BPMN3123 Management Ethics: Enron Movie Review Individual Assignment

This individual assignment reviews the movie "The Crooked E: The Unshredded Truth about Enron," examining Enron's ethical breaches through the lens of management ethics. The review, drawing from chapters 1-4 of the course, discusses the violation of moral standards, the universality of moral values, and the three types of ethical issues: systematic, corporate, and individual. The assignment highlights corporate issues such as the company's negligence leading to accidents, and individual issues like CEO Jeffrey Skilling's actions. It explores arguments supporting business ethics and analyzes the application of utilitarianism, moral rights, and economic equality within the Enron context. The report also covers government and market competition aspects, including the mixed economy of the USA and the oligopolistic market structure of Enron, and the impact of the scandal on California and the financial markets. The review underscores the devastating consequences of Enron's unethical practices on employees, consumers, and the economy.

BPMN3123 MANAGEMENT ETHICS
SEMESTER ONE SESSION 2020/2021 (A201)
INDIVIDUAL ASSIGNMENT 1
MOVIE REVIEW: “THE CROOKED E: THE UNSHREDDED TRUTH
ABOUT ENRON”
GROUP AG
LECTURER: DR. MOHD NIZAM BIN M SARKAWI
ASSIGNMENT BY:
MATRIC NO NAME
262816 SITI NOOR AZREENA BINTI ABDUL RASHID
DATE OF SUBMISSION: 18 NOVEMBER 2020

Online Video Assignment 1 (Input from Chapter 1-4) The Crooked E
“The Crooked E: The Unshredded Truth about Enron” is a film about Enron's rise and
fall from grace, as seen through the eyes of one of his workers, as many have lost their jobs
and retirement funds. It was released on January 5, 2003 and was directed by Penelope
Spheeris. What happened to Enron was the corporation's bankruptcy was the biggest on
record at the time, which is at $63 billion in assets. The breakdown of the business rocked the
stock markets and almost devastated the oil sector.
Based on Chapter one of Management Ethics “Basic Principles: Ethics and
Business”, Enron is violating the Moral Standards characteristics. First, moral values deal
with problems that are extreme, for example issues that we feel can be profoundly wrong or
benefit human beings greatly. In American society for instance, most people have moral
values against fraud, rape, stealing, enslavement, child violence, murder, assault, violating the
law, slander, and so on. Many of these deals specifically with problems that individuals
believe are severe types of injury. Since they are about serious matters, breaking moral
principles is seen as severely incorrect and we believe that we have a stronger claim on the
responsibility to follow moral standards than traditional standards do. Enron hides their debt
from public and also their employees because if they reveal the debt, it would expose the bad
deals of management and will lower the stock price. The company also pays huge bonuses to
their employees based on phony profits. They are selling stocks while telling everyone to buy
more.
Next, it is thought that moral values are universal. That is, if we truly believe that
moral values such as “Do not steal” or “Do not lie” are moral norms, then we will also feel
that everyone should strive to live up to those norms, and when we see someone transgressing
them, we will get angry. When we heard that Enron's managers were all lying to us and their
clients, we did not believe it was okay for them to break our moral values against lying and
fraud. We did not think, "It was all right for them to lie and steal, as long as they felt it was
all right." nor did us think, "Although I feel that lying and stealing is wrong, they don't have
to comply with my moral standards." On the contrary, precisely because they felt that the
standards against lying and stealing are moral standards, the public was angry, and so
everyone has to comply with them, whether they want to or not. On the other hand,
traditional values are not seen as universal. For example, laws apply only within a particular

jurisdiction, family rules only within the family are authoritative, game rules only apply to
those playing the game, and so on.
There are three types of ethical issues which are systematic, corporate and individual.
Corporate issues in business ethics are ethical questions raised about a particular
organization. These include questions about the morality of the activities, policies, practices,
or organizational structure of an individual company taken as a whole. In corporate ethical
issue, Enron’s management did not give their staffs an early notice about the termination of
employees and the staffs were told to pack their things in thirty minutes only. When the
pipeline cracked in San Juan, Puerto Rico, Mr Blue reported it to the management and the
management’s response was “no bad news” and ignores it. Mr Blue was then transferred to
the other side of the world. After a year of the report by Mr Blue, the pipeline crack and
caused a gas explosion. Eighty people were injured and thirty-three were killed. This shows
that the corporation was irresponsible and caused an accident. This situation can be avoided if
they took an early action to fix the pipeline. Individual issues in business ethics are ethical
questions raised about a particular individual or particular individuals within a company and
their behaviours and decisions. These include questions about the morality of the actions,
character or decisions of an individual. In individual ethical issue, Enron’s Chief Executive
Officer, Jeffrey Skilling cashed out over seventy million dollars while other loses their
savings, career and their homes. This shows how greedy and hypocrite the CEO are and he
did not even care about his employees. The board of director of the company also did not care
about what the management did as long as the stock price kept going up, they are very
greedy.
Arguments supporting business ethics for Enron are firstly, business cannot survive
without ethics. Secondly, ethics is consistent with profit seeking. Thirdly, customers,
employees and people in general care about ethics. So Enron should meet the terms of
business ethics in order for their business to stay permanent and successful.
Based on Chapter two of Management Ethics “Ethical Principles in Business”,
utilitarianism is an action and policies that should be evaluated on the basis of the benefits
and costs they will impose on society or in other word what is morally wrong is right. Based
on the movie, Enron Chief Financial Officer hides the company’s debt in order to not expose
the bad deals of management and to not lower their stock price. If the utilitarian theory states
that the right action for a particular occasion is the one that produces more utility than any

other possible action, it does not mean that the right action is the one that produces the most
utility for the individual performing the action. Rather, if an action creates the most
usefulness for all persons affected by the action, including of course, the individual who
carried out the action, an action is correct. In the movie, as the Enron ship goes down, Cruver
is seen trying to shred documents that will save one of his customers from financial disaster.
He has a moral obligation, according to utilitarianism, to do so. Even, for what he did, Cruver
has moral rights. Moral rights offer a justification to justify one's conduct and to evoke others'
protection or support. If he has a moral right to do something, so there is a moral reason for
him to do it. In addition, if he has a right to do something, then others have no excuse to
compete with him. Sherron Watkins, the whistle-blower who is a former American Vice
President of Corporate Development at Enron Corporation actions to reveal the dark side of
the corporation was also an act of utilitarianism.
Economic equality refers to equality of income and wealth and equality of
opportunity. There is also no economic equality between the upper and lower employees in
Enron Company. The rich one will be richer; the poor one will be poorer. A retributive justice
concerns the right to blame or punishes people for misconduct. In the movie, Andrew Fastow,
the Chief Financial Officer was pleaded guilty to fraud and conspiracy and testified against
his former bosses, served six years in prison.
Based on Chapter three of Management Ethics “The Business System:
Government, Markets, and International Trade”, USA is a mixed economy. The mixed
economy is an economy that maintains a system of market and private property, but relies
heavily on government policy to fix its shortcomings. By drawing money from the rich in the
form of income taxes and distributing it to the poor in the form of welfare payments or social
programmes, government allocations of private income are used to get rid of the worst
aspects of inequality. In order to protect workers from discrimination, minimum wage laws,
union laws, safety laws, and other types of labour legislation are used. Monopolies are
banned, nationalised, or regulated. The monetary and fiscal policies of the government aim to
ensure full jobs. To ensure they do not indulge in socially destructive behaviour, government
regulatory agencies police businesses. The scandal in the movie threatens to damage
confidence in the U.S. and overseas financial markets. As politicians indulge in constant
debate and allegations, quarrelling about the power of money in politics, the consequence of
Enron is now being felt at the highest levels of government. The Department of Justice
launched a criminal investigation and formed a national task force in New York, Houston,

San Francisco, and several other cities consisting of federal prosecutors to investigate the
existence of fraud in the company's dealings. Due to political, economic or family
connections, Attorney General John Ashcroft, as well as his entire Houston office, excluded
themselves from the investigation.
Based on Chapter four of Management Ethics “Ethics in the Marketplace”,
Enron’s models of market competition is oligopoly. Oligopoly is a market shared by a
relatively small number of large firms that together can exercise some influence on prices.
Furthermore, major industrial markets are dominated by only a few firms. The "imperfectly
competitive" oligopolistic economies are because they sit between the two extremes of
perfectly competitive and monopoly markets. In the movie, after the fall of Enron California
are dealing with almost 40 billion dollars and inflated energy costs as well as a disclosure of
internal Enron memos on manipulating the market. Not only were the lights are out, schools
were closed, hospital services were cut, and day-care facilities shut down. Life after Enron
was difficult for many.