Question is about the Enron Scandal in 2001 There is no case

Question is about the Enron Scandal in 2001... There is no case study... it is just based off of the case in general

Does the company have a specific code of ethics? Were any of the components of the code violated? Discuss. Determines if the ethical violations identified in the case violate components of the company’s own Code of Ethics and describes each violation in detail

Solution

Enron had a set of ethical code defined in their corporate culture. The set of ethical code of Enron’s was based on respect, integrity, communication, and excellence.

The actual code of ethics for Respect was that ‘We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don’t belong here’

Similarly for integrity ‘We work with customers and prospects openly, honestly and sincerely. When we say we will do something, we will do it; when we say we cannot or will not do something, then we won’t do it’.

And for Communication ‘We have an obligation to communicate. Here we take the time to talk with one another and to listen. We believe that information is meant to move and that information moves people’ and finally for Excellence ‘We are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for everyone. The great fun here will be for all of us to discover just how good we can really be’.

Enron violated the codes of ethics for Integrity and communication breaking the integrity and not communicating the actual financials and manipulating the financials and the balance sheet.

They broke integrity by not being Honest in their practice, did not disclose the actual financial details, misrepresented the financial calculations making it complex for the stakeholders to understand and thus posted a picture that was not a honest one, but filled with bad intentions. So predominantly the code for integrity and communication was violated, ensuring that the interested parties and stakeholders does not understand what was going on, making huge and false claims resulting in the balloon being blown out of proportion and thus finally breaking to become nothing.