The Ethical Dilemma Of Enron Essay - 1404 Words

Enron was formed in 1985 following the merger of Houston Natural Gas Co. and InterNorth Co. The Chairman Kenneth Lay, CEO Jeffrey Skilling, and CFO Andrew Fastow were the backbone of Enron during its growth period. These executives exercised their power and expertise to unethically â€Å"increase† Enron’s profits by hiding the company’s debt. The ethical dilemma that Kenneth Lay and Jeffrey Skilling faced was whether to let their stakeholders know how poorly the company was doing, or to hide the debt. They chose to cut corners and falsify information that would later come back to get them in trouble. Enron had millions of stakeholders that believed and had trust in the company. According to USA TODAY, in 2000 Enron had around 21,000 employees and 754.3 million shares outstanding at its peak price of $83 per share. The company made most of their profits by transporting their gas product to utility companies through pipelines at fair market value. Enron also provid ed electricity to the Northwestern side of the United States and communications for its wholesale and retail customers globally. The textbook states that â€Å"From 1998 to 2000 alone, Enron’s revenues grew from about $31 billion to more than $100 billion†¦Ã¢â‚¬  Enron had declared a â€Å"net income of $979 million† in 2000, but a bankruptcy examiner reported that Enron had â€Å"really earned just $42 million.† That examiner also found that even though Enron had claimed $3 billion in cash flow from that year, â€Å"the company actually had aShow MoreRelatedEnron - Ethical Dilemma Essay1129 Words   |  5 PagesEthical decision making: A dilemma Ethical issues have greatly transformed in our lives since the great Enron, Xerox and other huge corporations proposed big profits showing earnings of billions of dollars and yet in reality facing bankruptcy. These corporations faced great trouble with the federals and state for manipulating financial statements. But not only corporations can be blamed on this, accounting firms were involved in this as much as the corporations were. With the business standRead MoreManagerial Ethics: Enron Case Study1392 Words   |  6 PagesIntroduction The book The Smartest Guys in the Room describes the Enron fraud case. Enron, the Houston-based energy trading company committed systematic fraud over the course of several years before finally being subject to investigation. Ultimately, the company was shut down and the principals were prosecuted. There is, in essence, no real ethical dilemma in the Enron case. A true ethical dilemma would have a dilemma component, whereas Enron was outright criminal behavior from the outset. NeverthelessRead MoreEnrons Business Ethics Failure1485 Words   |  6 PagesContent 1. Overview ............................................................................................3 2. The Fall of Enron ...............................................................................4 3. 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