Ethical Analysis: Enron's Issues, Virtues, and Fair Trade Perspectives

This essay delves into the ethical issues exposed by the Enron scandal, focusing on the creation of Special Purpose Vehicles (SPVs) to mask financial performance and the manipulation of employee investments. It examines the concept of virtuous development as a learned skill, contrasting consequentialist and non-consequentialist ethical theories. Furthermore, the essay critiques Kellogg's Corporate Social Responsibility (CSR) statement, highlighting its insincerity and contradiction of Kantian ethics. It also explores perspectives on fair trade, including subsidizing farmers, offering affordable healthcare, and revising trading rules to address the gap between rich and poor. Finally, it argues for the responsibility of corporations to the international community, emphasizing their role in improving the economy and conditions of the communities in which they operate. The essay concludes with a bibliography of cited sources.

Last Name 1
Business Ethics
Student’s Name
Name of the Class
Professor’s Name
City
State
The Date

Last Name 2
Business Ethics
1. Ethical issues from the titled article “Enron Ethics”
The first major ethical issue in the article is the creation of “Special Purpose Vehicles
(SPVs)” by Enron. The company entered into a partnership to raise money and boost its position
in the market (Sims & Brinkmann, 2003). However, the management applied deceptive methods
to mask its declining financial performance. Partnerships allowed the company to sell assets and
book revenues before to a partnership. This ethical issue enabled the company to generate huge
revenues. Partners and potential investors thought that the company was performing well and
continued to invest. Besides, the SPVs included a fraudulent technique to hid debts from the
balance sheet. The SPVS is an ethical issue because a conjunction of motive and opportunity
leads to an ethical hazard (Pendse, 2012).
The second major ethical issue was encouraging employees to invest heavily in the
company without informing them of the financial status. The business executives were aware
that the company was making significant losses. A few business executives were earning
millions of dollars at the expense of the ignorant workers. Most of the employees had invested
their life-savings in Enron with the hope of earning good returns. There are indicators that the
executives knew that the company would run bankrupt. Jeffery Skilling resigned from his
position as the CEO when the accounting dealings of Enron became intricate (Sims &
Brinkmann, 2003). This issue is an ethical issue because the business management propagated
corruption on a colossal scale without considering the employees’ investment. The situation can
be attributed to fraud on a large scale.
2. How to develop virtuous

Last Name 3
The primary concept is that virtuous is like a skill that can be learned and practised.
Hence, humans can learn and practice skills in their daily life. Aristotle’s virtue ethics is not
absolute. There is thus a chance for every human being to develop and enact virtuous. A person
can make good judgement when it is desirable or at the right time. Once a person develops
virtuous, they will be in a position to express good character in the most deserving events.
Consequentialist judges whether the act is right or wrong based on the results of the
action (Shaw, 2008). If the results of an action are good, then it will be considered as right. Even
if the intentions of a person were wrong, the action would be judged based on the consequences.
This theory differs from virtue ethics because virtue ethics judges the action rather than the
outcome.
On the other hand, non-consequentialist considers the reason for a certain action and not
the outcome (Shaw, 2008). This theory judges people on how good their intentions were
regardless of the consequence. For instance, if a wrong action leads to a good outcome then it
will be considered as good. Conversely, if a right action results in a wrong consequence, then it
will be considered as wrong.The main difference in these three theories is about decision making
and outcome of the decision. This difference is evident in peoples’ character and judgments
when faced with moral dilemmas.
3. Kellogg’s CRS statement
The Kellogg’s CRS statement is insincere. The CRS statement is structured to convince
the public that the company is socially responsible. Additionally, the company aims to attract
potential customers to the business. In its CRS statement, Kellogg argues that their products are
nutritious and meant to enhance healthy lifestyles. However, different organisations have shown

Last Name 4
that the Kellogg’s products are unhealthy. The Food Commission detected high levels of sugar in
breakfast bars. Australian Consumer Magazine found high levels of saturated fats in LCM bars.
False information by organisations about their CSR practices might lead to misleading
actions (Rühmkorf, 2015). The placement of false information in the CSR is always meant to
mislead consumers to purchase certain products. The incidence of Kellogg is similar to other
ethical issues whereby companies fail to observe their CRS statements. Kellogg is striving to
maximise stakeholders’ value through its unethical practices. The management might be
propagating the view that business exists to maximise shareholder only.
Application of Kantian theory
Kellogg’s CRS statement contradicts the Kantian theory of ethics. According to Kantian,
one should never treat another human being as a mere means to an end (Sensen, 2011). Actions
are only considered as moral if the autonomy of human beings is respected. Kantian further
argues that an action is moral if it is applicable as a universal law. Kellogg’s actions are unethical
since the company fails to respect human beings autonomy. The sale of innutritious and
unhealthy foods is not universally accepted. Due to these aspects, Kellogg is insincere, and its
actions are unethical.
4. Perspectives of fair trade that can be considered
Fair trade is a broad topic that covers many perspectives. The central theme in fair trade,
however, revolves around improving the living standards of people. One of the most important
perspectives of enhancing fair trade is subsidising farmers. Farmers can be empowered to
produce more even in small scale farming. Apart from producing more, subsidies will also help
farmers to produce high-quality products. The products can then be exported to other countries.

Last Name 5
Another perspective is offering affordable health. Studies have shown that millions of people die
annually due to infectious diseases. For instance, Australians living in rural areas experience
poorer health status (Thomas et al., 2015). Affordable healthcare will help such community to
access primary health care services.
The trading rules are further causing a wide gap between the rich and poor. A review of
trading rules can help to address this discrepancy. Trading rules should specifically focus on
importation. Cheap importations have a significant adverse impact on local production (Oxfam
Fair Trade Clips, 2007). Trading rules should be fair and designed to improve equality.
Whether corporations have a responsibility to the international community
Corporations have a responsibility to the international community. Corporations have a
moral responsibility to improve the economy and condition of the community where they operate
(Brennan et al., 2011). This aspect insinuates that corporations should not focus on making
profits only. Thus, corporations should include their responsibility to the global community in
both short-term and long-term goals. The responsibility of the corporations can also be viewed as
corporate philanthropy.

Last Name 6
Bibliography
Brennan, . et al., 2011. Corporate social responsibility : the corporate governance of the 21st
century. 2nd ed. Wolters Kluwer Law & Business.
Oxfam Fair Trade Clips. 2007. [Online Video]: tombottoms.
Pendse, S.G., 2012. Ethical Hazards: A Motive, Means, and Opportunity Approach to Curbing
Corporate Unethical Behavior. Journal of Business Ethics, 107(3), pp.265-79.
Rühmkorf, A., 2015. orporate social responsibility, private law and global supply chains.
Edward Elgar Publishing.
Sensen, O., 2011. Kant on human dignity. Walter de Gruyter.
Shaw, W., 2008. Business Ethics. 6th ed. Thomsom Wadsworth.
Sims, R.R. & Brinkmann, J., 2003. Enron Ethics (Or: Culture Matters More than Codes). Journal
of Business Ethics , 45, pp.243-56.
Thomas, S.L., Wakerman, J. & Humphreys, J.S., 2015. Ensuring equity of access to primary
health care in rural and remote Australia - what core services should be locally available?
International journal for equity in health, 14(1), p.111.