Enron

Enron's Business Ethics question its integrity

Lessons from Enron: Are ethics part of your business plan?

Do you recycle all of your bottles and cans? You know you should. Do you cheat on your taxes--inflate those entertainment expenses just a tad? You know you shouldn't. Do you know someone who you think may be breaking some law, but you're not sure, and you really don't want to find out? These are little questions that add up to a big question: How ethical are you? We talk about the importance of integrity all the time(and that's a good thing), but how do we really define it? More important: Do we walk the walk as well as we talk the talk.

I am not about to cast a stone here. I'm going to recommend you to see a movie. It's the documentary, "Enron: The Smartest Guys in the Room". It's out on DVD and I noticed it's on my cable pay-per-view too. I'm telling you, it is really mind boggling. It has a great deal to say about ethics, and about the difference between what's wrong and what's illegal. It makes you contemplate what any one person could do if they suspect wrongdoing, but actually finding out it's true or doing anything about it could destroy them personally and professionally.

Most of us know the difference between right and wrong when two choices are before us, but this documentary shows how much more complicated the situation at Enron was before it all fell apart. I know it made me think for weeks about what the people who worked there didn't see (or didn't know), about the deception that was going on. Ken Lay claims he had no idea, and who knows, he may be telling the truth. Who wants to think the company they run is a house of cards? How much do we kid ourselves day to day?

I'd love to hear from any of you who have already seen it, and if not, make time for it and let me know what you think.

By the way, search for "ethics" using Yahoo, and you will find it can be purchased for $8.69 at overstock.com.... I found that humorous enough to share (I'm guessing it's the title of a book). You can look it up, you can read about it, you can take a seminar on it. In our culture, people would like to purchase it. But can you live it? Is it part of your life plan? Is there mention of it in your business plan? Is it covered in the employee handbook? Watch this documentary, and I bet you'll agree maybe it should be.

"ethics and morals"

There are many views of ethics and morals, and most people who use that phrase mean something quite different from what is meant by philosophers. Many people who use this phrase are hostile to academic ethics and the arguments used by academic ethicists. They seek to make an ethical decision but without justifying it in the ways that would be demanded by academic ethics. Accordingly it is wrong to simply "redirect" the popular phrase "ethics and morals" to academic ethics, its users may:

* be applying an instinctive idea of goodness and value theory they learned in their family or which they think mirrors an ethical relationship of theirs

* simply believe some socially transmitted truth.

* simply be using the phrase to cut off debate, as if to say there is some way to achieve direct knowledge of what decision "is ethical"

* simply believe that a certain decision is right or true because of a moral code or legal code - see section regarding 'What's universal?' below.

Avoiding Ethical Misconduct Disasters

Strategic planning for organizational "integrity" continuity is essential for avoiding, mitigating, and surviving organizational scandals and (un)ethical disasters.

Robert C. Chandler, PhD

Ethical misconduct disasters constitute serious costly risks to the continuity and survival of a business. Regular headlines reveal that breakdowns of integrity collectively cost businesses billions of dollars in litigation, fraudulent financial acts, increased costs, fines, reputation and image damage, customer/client trust, lost sales and recovery costs, and potentially land senior management in prison. No company is immune from these threats. Prudent businesses must plan to manage integrity continuity by assessing their vulnerability to ethical disasters, taking proactive measures, and preparing their organizations to mitigate and survive when such scandals break.

Strategic Integrity Continuity

Most organizations have long acknowledged that business continuity planning is an essential priority for effectively anticipating, preventing, mitigating, and surviving natural disasters, data loss, accidents, and deliberate malevolent acts. What many are only now discovering is that integrity continuity planning is also due diligence. Ethical issues must be on the strategic agenda. Such planning must go beyond compliance issues and reactive disciplinary policies to actually manage integrity.

Integrity management should be a priority not only because it is legally required, but because it is the right thing to do.[1] Employees who know that particular workplace decisions, behaviors, and processes exist in an ethically judged context are more aware and motivated to act ethically. Employees who perceive such activities as existing detached from an ethical context or who utilize an alternative (unethical) value paradigm (i.e. financial or perceived performance) are less aware of ethical implications and more motivated to act unethically.

Integrity management is intertwined with managing the larger corporate culture and with the informal reward/motivation processes that impact employee decisions and behaviors in ways that transcend policies printed in a written code of conduct. Common ethical and professional standards include assumptions that decisions and behaviors are conducted honestly and that employees and managers never knowingly harm or do damage to fellow employees, stakeholders, customers, clients, or vendors by deception, misrepresentation, fraudulent report, coercion, conflict of interest, or other acrimonious acts.

Recognizing the Risk for Integrity Lapses

Too frequently, top corporate executives think that ethical scandals "couldn't happen to us." Those sentiments are intrinsically related to the aftermath statement, "I never thought this would happen to us." The reality is that all of the common justifications

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