Business Ethics: Enron, Aristotle, Kellogg, and Fair Trade Analysis

This essay delves into various aspects of business ethics, starting with an analysis of the Enron scandal, highlighting the ethical issues that led to its downfall, such as a competitive environment and communication barriers. It then explores Aristotle's virtue ethics, comparing it with consequentialist and non-consequentialist theories. The essay further examines Kellogg's CSR statement in light of Kantian theory, pointing out inconsistencies between the statement and the actual product composition. Finally, it discusses different perspectives on fair trade, emphasizing its role in addressing global inequalities and promoting ethical business practices. The essay provides a comprehensive overview of ethical considerations in the business world, examining case studies and ethical frameworks.

Running head: ETHICS IN BUSINESS
Ethics in Business
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Table of Contents
Answer 1 – Ethical Issues of Enron Scandal.............................................................................2
Answer 2 – Aristotle’s Virtue Ethics.........................................................................................3
Answer 3 – Relevance of Kellogg’s CSR Statement with Kantian Theory...............................4
Answer 4 – Perspectives of Fair Trade......................................................................................5
References..................................................................................................................................7

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Answer 1 – Ethical Issues of Enron Scandal
Enron Corporation is a Texas based company, which is in the business of supplying
natural gas, energy trading and providing electrical utilities. It has been subject to a major
corporate scandal United States has ever seen since the 1980s. The scandal involved many
ethical issues by the authorities of the same (Sims and Brinkmann 2003). The major ethical
issues are as follows.
Enron has a brutal competitive environment that has led the employees to adopt
unethical measures in order to protect their employment in the company. The competitive
company culture is a serious ethical issue that has led to the downfall of Enron. The company
had incorporated a rating system that identifies twenty percent of the total number of
employees working at Enron per annum, who is unable to meet the least requirement criteria
of the company (Arbogast 2013). The company then pressurises the identified employees to
resign. The purpose of Enron for implementation of this system was actually to encourage the
employees to work harder to protect their job, however, it turned against the interest of the
company as a boomerang and did harm more than good to the same. The employees started to
adopt unethical methods like cheating in their work being unable to provide enough
productivity to the company in ethical ways. Gradually every employee of the company
started to compete among each other to show better performance to the company in fear of
losing job and started to cheat to achieve this goal. This created an unethical deceptive
environment within the company (Bishop 2013).
Another major ethical issue that was conceived due to the competitive environment of
Enron was the communication barrier among the employees working at different or same
level of the company hierarchy. The competitive environment of Enron encouraged the
employees in not sharing company resources with colleagues and barring communication

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with each other. Some employees fail to understand job requirements properly due to lack of
conversation. They then adopt unethical measures to hide their errors (Carroll 2013).
Answer 2 – Aristotle’s Virtue Ethics
Aristotle, one of the famous philosophers of all times has postulated his theory of
virtue ethics where he states that the ultimate goal in a human life is happiness, which can be
attained by improving the inherent virtues that a human being possesses from birth. Other
philosophers claim that the secret behind the improvement of happiness is to follow certain
rules of mortal pleasure (“Aristotle’s Virtue Ethics” 2017). Aristotle states that the virtuous
traits are incorporated within the human system but needs sufficient practise to control and
improve them. Among all the virtuous traits, he advises to give less focus on morality to build
a virtuous character. Aristotle provides a simple method to build a strong virtuous character.
His advice is to maintain a balanced approach to every action and emotion in a human life.
He cites an example in support of his theory where he says that it is not necessary to be
honest at all times, however, it is necessary to be honest at the right time. The basic principle
behind Aristotle’s Virtue Theory is not to have any virtue in excess or less but with the right
amount that is required during a situation (Yu 2013).

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The table below compares Aristotle’s virtue ethics with consequentialism and non-
consequentialism theories.
Aristotle’s Virtue Ethics Consequentialist Theory Non-Consequentialist Theory
States that to achieve
happiness in life cultivating
the inherent virtues is
necessary and that too much
or too less of any virtue is
unnecessary but the right
amount of virtue at the right
time is necessary.
This theory states that the
morality of an individual is
judged on the final
consequences of any action
performed by the same.
This theory states that the
morality of a person depends
on the intention behind any
action that is performed by
the same irrespective of the
outcomes the action may
have.
Advices to give less focus on
morality while cultivating a
strong virtuous character.
The theory depends on the
morality of a person.
The theory measures the
level of moral character of an
individual.
Example: It is unnecessary to
be angry at all times but is
needed to be angry at the
right time.
Example: A person saves a
dog from an accident. If the
dog makes a child happy,
then saving the dog shows
morality. If the dog harms
anyone then saving it is
immoral.
Example: A person saving a
dog from an accident shows
morality irrespective of the
consequences of saving it.
Table 1: Comparison between Aristotle’s Virtue Ethics, Consequentialism and Non-
Consequentialism
(Source: Thuniambral 2017)
Answer 3 – Relevance of Kellogg’s CSR Statement with Kantian Theory
The CSR statement made by Kellogg’s claims to provide products to its customers
that will preserve the health of the society. Kellogg’s claims that it sells nutritious products
that provide a healthy lifestyle to its customers rather than damaging them. However, the
results of Food Commission in 2001 on the tests conducted on 18 breakfast nutrition bars of
Kellogg’s prove otherwise. The commission reports that all the tested bars exceed the sugar

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content that is recommended by nutritionists and 10 of these bars have excessive amount of
fat, which is harmful for the health of any individual (Kelloggcompany.com 2017).
Kantian theory states that a right action or a wrong action can be judged depending on
the fulfilment of the objective rather than the result it causes (Follesdal and Maliks 2013).
Kellogg claims in its CSR statement that its objective is to provide healthy and nutritious
product to its clients. However, the test results mentioned above shows that it has failed in its
goal. Therefore, quoting Kantian theory it can be said that Kellogg was not sincere in its CSR
statement, which was made to convince the stakeholders regarding its social responsibility as
a company (choices 2017).
Answer 4 – Perspectives of Fair Trade
Fair Trade often brings to focus some of the crucial aspects of World Trade Rules that
has widened the gap between the rich and the poor. That is why fair trades are often grounded
in assumption that it is motivating the general mass against slave labour and providing justice
to poor farmers. There are other perspectives as well that fair trade can bring to the focus of
the general people (“Fair Trade” 2017).
Most of the branded products are manufactured by people from the lowest economical
status who cannot afford the goods they create themselves. Provisions should be made so that
these people can afford their own creations (“Fair Trade” 2017).
The rich countries export surplus harvest to the poor countries rendering the harvest
of the farmers in the poor countries worthless. Fair Trade focuses on this matter and ensures
that the poor farmers of the underdeveloped and developing countries get fare share for their
harvest (“Fair Trade” 2017).

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Many people die due to infectious diseases per year worldwide, as they cannot afford
the right medicine in time. This perspective can be considered on fair trade to provide the life
saving drugs at reasonable price so that the poor people can afford to save their lives (“Fair
Trade” 2017).
Corporate houses should have responsibility towards the global community, as the
business of any organisation is solely dependent on it. An organisation should be responsible
for all its employees who serve under its domain. It is necessary for all corporations to look
after the welfare of even the lowest category employee to maintain a steady performance in
every level of the organisation (“Fair Trade” 2017).

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References
Arbogast, S.V., 2013. Resisting corporate corruption: Cases in practical ethics from Enron
through the financial crisis. John Wiley & Sons.
Bishop, W.H., 2013. The role of ethics in 21st century organizations. Journal of Business
Ethics, 118(3), pp.635-637.
Carroll, A.B., 2013. Business ethics: Brief readings on vital topics. Routledge.
choices, M. 2017. Making healthy choices for children information and buying guides.
[online] CHOICE. Available at: http://www.choice.com.au/media-and-news/consumer-
news/news/childrens%20snack%20bars%20unhealthy.aspx [Accessed 26 Aug. 2017].
Follesdal, A. and Maliks, R., 2013. Kantian theory and human rights (Vol. 56). Routledge.
Kelloggcompany.com. 2017. Kellogg Company | Corporate Responsibility Report. [online]
Available at: http://www.kelloggcompany.com/en_US/corporate-responsibility.html
[Accessed 26 Aug. 2017].
Sims, R.R. and Brinkmann, J., 2003. Enron ethics (or: culture matters more than codes).
Journal of Business ethics, 45(3), pp.243-256.
Thuniambral, S., 2017. Unit-4 Ethics in Modern Philosophy. IGNOU.
YouTube. 2017. Aristotle's Virtue Ethics. [online] Available at:
https://www.youtube.com/watch?v=ruPdUxkqqoA&feature=youtu.be [Accessed 26 Aug.
2017].

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YouTube. 2017. Oxfam Fair Trade Clips. [online] Available at:
https://www.youtube.com/watch?v=9mgPEP8HAss&feature=youtu.be [Accessed 26 Aug.
2017].
Yu, J., 2013. The ethics of Confucius and Aristotle: Mirrors of virtue (Vol. 7). Routledge.