Enron’s Code of Ethics: An Analysis

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Enron’s Code of Ethics: An Analysis

This paper will analyze Enron’s Code of Ethics and examine the sections on values and corporate responsibility. The paper will use applicable theories and concepts and will detail Ken Lay’s view of ethics and Enron’s corporate social performance. The paper will argue that Enron was not being socially responsible to all of its stakeholders because it deceived employees and investors about its real financial status despite having stated in its company code of ethics that transparency, integrity, and respect for the law would be the cornerstones of its daily operations.
Enron’s values, as stated in the 2000 code of ethics, include the following: respect for others; openness and integrity; a premium on communication; a commitment to organizational excellence; and a commitment to non-discrimination. As it pertains to corporate responsibility, Enron’s code states that it (or its representatives) will do the following: it will comply with all relevant health and safety laws. It will emphasize safe operations because the company is devoted to protecting the environment, human health and natural resources; and the company pledges to enter into productive partnerships with the communities in which Enron is a part '' partnerships geared towards creating healthy families, and geared towards making the community stronger via education and environmental stewardship (Enron, 2000, pp.5-6).
Applicable concepts and theories explain Ken Lay’s view of ethics. For one thing, the wording of the document is aspirational; it demands that people hold themselves to the highest ethical and moral level and work constructively with partners to forge better communities (for a definition of aspirational, please see Ethics Resource Center, 2009). As well, the code of ethics and it’s values-centered insofar as its ethical ideals are among the first things discussed in the code; the code of ethics also stresses sustainability because of its focus on environmental and community stewardship (for a definition of both terms, please see Ethics Resource Center, 2009).
None of the websites discussed in this paper take note of specific ethical theories when talking about what companies should do or not do. However, there are two broad ethical theories '' deontology and utilitarianism '' that can be applied.

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Deontology holds that one must do right for the sake of doing right; utilitarianism holds that something is only ethical if it creates the greatest good for the greatest number(for a definition of both terms, please see Dictionary.com 2009). Put another way, the outcomes are the things that matter when it comes to corporate actions. In the case of Enron, speaking the truth about its financial situation in, say, 1999, would have hurt the company by depressing stock value; it is also clear that company investors might have been forced to sell off stocks or taken a financial “hit.” On the other hand, not saying anything would keep people investing in the stock, therefore increasing the stock holdings of employees. A deontological approach would have favored full disclosure; a utilitarian approach would presumably favor not saying anything and hoping that things turn around.
Without question, Enron was not socially responsible when it lied about its income and failed to reveal that its equity value was lower than its balance sheets said. At the same time, the company used its “partnerships” with the many companies it created to hide its losses and its debts. Enron executives also ignored accounting irregularities and calmly kept millions in stock-market gains '' even though they surely knew that company employees who had stock in the organization were going to suffer when things came out (National Public Radio, 2009). Without a doubt, Enron betrayed its shareholders (its employees most of all) because it went against its own stated commitment to integrity; it eschewed communication for greed; and its creative accounting showed its real contempt for local and international business laws '' even though Enron (2000) claimed to respect the law (please see page 5 of the Code of Ethics).
In retrospect, it is not clear that Enron had a compliance officer in place in 2000 when it formulated its code of ethics. However, it would appear that senior officials in the company would have the same responsibilities as any compliance officer: to ensure that the company upheld all relevant laws and regulations; to be leaders in the formation of ethical business practices; and disclose any information required by law or by company policy (Ethics and Compliance Officer Association, 2009). The leaders at Enron violated every one of their obligations and betrayed stakeholders.
To end briefly, this paper has looked at the sections on values and corporate responsibility highlighted in Enron’s code of ethics; the paper then looked at the pertinent concepts and theories that apply to the situation and answered the question of whether or not Enron was being socially responsible. The ultimate answer is that, no, Enron was not being responsible; the company hurt many people even though it undoubtedly though that keeping things secret would serve the greater good insofar as it would give senior staff time to reorganize things without causing a depression in the stock holdings of employees. In the end, though, Enron destroyed its credibility and ruined many lives '' all because it declined to follow its own code of ethics.

References
Enron Corporation. Ken Lay’s views of ethics (2000). Code of ethics.
Retrieved March 18, 2009, from: http://www.thesmokinggun.com/graphics/packageart/enron.pdf
Ethics and Compliance Officer Association. (2009)
The standards of conduct. Retrieved March 18, 2009, from
http://www.theecoa.org/AM/Template.cfm?Section=Professional_Standards
Ethics Resource Center. (2009). Ethics glossary. Retrieved March 18, 2009, from
http://www.ethics.org/resourves/ethics-glossary.asp
Deontology. (n.d.).Dictionary.com Unabridged (v 1.1). Retrieved March 18, 2009 from
Dictionary.com website: http://dictionary.reference.com/browse/deontology
National Public Radio. (2009). Fall of Enron. Retrieved March 18, 2009, from
http://www.npr.org/news/specials/enron/
Utilitarianism. (n.d.). Dictionary.com Unabridged (v 1.1). Retrieved March 18, 2009, from
Dictionary.com website: http://dictionary.reference.com/browse/utilitarianism

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