Ethical Dilemmas of Enron Corporation

Running Head: ETHICS
Ethical Dilemmas of Enron Corporation
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Ethical Theories of Egoism and Deontology:
The egoism is treated as a part of philosophy, the ethical theory of egoism is about the
treatment of the self-interest for morality. The claim made by the ethical egoism is that the
actions and performances are taken place for enhancing the self-interest of individuals (Levit,
2014). It evolves with morality with the pursuit of self-interest. The egoism tends to comply with
the interest of an individual rather than the good for the people around and this can result in the
creation of a huge conflict in the same surrounding (Jason, 2014). However, ethical egoism is the
opposite of the assumptions that are already existing in philosophy. As discussed above in case
of the occurrence of the indifference of the interest then ethical egoism can never provide with
any kind of solution to that particular issue.
For Enron the conflict of interest occurred when the partnerships were presented to be
from the outside investors but it was seen to be internal. The officials of the company have
eventually closed the paths of the partnerships which were classified as per the rules from FASB
(Sims & Brinkmann, 2003). Many officials starting from the CEO to the managing directs were
associated with the partners companies. Hence, the egoism was clear to occur through the
conflict of interest between the officials.
In the arena of ethical theory, deontology is the rule that differentiates the correct from
the incorrect. This rule is mostly associated with Immanuel Kant who is a philosopher, he shared
his view on deontology that the actions taken under ethics are mostly are the followers of the
universal laws of morality. The implementation of deontology is easy, such that people must
have the sound knowledge of the rules in their area of action and complete their duties (Tsalikis,
2018). This is also applicable to the human intuition of right or wrong ethical practice.
Deontology does not deal with the benefits or the required cost from any situation. This does not

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consist of any uncertainty or subjectivity as the rules that have to follow are pre-defined.
However, blindly follow of deontology can be unacceptable to many irrespective of its strength
available. A contradicting situation of deontology can be observed if a missile is launched for
harming people and a person gets its update, he might want to stop it by hacking the system.
However, this situation will be going against the rules as well as breaking the codes of
professionalism, which is totally against deontology. It has be considered to be consistent in most
of the general situation as the duties are carried out well in the name of ethical perspective (Filip
et al., 2016). Hence, the theory is applicable mostly in the practical situations. The ignorance of
the ethical decision making gets attached to deontology too as consequences of action are of no
one’s control. Threshold deontology comes to the rescue of the prior situation with several
benefits for the emergency situations.
As per the case study is concerned, it was totally wrong from the perspective of Enron to
keep the details of the company from the public which were of totally their interest.
Application of AAA Model for Decision Making:
The AAA model is the abbreviation of American Accounting Association model that presents a
specified structure for taking ethical decision within it. It was developed in the year of 1990 by
Rockness and Langenderfer, they have propped a step by step process that goes up-to seven steps
for taking decision totally in an ethical way (Brown-Liburd, Issa & Lombardi, 2015). The seven
steps are as follows:
(1) Establishment of facts- This is the first step of the process carried out for taking the decision
and in this step the consideration are unambiguous.
(2) The ethical issues are identified for the undertaken case- The facts of the undertaken case
are laid out with the aid of asking the issues of the case specifically related to the ethical aspect.

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(3) Principles, norms and values are identified for the undertaken case- The decisions are
placed for the variable context such as the ethical, behavioural and social. For the identification
of the norms, principles and values the code of ethics in the professional field as well as in the
occurrence of expectation in a social environment (Banker et al., 2014).
(4) Identification of all alternative actions- The actions are stated clearly without taking the
norms, principles and values under consideration in the context of professionalism. The outcome
of each action are considered which is mandatory to happen. This takes place irrespective of its
appropriateness.
(5) Principles, norms and values are matched with the available options- The identified
norms, principles and values are presented and matches with the available options that are found
in the prior step. Eventually, the taken options that are associated with the undertaken norms,
principles and values are observed also which does not.
(6) Associated consequence are taken under consideration- The implications that are obtained
from the above steps are all unambiguous which the ultimate goal of the model (Shipman,
Swanquist & Whited, 2016). The final decision will be totally based on the overall knowledge
acquired and implementation of the actions with highest priority to each.
(7) Appropriate decision making- After following all the prior steps, then the appropriate
decision is taken.
The scenario for the undertaken case study is Enron a mega business, with its increasing
popularity in the business community and its competitive culture, the working officials of Enron
had to keep their reputation at top. They went for making partnership and taken up questionable
methods of accounting to keep their status high. The creation of the pseudo partnership made
them to sell the assets and generate earnings for the company. In the overall process they have