure that the company is not involved in any misconduct that might create room for the collapsing of the organization. It 'd be nice if the company decided to offer employees their retirement benefits and record minimal profits in their financial records than showing the world high profitability ratios that have resulted from baseness in the following the company principles. It is recommendable for all employees and external stakeholders to have regular updates on the financial trends of the company to avoid such frauds. Ultimately, every person has an obligation to ensure that business virtues and ethics are followed accordingly.
References
Eduardo, M. (2011). La caída de ENRON - A Cautionary Tale - ABC News Videos . America. https://www.youtube.com/watch?v=zSt9Ovt9ksY
Li, Y. (2010). The case analysis of the scandal of Enron. International Journal of Business and Management , 5 (10), 37-41.
Sims, R. R., & Brinkmann, J. (2003). Enron ethics (or: culture matters more than codes). Journal of Business Ethics , 45 (3), 243-256.
