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ASSIGNMENT INSTRUCTIONS

There are a few important elements to be considered prior to planning, such as explicitly stating ethical, entrepreneurial, and philosophical perspectives. Omitting any one of these perspectives might cause your strategic plan to become unmanageable. In recent years, the ethical perspective has come into focus and companies such as IBM, HP, Enron, and WorldCom, where ethical lapses in their business operations were widely publicized. Please pick one of these companies and discuss how they failed to operate ethically. Make sure to provide supporting evidence for your answer.

HOW TO WORK ON THIS ASSIGNMENT (EXAMPLE DRAFT/ESSAY)

Title: Ethical Lapses in Business Operations: A Case Study of Enron

Introduction:

In recent years, many large corporations have faced ethical dilemmas and accusations of unethical business practices. One of the most notorious cases is that of Enron, which resulted in a major scandal and bankruptcy. In this paper, we will discuss how Enron failed to operate ethically, leading to its downfall.

Enron’s Unethical Practices:

Enron was one of the largest energy companies in the world, with over 20,000 employees and revenues of $101 billion. However, the company’s downfall began when it was revealed that Enron executives were engaging in fraudulent accounting practices to inflate the company’s earnings.

One of the most significant ethical lapses was the creation of special purpose entities (SPEs) that allowed Enron to move debt off its balance sheet, making it appear more profitable than it actually was. Enron’s executives used these SPEs to hide their financial losses and to artificially inflate the company’s profits. This allowed Enron to maintain its high stock price and continue to attract investors, while its executives made millions of dollars through insider trading.

Another unethical practice was Enron’s manipulation of energy markets. The company created a complex web of energy contracts that allowed it to profit from the deregulation of energy markets in the United States. Enron executives used their insider knowledge to manipulate the market, causing energy prices to skyrocket and leading to widespread power outages in California in 2000 and 2001.

The Impact of Enron’s Unethical Practices:

Enron’s unethical practices led to the company’s bankruptcy in 2001 and the loss of thousands of jobs. The scandal also had a significant impact on the financial markets, as Enron’s collapse led to a loss of confidence in corporate America and the accounting profession.

Enron’s unethical practices also resulted in significant legal consequences. Several of the company’s top executives were charged with securities fraud, insider trading, and other crimes. CEO Kenneth Lay and President Jeffrey Skilling were both convicted and sentenced to prison.

Conclusion:

Enron’s case is a clear example of how unethical practices can lead to the downfall of even the largest and most successful companies. By ignoring ethical considerations in its business operations, Enron’s executives put their own interests ahead of their employees, investors, and the public. This ultimately led to the demise of the company and the loss of billions of dollars. To avoid similar fates, it is essential for businesses to prioritize ethical considerations and to ensure that their business practices align with their values and goals.

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