Enron Scandal

Ethics deals with values, morals and the overall individual personality as appropriate in any given society. Various ethical theories have provided rules entrenched in systems and principles which offer guidance and making key decisions on rating what is good or bad and right or wrong. Ethical theories have provided basis for guidance and understanding on what is good and bad in any given scenario and the understanding of what is morally upright to be referred as human in nature. When it comes to leadership positions, ethical theories have been shown to be concerned with what leaders ought to do. Leaders have choices and the decisions they make are often informed on ethical approaches as guided by ethical principles which govern good management practice. Overlay, a leader’s choice is often rated based on the individual moral development process.

Often good things are read about kings and negative things don’t go unnoticed. These observations have been noted across the board ranging from great empires, strong presidents, rulers, weak presidents and other categories of leaders. However focus has shifted now to business entities and companies across the globe. There have been noted observations on bad and good companies. Ethical practices have been entrenched in the corporate entities and this has been observed in business organization such as those in America. Ethical leadership has emerged also in the political environment.  This analysis, reviews Enron Company during the early 2000s. It emerged as a big scandal solemnly due to inefficient ethical leadership in the company’s top hierarchy.

Enron scandal entailed a fraud by top executives and it bubble out in the year 2001, when the company gross income was over estimated with over hundreds of million dollars. During this period, the company was ranked as the sixth biggest energy organization globally. It merged that top company executives sold the stock for the company before the collapse while the lower level employees were denied with sell of their shares through tough restrictions referred to as 401K restrictions. This led to the company filling bankruptcy, leaving thousands of workers with worthless s stock in the market, this closure and motion notices prompted criminal investigations in US later in the year 2002.

The emergence of bad leadership is often a precipitate of dark leaders who capitalizes leadership positions for personal gains. Toxic leaders are occasioned by harmful behavior which leaves the ordinary citizens in the worse state of both financial and social aspects. This has led to violation of human rights. The leadership decisions of the top executives of Enron Company led to collapse of the organization, showing little disregard for the public, thus signifying acts of arrogance, insufficient integrity threshold, over ambitiousness and total ignorance of their actions. The top management reflected the dysfunctional traits which are observed among bad leaders.

Mr Jefrey Skilling the CEO, operationalized staff of executives who capitalised on accounting lapses in the company for poor financial reporting. This actions led to hiding of billions of money inform of debts from bounced deals and organization activities. Mr Andrew Fastow, who was the chief financial officer, gave false report to the Enron Board of management and the members of the audit committees to disregard financial queries posed. The company top executives rewarded itself approximately $680 million to 140 top management executives in the year 200 before the elapse of the company. 

At this point in time the net worth shares available were trading at $90.75 high peak, but eventually after the collapse it significantly dropped to $0.67. With criminal proceeding s being initiated, the financial accounting officer, Andrew Fastow was charged with fraud and conspiracy charges and other related laundering cases in the year 2002. The chief executive Mr Jefrey Skilling was charged with fraud charges in the year 2004, while the vice president Mrs Paula Riker pleaded not guilty charges in the year 2004.

Critical assessments of these actions and manifestations with regard to management leadership skills on ethical and moral conduct assessments showed that ethical egoisms, altruism and utilitarianism actions played role. Ethical egoisms refer to the state where people act in a manner to create greater good for their own selfish minds. Leaders orienting to this avenue often takes opportunity available for their selfish gains. Majority of Enron Executives made various leadership decisions which geared up towards maximizing their won profits. The leaders of the company showed high level of self-interest and low concerns for the welfare of others attached to the company,.

On the other side of the coin, the vice president, Sherron Watkins, in charge of corporate development, had alerted the CEO on the financial loopholes in the year 2001. She played a critical role in bringing to light the corruption scandal at the company. She took bold steps of reporting to the financial authorities and government agencies, contrary to her actions risking her career. In this regard her actions are seen as altruistic, in the manner that the actions taken were moral with the view of promoting best interest for other people in the chain.

From these actions Sherron Watkin downgraded her own self-esteem and showed high interest for the needs and welfare of others. This was significant in the manner that she jeopardized her career as second in command of the organization for the welfare and interests of others and the lower employees of the organizations.Thus the top executives led by CEO Mr Jefrey Skilling and others contributed significantly to financial down fall of the Enron Company. This signified highest level of ethical egoisms and high degree of self-interest.

These none moral and unethical behaviours saw reward of financial monetary gains by the executives. This reflects the toxic cycle of operating with toxic leaders, susceptible flowers and ambient environment; however this ambient environment is operating in unstable conditions which favour such actions. With this level of instability, the corruption scandal bubbled to the public lime light. The wrong doings perpetuated by the management came to light. The leaders were not afraid of the actions they were doing. Thus the top management were not utilitarian and altruistic in their conduct as they were not encouraged towards the greater positive aspects of their organization.

Leadership skills are traits which entail making an influence on others. Leadership skills are concerned with gestures of respect, fair terms of services and building conducive community. It is embed in positive values, thus the influence attached has effects on others. The vice president, Sherron Watkin illustrated how moral practices differentiates ethical leadership from other aspects of leaderships traits compared to those of her executives colleagues who are endeavoring at achieving the greater good for their own greed. The Enron scandal has illustrated how moral leadership is of essence in organizational management practices in the current society.   

One Reply to “Enron Scandal”

Leave a Reply

Your email address will not be published. Required fields are marked *