logo

Assignment on Business Ethics and Corporate Responsibility

   

Added on  2020-04-15

8 Pages2601 Words77 Views
RUNNING HEAD: Business ethics 00EnronBusiness ethics

Business ethics 1ContentsIntroduction.................................................................................................................................................2About Enron................................................................................................................................................2Accounting practices & scandal...................................................................................................................2Effect on Stakeholders.................................................................................................................................4Legal obligations..........................................................................................................................................5Conclusion...................................................................................................................................................5References...................................................................................................................................................6

Business ethics 2Introduction"Many critics of the concept of corporate responsibility have criticized business interests for their lack of ethics throughout their operations."Business ethics is set of rules that tell how business operates, how business decisions are made, how people (employees, competitors, suppliers, stakeholders, shareholders & customers) are treated. Ethical business behaviour improves productivity & living standards (Crane & Matten, 2016). Business ethics is all about doing good things & ignoring bad things at work place.Business ethics includes all ethics related issues that come while we conduct business activities. Corporate social responsibility (CSR) is subset of business ethics. It is company’s responsibility towards the environment, in which it operates. Once a person go through the CSR of company, can know the mission & responsibility of organisation towards society & economy. It takes care of human rights & environment protection. It is important to increase competitive advantage & to build trust with customers & employees (Schmitz & Schrader, 2015). It aims to ensure that a company operates it’s activities in an ethical way. Many companies publish their information on their CSR activity on their website. In this assignment ethical issue of Enron is taken. Enron was an American energy, commodities & services company. The practices & scandal that led to the issue are explained. Impact on shareholders, employees & government is also discussed as a resultof ethical issue.About EnronEnron was America’s seventh largest corporation. The company was established in 1985, by the merger of Houston natural gas & Inter North. Initially Enron started as Pipeline Company, expanded with launching broadband services & online website for trading commodities in 1999. It was the largest business online site & the company was getting 90% of income from the transactions over Enron online. In 2000 the growth of the company was fast & the annual profits reached to $100 billion. The stock price peaked at $90. But in 2001, the company’s condition started deteriorating. In the October the company revealed a loss of $618 million. The company become bankrupted on December 2, 2001. It was the biggest case of bankruptcy in US and revealed that it’s financial condition was sustained by well-planned accounting fraud, known as Enron scandal. Around 5600 employees lost their job. The company ended it’s bankruptcy in Nov, 2004. Accounting practices & scandalAccounting scandals arises from manipulation of financial statements. Accounting practices are intention manipulation of accounting records in order to make a company’s financial condition better. They always have adverse effect on the business. Accounting policies are implemented byaccounting practices. These are illegal activities & include misusing funds, understating expenses, overstating revenue, under recording liabilities, misappropriation of assets & not taking book keeping seriously enough (Hoàng Văn, 2014). Mark to market accounting and special purpose vehicle are some techniques used to conduct such illegal activities. In the mark

End of preview

Want to access all the pages? Upload your documents or become a member.

Related Documents
Enron Scandal: Role of CEO, Significance of Ethics and Multi-Stakeholder Perspective
|8
|2329
|256

Analyzing Enron's Case in Relation to Ethical Corporate Governance and Sarbanes-Oxley Act, 2002
|7
|1919
|75

Enron Scandal: Corporate Governance Failure and the Sarbanes-Oxley Act
|11
|2337
|90

Enron Fraud Scandal: Corporate Governance and Sarbane Oxley Act 2002
|10
|2812
|81

Governance and Fraud: Analyzing Enron and Fujifilm Scandals and Solutions
|9
|2098
|435

Comparative Corporate Governance and International Operations
|11
|2693
|309