Sunday, September 8, 2019

Enrons corporate ethics policies Research Paper Example | Topics and Well Written Essays - 750 words

Enrons corporate ethics policies - Research Paper Example The ethical dilemma that faced Enron involved satisfying shareholders interests and the need to service all the corporate constituents. Satisfying shareholders would attract more investors and create a good public image for the company, but it would be difficult to meet fully the greedy needs of those who contribute to the company’s operations; hence, a point of equilibrium was desirable to balance the two parties’ requirements. The 64-page code of ethics for Enron was founded on respect, integrity, communication, and excellence. Critiques have described Enron as having the culture of arrogance (McLean & Elkind, 2003). This culture of arrogance lured people to believe that they had the potential for handling greater risks without encountering any danger of incurring losses. The culture of the company was characterized by laxity in promoting the values of respect and integrity. The undermining of these values is evidenced by the company’s emphasis on decentralization, employee performance appraisals, and the discriminatory compensation programs. The Houston Natural Gas and InterNorth were merged on 1985 to form Enron (Niskanen, 2005). During the early 1990s, Enron sold electricity at market prices, but soon after the United States approved the legislation to deregulate the sale of natural gas, the markets made it possible for companies such as Enron to sell energy at comparatively higher prices. The objective of Enron was to achieve further growth; the company, therefore, pursued a diversification strategy. This led to the company operating and operated a variety of businesses across the world, which allowed Enron for the proliferation of crony capitalism. The financial statements of Enron were characterized by complexity and confusing to both analysts and shareholders (Niskanen, 2005. Enron’s complex business model required the company to use accounting limitations in misrepresenting earnings and modifying the balance sheet to

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