Enron: The Smarter Guys in the Room

1- In several sentences, what do you think trigged the Enron downfall?

Enron downfall was the result of the unethical conduct of its top executives, whose pursuit for higher profits, led to the company to the ruin. As the matter of fact, the company was involved in illegal schemes that allowed the top executives of the company to transmit money offshore. In addition, the company did not provide stakeholders with accurate and true information on its current position. Instead, the company used mark-and-marketing accounting, which allowed Enron to create a positive image of a profitable company, even if the projects Enron was involved in failed. As a result, the company and its top executives deceived stakeholders and focused on their personal profits solely, whereas the company was ruined, while interests of shareholders, employees and other stakeholders were totally ignored.

2- Do you thing that the ethical duties to the company and other parties (i.e, customers, community, etc.) are different if the company is public or privates? Why or why not?

Basically, ethical duties of public and private companies are the same because, regardless of the nature of company, i.e. regardless of whether it is public or private, the company is always responsible for its action or inaction. In this regard, both private and public companies should meet standards and norms of business ethics. Obviously, the primary goal of private companies is to maximize revenues of their owners but, from the ethical point of view, they are responsible for their employees and other stakeholders. The owners cannot ignore interests of employees and stakeholders because the ignorance of their interests leads to the deterioration of the public image of the company and customers ignore such company.

3- Do you think that the definitions of “Professionalism” or “ethics” have changed since the Enron debacle?

In fact, professionalism and ethics are concepts that mirror the existing ethical norms and standards established in the industry or nation at large. Obviously, the Enron scandal has shattered the traditional concepts of professionalism and ethics but it has not changed them. What is meant here is the fact that stakeholders have ceased to believe in professionalism and ethics as a norm of conducting business in the US. However, they still define professionalism and ethics in traditional terms.

4- Is there a separate ethical responsibility for “insiders” versus “outsiders” to a corporation?

Enron proves that there is different responsibility for insiders and outsiders but, from the ethical point of view, this difference should be eliminated to provide larger possibilities for conducting ethical and responsible policies. Obviously, companies cannot conduct ethical policies if they violate ethical norms and standards in relation to outsiders. In this regard, ethical norms and standards cannot be separated. Instead, the matter is whether there is a corporate ethic or there is none.

5- Could it possible for Mr. Fastow to complete the partnership deals and maintain his fiduciary duties to Enron and why?

Mr. Fastow could not maintain his fiduciary duties to Enron because the corporation was totally ruined and could not regain its position, whereas its top executives have played the determinant part in the downfall of Enron.

6- Is the sole purpose of a corporation to make money, of the effects it may have on the community, especially with resources like electricity?

Enron has proved that its only purpose was making money, regardless of interests of the community. In this regard, it is worth mentioning the fact that Enron failed to conduct responsible policies not only in relation to the community but also in relation to its own employees, who simply lost their jobs. On the other hand, the ignorance of interests of communities by Enron shows that such policies are ineffective in the contemporary business environment.

7- What Parallels can you draw between what happened with Enron and what is happening in our economy right now? (most important question)

Basically, the case of Enron is similar to the current economic recession because the latter was provoked by the speculations based on the strife of speculators to maximize their profits in household market. Similarly, Enron attempted to maximize its revenues overestimating its marketing performance. When the truth came out, Enron was ruined and the economic recession started.

8- Can the immediate large profit generation be better than long term small profits for the viability of a company/organization?

The long term small profits are more preferable because they provide the company with the possibility to maintain its stable development.

9- Is the Milgram experiment true or false and why?

Basically, the Milgram experiment is true because it shows the current domination of material interests over ethical concerns. Companies and society are still inclined to fraudulent actions, when high profits are at stake.

10- Is the Milgram experiment conclusions applicable to the business environment?

The Milgram experiment conclusions are not always applicable to the contemporary business environment because there is still the conflict between ethical norms and standards, on the one hand, and the strife for high profits, on the other.

11- Is there a point where a company or person has made enough money and why?

The person cannot define where there is point to his or her profits and the person cannot stop earning money. The more a person has the more he or she wants.

12- What is the fiduciary duty a publicly traded company had to public and the stock market?

The public company is responsible for the public benefits and well-being.

13- Did the accounting firm of Author-Anderson breach a fiduciary duty?

Author-Anderson did not breach fiduciary duty because it was concerned with the public interests, which are prior to private ones.

14- Is the constitution of the United States a proper shield for ethical misconduct?

The US Constitution cannot be a shield for ethical misconduct because it grants citizens with equal rights and liberties.

15- Does a criminal conviction absolve unethical conduct?

Criminal liability can increase the responsibility of companies and their CEOs and to prevent unethical conduct.

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