The Enron Scandal is considered the most notorious one within American History. By misrepresenting earnings reports, the executives of ENRON embezzled funds funneling in from investors who were not privy to the true financial condition of Enron. It took Enron 16 years to go from about ten billion dollar assets to more than sixty-five billion dollar assets, and took just less than a moth to go bankrupt. Looking at the case, Enron’s culture contributed much to this ethical scandal. Indeed, Enron emphasized competition and financial goals only. The harsh, condescending atmosphere resulted from the sole pursuit of financial achievements caused a culture of deception. Due to the fear of losing jobs, employees started blindly focusing on making good financial numbers and ignored the value of ethic. Once someone started cheating, his co-workers would have to do the same- regardless of the notion of righteousness- to keep up the financial achievements and avoid losing jobs. This fiercely competitive environment also led to a lack of communication among employees. When there was little information being shared, nobody really has the “big picture” perspective of the company’s operation. Thirdly, the lack of communication between employers and employee also contributed to the fraud. In Enron, it’s discouraged to express one’s doubts and opinion on the executive team. Therefore, employees in Enron were pressured to shut their mouths, protect their own short-term interests, and try to achieve their goals even if it went against ethical standards.

A interesting video to watch about the AMAZING rise and SCANDALOUS fall of Enron.

 “People become the victims of their own greed.”

Reference:

Kirk Hanson  (2002) Japanese newspaper Nikkei:Lesson from the Scandal

http://www.scu.edu/ethics/publications/ethicalperspectives/enronlessons.html