Corporate wrong doing in the United States helped in the collapsed of numerous corporations as it was the case that happened in 2002 with Enron and others. Currently, there are many people who are hesitant to trust in anything they might hear regarding the integrity of certain corporations. In 2002, we experienced what happened when corporate integrity gets ignore. The American people lived through a scandal that rock our nation economic with companies like Enron and WorldCom to include other, as being responsible for their employee disregarding corporate integrity by their CEOs and greeted executive’s decisions. The American people feel that corporations benefitted from a broken down system that neglected to ensure all businesses maintain good corporate integrity and the government to holds them accountable for their wrongdoing.
The general public here in America continued to believe that during the dark times of the Enron disaster, the government did little to punish those who were making those unethical decision and that the system was bamboozled by certain corporate executives; those who did their bidding at the expenditure of investors. It is necessary and important that our society maintained corporate integrity in check or we could endure more company’s meltdowns or we could suffer again from those executives who are greeted.
In the past 25 or 30 years, businesses in America have grown significantly in power and magnitude. Globalization has changed the way corporations do business and also have remain an endless discussion for those who see it as good or bad for corporate world. Large corporations like the retail store Walmart have turn out to be an enormous and dominating global organization. According to Mora...
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...mployee should feel that they could speak up if they see any unethical behaviors in the workplace without feeling that the company or individual will retaliate. Employees must have trust in colleagues. If a corporation has esprit de corps, they could keep a watch over their own behaviors. One of the most important qualities that should be in established in the workplace is a strong employee-manager relationship. If both employee and employer have a good relationship, they would both look out for the best interest of the company; corporate integrity would be a priority.
Principled “tone from the top”, corporate leader should make a commitment and repeated commitments all over the company to highlight the importance to the organization of compliance and ethical conduct, which could be accepted and integrated into every single level of the business operation.
On the surface, the motives behind decisions and events leading to Enron’s downfall appear simple enough: individual and collective greed born in an atmosphere of market euphoria and corporate arrogance. Hardly anyone—the company, its employees, analysts or individual investors—wanted to believe the company was too good to be true. So, for a while, hardly anyone did. Many kept on buying the stock, the corporate mantra and the dream. In the meantime, the company made many high-risk deals, some of which were outside the company’s typical asset risk control process. Many went sour in the early months of 2001 as Enron’s stock price and debt rating imploded because of loss of investor and creditor trust. Methods the company used to disclose its complicated financial dealings were all wrong and downright deceptive. The company’s lack of accuracy in reporting its financial affairs, followed by financial restatements disclosing billions of dollars of omitted liabilities and losses, contributed to its downfall. The whole affair happened under the watchful eye of Arthur Andersen LLP, which kept a whole floor of auditors assigned at Enron year-round.
Are businesses in corporate America making it harder for the American public to trust them with all the recent scandals going on? Corruptions are everywhere and especially in businesses, but are these legal or are they ethical problems corporate America has? Bruce Frohnen, Leo Clarke, and Jeffrey L. Seglin believe it may just be a little bit of both. Frohnen and Clarke represent their belief that the scandals in corporate America are ethical problems. On the other hand, Jeffrey L. Seglin argues that the problems in American businesses are a combination of ethical and legal problems. The ideas of ethical problems in corporate America are illustrated differently in both Frohnen and Clarke’s essay and Seglin’s essay.
Many organizations have been destroyed or heavily damaged financially and took a hit in terms of reputation, for example, Enron. The word Ethics is derived from a Greek word called Ethos, meaning “The character or values particular to a specific person, people, culture or movement” (The American Heritage Dictionary, 2007, p. 295). Ethics has always played and will continue to play a huge role within the corporate world. Ethics is one of the important topics that are debated at lengths without reaching a conclusion, since there isn’t a right or wrong answer. It’s basically depends on how each individual perceives a particular situation. Over the past few years we have seen very poor unethical business practices by companies like Enron, which has affected many stakeholders. Poor unethical practices affect the society in many ways; employees lose their job, investors lose their money, and the country’s economy gets affected. This leads to people start losing confidence in the economy and the organizations that are being run by the so-called “educated” top executives that had one goal in their minds, personal gain. When Enron entered the scene in the mid-1980s, it was little more than a stodgy energy distribution system. Ten years later, it was a multi-billion dollar corporation, considered the poster child of the “new economy” for its willingness to use technology and the Internet in managing energy. Fifteen years later, the company is filing for bankruptcy on the heels of a massive financial collapse, likely the largest in corporate America’s history. As this paper is being written, the scope of Enron collapse is still being researched, poked and prodded. It will take years to determine what, exactly; the impact of the demise of this energy giant will be both on the industry and the
For a company to be successful ethically, it must go beyond the notion of simple legal compliance and adopt a values-based organizational culture. A corporate code of ethics can be a very valuable and integral part of a company’s culture but I believe that it is not strong enough to stand alone. Thought and care must go into constructing the code of ethics and the implementation of it. Companies need to infuse ethics and integrity throughout their corporate culture as well as into their definition of success. To be successfully ethical, companies must go beyond the notion of simple legal compliance and adopt a values-based organizational culture.
"This is why the market keeps going down every day - investors don't know who to trust," said Brett Trueman, an accounting professor from the University of California-Berkeley's Haas School of Business. As these things come out, it just continues to build up"(CBS MarketWatch, Hancock). The memories of the Frauds at Enron and WorldCom still haunt many investors. There have been many accounting scandals in the United States history. The Enron and the WorldCom accounting fraud affected thousands of people and it caused many changes in the rules and regulation of the corporate world. There are many similarities and differences between the two scandals and many rules and regulations have been created in order to prevent frauds like these. Enron Scandal occurred before WorldCom and despite the devastating affect of the Enron Scandal, new rules and regulations were not created in time to prevent the WorldCom Scandal. Accounting scandals like these has changed the corporate world in many ways and people are more cautious about investing because their faith had been shaken by the devastating effects of these scandals. People lost everything they had and all their life-savings. When looking at the accounting scandals in depth, it is unbelievable how much to the extent the accounting standards were broken.
With the proliferation of the internet international Business transactions are more common today than ever. Globalization is now a key factor when creating a business strategy for most companies whether they are small family own businesses or huge corporations. Globalization however does not just involve selling a product in other countries. There are legal and cultural concerns that must be addressed. The legal aspects are fairly simple because in most places the laws are spelled out. It's the local customs, and regional way of doing things that can be tricky. Research on globalization has shown that it is not an omnipotent, unidirectional force leveling everything in its path. Because a global culture does not exist, any search for it would be futile. It is more fruitful to instead focus on particular aspects of life that are indeed affected by the globalizing process. (1). In this new economy, as it has been in the past, it will be the people not the machines who will determine a company's success. Having an effective Human Resource Management team that effectively analyze your company's current and future personnel needs is key in any business organization.
The term “ethical business” is seen, by many people, as an oxymoron. This is because a business’s main objective is to make as much money as possible. Making the most money possible, however, can often lead to unethical actions. Companies like Enron, WorldCom, and Satyam have been the posterchildren for how corporations’ greed lead to unethical practices. In recent times however, companies have been accused of being unethical based on, not how they manage their finances, but on how they treat the society that they operate in. People have started to realize that the damage companies have been doing to the world around them is more impactful and far worse than any financial fraud that these companies might be engaging in. Events like the BP oil
Enron Corporation was based in Houston, Texas and participated in the wholesale exchange of American energy and commodities (ex. electricity and natural gas). Enron found itself in the middle of a very public accounting fraud scandal in the early 2000s. The corruption of Enron’s CFO and top executives bring to question their ethics and ethical culture of the company. Additionally, examining Enron ethics, their organization culture, will help to determine how their criminal acts could have been prevented.
“When a company called Enron… ascends to the number seven spot on the Fortune 500 and then collapses in weeks into a smoking ruin, its stock worth pennies, its CEO, a confidante of presidents, more or less evaporated, there must be lessons in there somewhere.” - Daniel Henninger.
In many circumstances, employees’ behaviors are likely to follow their leader. Enron’s leadership has been extremely influential due to exemplified charismatic. For example, Heffrey Skilling and Kenneth Lay, CFO and one of executive member in Enron, greatly encourage employees to follow their lead. Their incompetence accounting profession directly affects lover level of employees. Eventually, those manipulating accounting activities affect company collapse. Once leadership has done unethical professional accounting behaviors, unethical acts become accepted. Employees have many reasons for remaining quiet. While Enron still have ethical internal rules, when leadership in Enron did not abide and did not provide corresponding example of employees to follow (Prentice 2003, p. 417). Which eventually make Enron’s become one of the largest corporate scandal frauds.
Focusing on what is best for the organization as a whole and not self greed, not focusing on short-term profits but the long-term profit goals for the shareholders, investors, and employees would help keep employees ethical (Ferrell, et al, 2009).When an employee is fearful of losing his or her job, unethical conduct can be the result of trying to keep that job (Ferrell, et al, 2009).When pressures are placed on employees to make money quick, fast, and in a hurry, the results could be unethical behavior (Ferrell, et al,
In the aftermath of Enron, Washington Mutual Bank, TYCO, and World Comm these companies went against the grain of what good ethical behavior is and what their respective company’s code of ethics were. The criminal justice system has made it clear that it will not allow companies and their executives to get away with the misuse of public trust by allowing them to make themselves rich at the expense of the employee. Where these crimes are both ethically and morally wrong, the CEO’s of major corporations are being punished by a ...
The paper focuses on the increased complexity of globalized organizations and methods of altering the process within the structure. Business and environment change constantly to sustain development in emerging markets and increase efficiency. Integration of relationships and processes of the world systems, help to manage local, regional and planetary balance to manage duplication of success become conceivable. The retail giant Wal-Mart exhibits its ability to transform the organization asynchronously with the increase integration of globalization.’ Wal-Mart unveils the type of integration possible between globalization, and business services as it adapts, eliminating redundancies and repetitive movement. It observes the effect and influence, propagated on business through it use of supply chains, and influence.
Ethical leadership is having an understanding of who you are, what your core values are, having the courage to live them all, in your personal life as well as your work life. Ethical leadership involves leading in a manner that respects the rights and dignity of others. Ethical decision making and leadership are the basis of ethical organizations. Leadership is a relationship between leaders and followers. The foundation of this relationship is trust. The leaders themselves must be ethical in their decisions and actions in order to influence others to behave accordingly. Ethical leadership is to know one’s core values and having the courage to live them through one’s life. Ethics and leaders go hand in hand; ethics is the heart of leadership.
This paper discusses the role of ethics in corporate governance. I seek to show the application of moral and ethical principles in corporate governance. Ethics is a topic that has generated a lot of interest in the last decade especially after high profile scandals. The failures of prominent companies such as WorldCom, Enron, Merrill lynch and Martha Stewart portrays the lack of corporate ethics. The failure of such business has seen an increased pressure to incorporate ethics in corporate governance. The result of corporate scandals has been eroding investor and public confidence. The entire economic system has experienced some form of stress from loss of capital, a falling stock market and business failures.