Decision Making Processes Of Unethical Behavior Essay

Decision Making Processes Of Unethical Behavior Essay

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The factors that were weighted heavily other than financial gain in the decision making processes that resulted in unethical behaviour on the part of executives and employees were the “pressures…to reach performance targets” (Free, Macintosh & Stein, 2007) and the overall impression that the “reaction to bad news” (Free, Macintosh & Stein, 2007) was not a positive experience and should be avoided. These pressures would have added to the extreme competition and associated unethical behaviour in a company where a culture of success was valued over all other ethical concerns.

In addition to the ruthless evaluation systems, there was also reward systems that promoted unethical behaviour aimed at securing these rewards. The “compensation plan ‘seemed oriented toward enriching executives rather than generating profits for shareholders’ and encouraged people to break rules and inflate the value of contracts even though no actual cash was generated,” (Cengage.com, n.d.) so it is evident that the company’s focus was directed toward individual gain rather than the growth of the business and the wellbeing of investors, employees, and shareholders. More specifically, “Enron’s bonus program encouraged the use of non-standard accounting practices and the inflated valuation of deals on the company’s books, [so] deal inflation became widespread within the company as partnerships were created solely to hide losses and avoid the consequences of owning up to problems” (Cengage.com, n.d.). These types of unethical behaviour are symptoms of the overarching problem of the lack of internal controls to govern the behaviour of those in power and of a company culture that goes against the code of ethics that the company outwardly projects to its investo...


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...ndicators or red flags were “not considered warning signs because the actions [were] in line with the company’s beliefs and goals” and entrenched in their corporate culture” (Bills, n.d.). For this very reason those who should have seen these red flags, like the board of directors, did not because the “practice[s were] considered…Enron’s standard business practices” (Bills, n.d.). Furthermore, those involved in the company were either complicit in the fraud or unaware or mislead to believe that the company was operating within legal bounds and there was no point at which the company believed it should take action or responsibility for the actions of the executives aside from the resignation of the CEO in 2001. However, following concerns regarding the legitimacy of Enron’s financial position made by a whistleblower, the company was forced to take some sort of action.

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