Essay about Corporate Culture At Enron And Lehman Brothers

Essay about Corporate Culture At Enron And Lehman Brothers

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Analyse the corporate culture at Enron, Arthur Andersen and Lehman Brothers and discuss any similarities / differences, and the link between corporate culture, greed and fraud. Provide specific examples to justify your answer.
In essence, for the three companies considered, as a corporate culture…”Greed is good”. The original virtues of Enron, Arthur Andersen and Lehman Brothers were all, over time, replaced by those three simple words…”Greed is Good”, and the damage that motto caused on Wall Street and across the globe was, is, and will probably be again, phenomenal.
Deregulation of the financial services industry provided the key to unlocking the gates to a corrupt corporate world filled with greed and disastrous levels of fraud. Enron in particular had ‘friends in high places’, supporting several US government administrations from Reagan through to the current president, Obama. Whilst corporate fraud has always existed, reducing or removing the need to answer to government and enabling the corporate world to ‘self-regulate’ provided the opportunity for the employees of Enron, Arthur Andersen and Lehman Brothers to exploit opportunities in a much easier field of play.
Arthur Andersen
Arthur Andersen, founder of Arthur Andersen back in 1913, built his business by putting reputation over profits (Brown & Dugan, 2012) and had as his motto: “Think Straight, talk straight” (Farrell, 2003). He refused to follow a client’s request to adjust their financials as it would compromise his business ethics and a culture of integrity was born. The cornerstones of his business were: ‘provide good service to the client; produce quality audits; manage staff well; and produce profits for the firm’ (Brown & Dugan, 2012).
However, by the 1980...


... middle of paper ...


... with Lay, espoused a virtuous code of ethics but didn’t act on them in a ‘do as I say, not as I do’ culture. Those that questioned, such as Watkins, were not supported, but demoted, ignored or fired. A corporate leader whose influence over employees is likened to the morally corrupt David Koresh and Jim Jones, presents a poor corporate culture image – in hindsight – and it is suggested by Sherron Watkins that this is the influence Jeff Skilling had over his staff. In Andy Fastow, Enron employed someone who is suggested had ‘no moral compass’ (Martin, 2013).
Thus a corporate culture of intimidation and corruption; encouraging and turning a blind eye to fraudulent activities within their own walls, flowed not only through Enron but to external parties such as their auditors, Arthur Andersen, who were readily complicit with the fraud and quest for their own profits.

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