Corporate and organizational ethics

Document Type:Essay

Subject Area:Management

Document 1

Independence In accordance to the article the Dark Side of Independent Board Members, the management corrupted Enron as a legal entity like any other company by customizing the financial records with intent to personal gains and greedy character. The management was not working as a unit in the organizational leadership. Selfish management initiated practices to realize corrupt and greedy personal goals. Bonn & Fisher (2005) elaborates on how ethical code in an integrated corporate culture can lead to fraud detection and its deterrence. In the case of ethical dilemmas, there need to involve the employees so that the result as an aggregate good to the company. The Enron scandal projected negative effect to the larger business world upon the dissolution of Arthur Andersen accounting company.

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This brought enactment of Sarbanes-Oxley Act of 2002 to counteract the scandals of this nature. This extended on the fact that the institution lacked transparency and honesty in the business operations explaining why the two suffered costly (Jennings, 2002). The Chief Executive Officer to Enron was unethical upon confronting a financial analyst on securities when unethically responded to a question why the firm was deteriorating in performance. This translates to the unethical culture of the organization. However, the Enron’s management focused on short-term gains since most of the managers prioritized their personal needs not the overall demands of the organization. They provided purposely false financial reports to communicate the success they did not have so that they could increase their business operations hence making huge proceeds from the same.

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The success of an entity is highly depended on the management of its finances and thus planned and institutionalized principles to uphold its management is undoubtedly vital for the better performance (Gitman & Flanagan 2015) The masked optimistic performance did not last long since the fraudulent activities were noticed affecting the reputation and financial stronghold of the great company (Kolk, 2008). The unethical engagement and irresponsible management leading to low-risk management caused them their company. The decision making in an organization should be conclusive when incorporating the inputs of the employees which were not the case with the Enron Company. Conclusion Corporates and organizational ethics of an organization enhance the accountability between its management and the society surrounding its operations. Adherence to the set code of ethics promotes fair trading and transactional activities and generally provides framework for integrity in the business.

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