Enron Ethical Dilemmas

Section 1: Introduction and situational analysis:

In the world of business ethics, there are certain examples and scenarios that have become a commonplace for teaching aids. In the case of Enron and its eventual downfall from a perceived highly ethical and successful company. Enron was once ranked the sixth largest energy company in the world. At the height of its success, Enron seemed to be an outstanding corporate citizen, with all the social wellbeing and business ethics tools and status symbols in place (Brinkman, 2003, p. 244). However, due to a deep culture of rewarding clever strategies to bend, break laws and codes, the company eventually collapsed and filed for bankruptcy.

Enron began as a natural gas pipeline company after the merger

“Enron was a pioneer; they were risk takers and treated their employees like entrepreneurs. Think big; take chances, go where no one has gone before. Unfortunately, it now looks like Enron’s profit was as volatile as the natural gas they traded” (DeLongs, 2002). This dilemma was gradual and was years in the making. The simplest summary of the dilemma was that Enron was pushing a culture of promoting rule-bending and legal loopholes to continue their economic growth and success. This type of ethical culture was unsustainable and eventually was the cause for the final downfall of the company. Once financial shortfalls and hidden debts came to light, it was clear that the company had extended beyond their own reach and that their base was now built upon image and lies rather than assets and

According to Gilbert, this theory identifies the moral act as the greatest happiness of the greatest number should be the guiding principle of conduct (Gilbert, 2016 p. 41). Each small infraction had been always in the best interest of each named stakeholder as it would increase the economic success and reach of the company, even if only in image. If perhaps, they had considered observing their decisions and actions through a separate ethical theory they may have come to that conclusion as well. For example, Gilbert defines the rights and duties theory as behaving is more than obeying the rules and expecting the person’s rights to be upheld no matter the consequences’ (Gilbert, 2016 p. 57). Had they utilized this theory, they may have considered that although their irresponsible actions were building the appearance of economic success, they were putting the livelihoods of their employees and shareholders at risk. There are many ethical theories, but knowingly misleading and lying is not part of