Business Failure
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Running Head: BUSINESS FALIURE
Business Failure
University of Phoenix
Business Failure
A business situation that I find very unethical is the Enron situation. Enron was a large corporation with hundreds of hard working employees. People trusted this company with their life savings. Management was not being responsible with their employee’s money. These hard working employees lost all of their life’s savings because of the unethical decisions of management. People were forced into foreclosure because of their inability to pay their mortgage. I think that the Enron experience is a perfect example of how you can question organizations ethical values.
Enron Corporation was an American energy company based in Houston Texas and employed approximately 22,000 employees. It was one of the world's leading electricity, natural gas, pulp and paper, and communications companies, with claimed revenues of nearly $101 billion in 2000. At the end of 2001 it was revealed that its reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud. As the scandal unraveled it was revealed that much of its profits and revenue were the result of deals with special purpose entities or limited partnerships (which it controlled). The result was that many of Enron's debts and the losses that it suffered were not reported in its financial statements. Enron underwent the largest bankruptcy in history by mid-November 2001 (the largest chapter 11 bankruptcy until that of the investment bank Lehman Brothers on September 15, 2008).
Enron had created offshore entities, units which may be used for planning and avoidance of taxes, raising the profitability of a business. This provided ownership and management with full freedom of currency movement and the anonymity that allowed the company to hide losses. These entities made Enron look more profitable than it actually was, and created a dangerous spiral in...
Business Failure
University of Phoenix
Business Failure
A business situation that I find very unethical is the Enron situation. Enron was a large corporation with hundreds of hard working employees. People trusted this company with their life savings. Management was not being responsible with their employee’s money. These hard working employees lost all of their life’s savings because of the unethical decisions of management. People were forced into foreclosure because of their inability to pay their mortgage. I think that the Enron experience is a perfect example of how you can question organizations ethical values.
Enron Corporation was an American energy company based in Houston Texas and employed approximately 22,000 employees. It was one of the world's leading electricity, natural gas, pulp and paper, and communications companies, with claimed revenues of nearly $101 billion in 2000. At the end of 2001 it was revealed that its reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud. As the scandal unraveled it was revealed that much of its profits and revenue were the result of deals with special purpose entities or limited partnerships (which it controlled). The result was that many of Enron's debts and the losses that it suffered were not reported in its financial statements. Enron underwent the largest bankruptcy in history by mid-November 2001 (the largest chapter 11 bankruptcy until that of the investment bank Lehman Brothers on September 15, 2008).
Enron had created offshore entities, units which may be used for planning and avoidance of taxes, raising the profitability of a business. This provided ownership and management with full freedom of currency movement and the anonymity that allowed the company to hide losses. These entities made Enron look more profitable than it actually was, and created a dangerous spiral in...