Essays academic service


Virtue ethics principles rights utilitarian enron case

Clover John Enron Case Study: Ethical Decision Making 1 Introduction Ethical conduct is a prerequisite for all the employees of an organization. This was necessitated by the separation of ownership and management. In instances where either of the parties violates the respect and trust of the other party, it results in losses to some or all the stakeholders.

This is evidenced by the Enron case, where the financial impropriety of management led to losses to shareholders, employees, and the collapse of the company. Case Analysis Ethical Theories Introduction To have an understanding of the Enron case from an ethical decision-making perspective, an analysis of the case by utilitarianism, Kantianism, rights issue ethics, virtue ethics, feminist ethics, and common moral, ethical theories will suffice.

The feminist theory also know as care theory, is premised on the inclusion of what are perceived as feministic tenets such as kindness, love, and care in determining whether or not an action is ethical. The common moral, ethical theory, on the other hand, is premised on the social nature of human beings which places a moral Enron Case Study: The Kantian ethical theories, on the other hand, are premised on a means and ends analysis of situations. Lastly, the utilitarianism ethical theory, on the other hand, is premised on the common good principle.

When the Enron case broke out, it emerged that Kenneth Lay, one of the founders of Enron and chairman of the board, acting in cahoots with Andrew Fastow, the then Chief Finance Officer, and Jeffrey Skilling, the CEO were involved in financial impropriety including money laundering, insider trading and widespread fraud Markham, 2015.

Virtue ethics principles rights utilitarian enron case

Therefore, contrary to the Enron code of conduct, that propagated virtues such as respect, integrity, communication, and excellence, the top management of the company did not set a good example and were the main cause of the demise of the company as a result of unethical financial conduct Boatright, 2013; see also Markham, 2015.

From the foregoing, it is, therefore, evident that the management and leadership of the company violated many moral and ethical theories, professional accounting standards, laws of the United States, virtue ethics principles rights utilitarian enron case professional codes of conduct.

Analysing the case using the utilitarianism ethical theories, it emerges that the management and leadership of the company acted driven by greed and selfish motives. The management failed to disclose losses, giving the impression that the company was still recording good performance. Secondly, using the information only privy to them, the top management were able to manipulate stock prices and trade to maximize their selfish gains through insider trading Boatright, 2013.

The management, also, violated the public trust by providing untrue or wrong information to dupe the public and employees of the company to invest funds in a company that was performing Enron Case Study: Ethical Decision Making 3 poorly.

Applying the Kantian theory to the Enron case, it emerges that the disinformation of the public kept a poorly performing company in existences duping the public to keep on investing in the business.

Also, failure to disclose losses, wrongful discharge of employees, insider trading, and retaliatory action against employees with dissenting views are contradictory to the categorical imperative principles upon which the Kantian ethical theories are premised Markham, 2015.

The vision of a company like Enron as discerned from the case was to grow and make a positive impact globally. This is the end. However, the approaches taken by the management, that it, the means as discussed above, contravenes the Kantian philosophy of the end justify the means.

They violated the trust bestowed upon them by the shareholders and the public. Secondly, the management had a legal and moral obligation to provide correct information to the employees, investors and other stakeholders to facilitate informed decision making Markham, 2015.

They failed in this by continuously failing to disclose losses when made.

  • Enron ethics - a comprehensive analysis enron ethics case analysis prepared by;
  • Ethical theories such as the Rawlsian theory, Contention theory, utilitarian theory and Virtues theories can be of help in educating corporate leaders on how to react and conduct business practices that are morally acceptable to the society;
  • The western capitalism is also faced with a wide range of challenges;
  • From Enron to reform.

At the same time, the ethical code of conduct of the company and the law, forbid the management from making contributions to political parties Enron Case Study: Ethical Decision Making 4 which they continuously contravened by making contributions to political parties and presidential candidates Boatright, 2013.

The management of the company demonstrated some behaviours and acted in ways that violate ethical standards as per the virtue theory that uses virtues to determine if or not an action or a decision is ethical.

The management was dishonest by continuously providing wrong information to the public and employees causing them to invest in Enron.

Virtue ethics principles rights utilitarian enron case

They were selfish because they used information that was not in the public domain to engage in insider trading to promote personal gains through their activities in the stock exchange Boatright, 2013.

The management of the company were untrustworthy because they provided wrong information related to the financial soundness of the company to various stakeholders.

  • A company seen to be performing badly will also face difficulties attracting employees and investors;
  • From Enron to reform;
  • Case Analysis Ethical Theories Introduction To have an understanding of the Enron case from an ethical decision-making perspective, an analysis of the case by utilitarianism, Kantianism, rights issue ethics, virtue ethics, feminist ethics, and common moral, ethical theories will suffice;
  • The ancient philosopher says that that doing what is right is like a second part of human nature and we must constantly strive to attain that virtuous character through constant practice.

There was a widespread lack of integrity among the top management and leadership of Enron as discerned from the incidents highlighted above. The management in their actions, on the contrary, were unfair as they promoted a culture that treated employees unfairly. The management and leadership at Enron, through insider trading, failure to disclose losses, provision of wrongful information, retaliatory action against employees, unfair treatment of workers through unfair discharges and unfair performance appraisal practices, disregard of the virtue ethics principles rights utilitarian enron case, unprofessional behaviour, and the general selfish behaviour and conduct of the management of Enron demonstrates unethical behaviour Markham, 2015.

This is since the aforementioned actions disregard the feministic tenets of love, care, kindness, fairness, trust, peace, and a general concern for the well-being of others.

Ethical Decision Making 5 First and foremost, under the common moral theory, the management failed in their duty to safeguard the interests of the shareholders who are their employers by engaging in fraud and financial impropriety. Thirdly, lying to various stakeholders as to the financial soundness of the company is another practice that contravenes the common moral theories.

Finally, the design of the 401K plan and the subsequent use of the same to dupe employees is tantamount to theft and defrauding of employees of their lifetime savings and retirement benefits Boatright, 2013.

These actions and behaviours are an indication of violation of ethical standards judged from the perspective of common moral theory. Standards Violated by Arthur Andersen In acting in cahoots with the management of Enron, Arthur Andersen violated public trust, disregarded and broke the law, and acted in violation of a moral, legal and professional code of conduct that required the auditing firm to bring to the fore financial impropriety at Enron in line with Securities and Exchanges Commission regulations under the Securities Act Boatright, 2013.

Thirdly, failure to report discrepancies in the audited financial reports of Enron to the board of the company was a violation of trust and duty to the board, a representative of the shareholders Markham, 2015.

Fourthly, lack of integrity as deduced from these actions is a violation of the law and ethical standards as set by the company and the SEC through misrepresentation of the financial position of the company to the general public Boatright, 2013. Further, Arthur Andersen, through its staff charged with the responsibility of safeguarding public interest failed in this duty by concealing the true financial position of Enron through abetting management engagement in fraud.

Therefore, Arthur Andersen engaged in fraud, destruction of evidence when investigations were initiated, manipulation of financial records, and assisting in the criminal activities of the management of Enron Markham, 2015. To be successful in these pursuits, the management is required to uphold high moral and ethical standards through promoting a culture of integrity and ethical behaviour in the organization. However, where the management propagates unethical conduct, their activities will result in losses to the company, shareholders, and other stakeholders and like in the case of Enron, the company might collapse.

Ethical theory and business 7th ed. Ethics, sustainability, and stakeholder management. Ethical Decision Making 7 Ferrell, O. International Journal virtue ethics principles rights utilitarian enron case Academic Research, 3 4. A financial history of modern US corporate scandals: From Enron to reform.