Enron Case Study

Q1: what were the individual factors that have contributed to the failure of Enron?

The first individual factor that contributed to the failure of Enron is the greed of the leadership. The video shows that many leaders have corruption. For example, Lou Pai has fled from Enron Energy Service with a gain of $250 million in order to marry his stripper girlfriend and his corruption caused a loss of about $1 billion (Fredy 2015). Louis Borget and Andy Fastow siphoned off $3 million and $45 million respectively from the company into their own accounts (Fredy 2015). Embezzlement and misappropriation of the company's assets will lead to insufficient funds, which will affect the company's investment activities. Adequate funding is an important guarantee

Maintaining ethical standards at work can be challenging, particularly if 'good' people are surrounded by people who are not doing the same. I think there are several reasons that may lead to "good" people sometimes engage in unethical activities.

The first reason of 'good' people sometimes engage in unethical activities in business is that people always obedience to authority. For example, the Milgram experiment, Ordinary people are likely to follow orders given by an authority figure, even to the extent of killing an innocent human being. (McLeod 2007) In the process of our growth, obedience to authority is a deeply ingrained behavior. Once Enron' leader is engaging in unethical behavior by forcing employees to do something, they were afraid to loss their job. In order keep the job, employee would help leader to do some wrong

A typical example is provided in the early conformity studies by social psychologist Solomon Asch. When the subjects were not exposed to pressure, they invariably judged correctly (Clegg, Kornberger & Pitsis 2011, p30). But when the stooges gave the wrong answer, the subjects may change their responses to conform to the unanimous majority judgements (Clegg, Kornberger & Pitsis 2011, p30). When more and more people conduct immoral behavior, good people will be affected by these bad people. This also leads to more and more 'good' people engaged in unethical activities.

The third reason of 'good' people sometimes engage in unethical activities in business is that people are accustomed to do unethical activities. People are used to doing unethical things because they have already done smaller, less extreme acts that make the bigger less unethical.(Lee 2016) When people do unethical things once or twice that no one found, they would gradually become bold that do something more serious than before. Most of us are capable of behaving in profoundly unethical ways. And not only are we capable of it — without realizing it, we do it all the