Ethical Framework and Analysis of the Enron Scandal: A Business Report

This report provides an ethical analysis of the Enron scandal, examining the company's background, key aims, and activities within the bookkeeping/accountancy context. It outlines the key ethical principles associated with the case, including promise-keeping, truth-telling, and justice, along with personal and professional ethical principles that were violated. The report describes three workplace situations within Enron where complex ethical decisions were required, detailing the circumstances, involved parties, unethical behaviors, and the impact on employee decision-making and organizational culture. The analysis highlights the role of financial rewards and incentives, illegal behavior, and the company's unethical culture in contributing to the scandal. The report emphasizes the importance of transparency, adherence to laws, and ethical conduct to prevent similar situations.

Table of Contents
Framework and protection .........................................................................................................................

The Situations - Background and Circumstances
This section should contain a summary of the chosen organisation chosen along with the
key ethical principles associated with the work. You will need to provide a summary of the
three (3) ethical situations identified with a brief analysis of the circumstances that
surround it.
Ensure you include all of the following information in this section of your report:
a) State the organisation and summarise the key aims and activities in undertakes within the
bookkeeping/accountancy context, including the typical job roles and specific tasks
practised by staff.
Enron Company is founded in year 1985 which is a merger among the Houston Natural Gas
Company and Omaha based InterNorth incorporated. Deregulation of the firm markets allow
organization to place a bet on the future price in order to earn profit as well as in this Enron
was poised in order to take benefit. It is mainly founded by Kenneth Lay in year 1985 and its
head office was located at Texas, United State. The main aim and activity related to
respective scandal is - The Enron Scandal take place in October 2001 when that was
uncovered that America's seventh biggest organization was engaged with corporate
debasement and bookkeeping misrepresentation. The outrage encompassing the Enron
energy organization included political ramifications because of Enron's nearby connections
with the White House, the Deregulation of Enron permitting the enterprise to work to a great
extent liberated from US government examination, deception in income reports, a false
'energy emergency's and theft embraced by Enron Executives. The Enron embarrassment
inevitably prompted the chapter 11 of the enterprise along with and the disintegration of the
inspecting organization Arthur Andersen. Enron investors lost $74 billion paving the way to
its chapter 11, and its representatives lost their positions and billions in annuity benefits.
Enron CEO Jeff Skilling was condemned to 24 years, previous CEO Kenneth Lay passed on
before spending time in jail.
b) Outline the key ethical principles associated with this type of work, including those
specific to your own role. Provide examples of both personal and professional ethical
principles (including those related to industry legislation, regulations, codes, and other
instruments) and discuss their effect on any actions and behaviours in the workplace.
There are several key ethical principles which are associated with the Enron Scandal such as
promise keeping, truth telling and justice. This is so because in respective scandal owner not
provide proper information to the investors or employees. Due to this numbers of investor’s
loss their money as well as employees also faced loss as they invest their pension amounts. In
addition to this, in respective scandal both personal as well as professional ethical principles
are included such as personal ethical principles are like loyalty, honesty, equality and fairness
and many more. But in this scandal these all personal ethical principles are ignored in order
to attain more and more profit. Along with this there are several professional ethical
principles which are not considered while conducting the respective scandal such as
adherence of laws, accountability of practice, loyalty with others, respect the others, honesty
and many more. Moreover there are several legislation which need to adopted in by Enron
such as transparency with employee, customer and investors as through that they able to
avoid respective situation. Furthermore it also helps in avoiding situation of bank curpsy
situation at the potential marketplace.

c) Describe three (3) different workplace situations within the organisation where complex
ethical decisions are required. For each one, state why it requires this level of decision-
making and include details of any specific unethical behaviours or actions that may occur. In
discussing the situations, consider the following questions:
 How would the situation come about?
In this first situation is take place when a company have option to attain huge profit by going
on the unethical track such as hiding information from others and many more. In this another
situation is related to aspects of transparency such as it is right of customers, employees as
well as investors to understand and know about the situation in effective manner. The third
situation on which ethical decision must be develop that is related to right of employees and
investors who invest their time as well as money in the company.
 Who would be involved?
There are numbers of people who are involved in Enron Company Scandal such as David
Bermingham, Giles Darby and Gary Mulgrew get arrested in April 2004 and pleaded
innocent. PREVIOUSLY CONVICTED AT TRIAL: * November 2004, four former Merrill
Lynch & Co. executives and a former Enron finance executive, conspiracy and fraud.
 How would the employees cross the line? In what instances would illegal behaviour
be evident?
The employees of Enron Company cross the line when their benefits are cut by the company
due to the impact of their unethical behaviours. In respective scandal employees are not not
get proper pay as well as their pension benefits along with other benefits are get cut off.
Along with this after the bank solvency of Enron Company employees loss their job. Due to
these all issues employees get violence as well as they do stick on the road. The illegal
behaviour related to respective situation is that Enron Company adopt unethical aspects in
order to attain more and more profit.
 What would be the circumstances that would lead to the unethical and/or illegal
behaviour and how would this this impact on the employees decision making e.g
financial rewards and other incentives?
The unethical or illegal behaviour which is related to the Enron Company is that respective
company allow other firm to conduct business in to united state without following any rules
and regulation of the nation. This is possible for the Enron Company as they have direct and
effective contact at the white house. This illegal or unethical situation of Enron Company
directly impact on the employees decision making as at the initial stage of company they are
loyal toward the firm but after the firm get bankruptcy they get unemployed as well as they
also experienced several loss related to finance. These loss are related to employees pension,
remuneration and numbers of other benefits. Moreover illegal function of the company also
impact on the financial rewards and other incentives as they not get all these things after the
sandal.
 What aspects of the organisation’s culture would play a part?
In a company cultural play as essential role as according to that business operations and
functions are conducted. In respect of Enron Company their working culture is not
appropriate as well as it is also not ethical. It is so because they allow other companies to
conduct business operation and function without following respective nation rules, regulation
and policies. They also not disclose all the necessary as well as truth information in front of
their potential customers and employees. This also show that in Enron Company there is no
proper culture as well as they are doing fraud with their investors and employees.