Business Ethics: Analysis of Enron, CSR, and Fair Trade Practices

This essay provides a comprehensive analysis of business ethics, examining key ethical issues through the lens of the Enron case study, corporate social responsibility (CSR) practices, and fair trade principles. The essay identifies and discusses the primary ethical concerns arising from Enron's actions, including the manipulation of employees and the creation of an unethical business culture. It further explores virtue ethics, referencing Aristotle's views on happiness and virtuous behavior. The analysis extends to Kellogg's CSR practices, evaluating their ethical implications using the Kantian theory. Finally, the essay considers the complexities of fair trade, addressing its role in global economics and its potential shortcomings. The work provides a valuable resource for students seeking to understand ethical dilemmas in business and corporate responsibility, with insights into case studies, theoretical frameworks, and real-world applications.

Running head: BUSINESS ETHICS
Business Ethics
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
Answer to Question No 1................................................................................................................2
Answer to Question No 2................................................................................................................3
Answer to Question No 3................................................................................................................4
Answer to Question No 4................................................................................................................5
Reference List..................................................................................................................................7

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Answer to Question No 1
The first key ethical issue that have been identified from the case study of Enron has been
that they have asked their employees to invest hugely in their organization although the
executives and the management were conscious that the firm was not doing well at all behind the
curtains. The organizations has to give up an earnings of over $390 million with their trading
from their corporations like in this case Chewco investments and right after two months when
the CEO Jeffery Skilling resigned from his post. The stock prices of Enron has fallen and
reaffirmed the earnings and the revenues of the organization. This situation ultimately compelled
Enron to freeze their shares in order to safeguard their organization. This is a key ethical concern
as the managers and the administrators had knowledge about the downfall of the organization
and influenced their employees to undertake investment in the organization, thereby destroying
their future and their lives financially and in a way enticing their staffs and their employees to
fall with the managers due to the ineffective decisions undertaken by them.
The second ethical issue that has been identified has been the unethical culture and
environment within the business of Enron. The company Enron had a deficiency of ethical
cultures of business, which was started by the management of the organization (Baer 2015). The
company would recognise and reward those employees who were ready to accept the greedy and
belligerent culture that Enron had in mind and therefore would appoint and hire those employees
who gets increasingly motivated with money. The culture of the organization has been one of the
major factors that led to the decline of Enron as there has been a rise in the illegal and unethical
activities were carried within the business organization. The issue and the concern with the
unethical attitude of the managers was that their encouragement towards unethical actions

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motivated the employees to become unethical themselves as they discovered that they would
only be rewarded if their actions were unethical in nature.
Answer to Question No 2
As cited by Toner (2015), virtues are similar to behavioural habits and is a thing that is
done on a continuous basis. Thus, the development of a trait that is virtuous in nature is obtained
with the help of the habits and surroundings for the entire life. The thought of being virtuous
means to share the good nature and the principles of nature of virtue starts as a child and what is
experienced and seen around in the nature of virtuous appearances. On the other hand, Aristotle
has described that the ultimate aim and goal for every human beings is to be happy. There have
been several other philosophers who have explained that the mode of being happy and satisfied
is by being virtuous. A human being can be virtuous by making use of their moral and
intellectual traits that can be influential for becoming virtuous. It has even been mentioned that
being virtuous does not mean being honest all the time or being angry at a significant level but
maintaining a balance between being honest and angry. Individuals needs to show their honesty
and anger according to the situation they face (Demuijnck 2015). It has been observed that one
can be virtuous by avoiding any extremities in emotions and actions. This theory has been in line
with the consequentialist and non-consequentialist theories as it is seen that consequentialist
theory judges the value of right and wrong by looking at the result that action would have. On
the other hand, non-consequentialist theory looks in to the right or wrong based on the internal
traits of the action (Alfano 2016). Therefore, this theory would be compared with the
consequentialist theory as virtue of ethics would depend on the end result of the action and the
emotions that have taken place.

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Answer to Question No 3
The Corporate Social Responsibility practice of Kelloggs has been able to mislead the
consumers and the public with respect to their product as it has been found that their product has
been harmful and therefore is not sincere. Kellogg has disclosed that they have been selling their
nutritional products and have even maintained a normal and healthy regime. On the other hand,
their product has been found to be comprised of saturated fats that may be harmful for human
beings. It can be stated that their products has not been encouraging a quality and healthy life,
which has been contrary to the CSR disclosure provided by the company. In this respect, it can
be described that Kellogg had been making use of practices in their business that have been
unethical in nature. Kellogg should not have promoted their product to be healthy and promotes a
healthier lifestyle in their CSR reports. The firm had simply tried to impress and convince their
stakeholders that Kellogg is a community responsible organization and has been hiding the
reality in order to increase their profit (Kleinberg, Nahari and Verschuere, 2016). This could
leads to a fraudulent claim if the organization is making false statements without being sincere
towards the society.
By making use of the evaluation of the Kantian theory for the assessment of the
Kellogg’s CSR statement, there have been various issues. Kantian theory deals with the moral
moral beliefs that concentrates on the factor and the motive behind any act. There are four
elements in the Kantian theory that are mainly taken into consideration and they include the
universal acceptability, categorical imperative, proper will and the fundamentals of respecting
individuals.
With respect to this scenario, it is seen that Kellogg does not have a proper will. The
main purpose of Kellogg has been to increase their level of profit, which had even been earlier.

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The next factor has been the introduction of the categorical imperative and it has been observed
that this element does not even validate the acts that have been performed by Kellogg. It is
known that categorical imperative has been expressed as the actions undertaken by a party like a
law that is universal in nature. The decisions and the performance undertaken by the firm
requires to be implemented everywhere all over the globe. Thus, it would not be authentic if the
organizations worldwide undertake such fraudulent claims with respect to their product
superiority in their CSR reports as this would create a crisis of trust and lead to a conflict among
the organization and the public (Harjoto 2017). Thus, it can be said that the actions that have
been undertaken by Kellogg cannot be granted in accordance to the Kantian theory of categorical
imperative. In accordance towards respecting the individuals, it has been observed that Kellogg
has falsely acclaimed that their products are healthy and thereby have kept their customers within
a false image so has not respected the customers and the human beings.
Answer to Question No 4
Fair trade has been developed in order to eliminate the gulf between the rich and the
poor. Fair trade has been established in order to provide assistance to the people of the
developing countries and thereby increasing the level of balance in the worldwide economy
(Geldres-Weiss et al. 2016). However, there are various other perspectives that can be
considered as well. Fair trade has overlooked the problem of child labour, which has been a
global issue. Child labour has led to adverse working environment and has an impact on the
future of the children who are working in the dangerous and laborious working environment.
Fair trade should even look to construct community building that would be influential for the
developing newer talents and knowledge to the backward people so that they can become
optimistic and perform their tasks in an effective manner. The companies and the organizations

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that are operating in the global economy has a responsibility towards the global community
(Doherty, Davies and Tranchell 2013). It is the duty of the organizations to develop a plan and
strategies that would benefit the community and would even aid the developing countries as
well. The strategies to increase the level of export and and lower the level of import from the
developing countries would be beneficial for the enhancement of their economy.

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Reference List
Alfano, M., 2016. Michael W. Austin, ed. Virtues in Action: New Essays in Applied Virtue
Ethics.
Baer, R., 2015. Ethics, values, virtues, and character strengths in mindfulness-based
interventions: a psychological science perspective. Mindfulness, 6(4), pp.956-969.
Demuijnck, G., 2015. Universal values and virtues in management versus cross-cultural moral
relativism: An educational strategy to clear the ground for business ethics. Journal of Business
Ethics, 128(4), pp.817-835.
Doherty, B., Davies, I.A. and Tranchell, S., 2013. Where now for fair trade?. Business
History, 55(2), pp.161-189.
Geldres-Weiss, V.V., Soto, M.A., Ramos, H.R. and Uribe, C.T., 2016. Social Capital and
International Business Networks: The Case of a Fair Trade Organization. J Account
Mark, 5(168), p.2.
Harjoto, M., 2017. Corporate social responsibility and corporate fraud. Social Responsibility
Journal, (just-accepted),
Kleinberg, B., Nahari, G. and Verschuere, B., 2016. Using the verifiability of details as a test of
deception: A conceptual framework for the automation of the verifiability approach.
In Proceedings of NAACL-HLT (pp. 18-25).
Toner, J.H., 2015. Morals under the gun: The cardinal virtues, military ethics, and American
society. University Press of Kentucky.

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