A Business Report on Unethical Behavior
By: Tristan Koepsel
Introduction
In class we have been studying unethical and ethical business and the impact it has on the
business, its employees, stockholders, and everyday people.
Ethics in Business
Business ethics are moral principles that guide the way a business behaves. A business that
performs good business ethics usual has success and also attract people and employees. But
businesses that practice unethical business usual don’t have success or have success at first
but eventually go bankrupt or out of business. Business ethics are viewed differently by different
people. This is why some people think they have good business ethics but in other peoples
eyes it is actually unethical. Some businesses even have their own code of ethics which is a
code issued by a business in a particular kind of policy statement. Employees must follow this
code so they can please their boss but most importantly be ethical.
Enron
Recently I viewed a movie called The Smartest Guys in the Room by Jigsaw Productions. Here
are some highlights. Enron was an energy company in Houston, Texas. They were involved in
the oil industry and were a public corporation. Since they are a public corporation they sell
stocks. Enron was part of the biggest corporate scandal ever. At first they were being ethical
and making the right business choices. They realized that they could do a thing call mark to
market accounting were they report their projected income. They did it unethical because they
reported absurd numbers that were not realistic. They were not socially responsible because
instead of having a positive impact on corporate america they just wanted to maximize profits.
The man responsible for the mark to market accounting was Enron’s president Jeff Skilling. He
was a Harvard graduate and was full of ideas. Andy Fastow the CFO and Ken Lay the CEO are
also responsible for fraud. Fraud is when someone does something criminal intended for
financial or personal gain. But the reason Enron got caught was because of the whistleblower
Sharon Watkins, she was the one ethical person at Enron. Another player was the accounting
firm Arthur Anderson which was Enron’s accounting firm. After the scandal they closed their
doors. Some effects of the Enron scandal were that Cliff Baxter couldn’t live with himself so he
committed suicide. Also over 20,000 employees lost their jobs. They main reason the company
collapsed is because the top dogs were doing unethical things and the employee never asked
why some things were happening that seemed wrong.
Reasons for Unethical Behavior
In class we read an article called Common Reasons for Unethical Behavior. It showed why
people behave unethically. Such as pressure, this is when people feel like the must do
something or are almost forced into doing something that is unethical. Another reason is
because some people don’t know what the right thing to do is. Others are weak in the moment
so they just go along with it. Misguided loyalty is also a reason people are unethical because
they think they are being loyal by lying which can result in horrible things such injuries or death.
Lastly, there are people who have just never learned or don’t care what an ethical value is.
These people just think what is in it for them and if they can get away with it.
Making Ethical Decisions
To make an ethical decision you must know right from wrong. Also you must understand that it
has to benefit others and not just yourself. Ethical decisions can be hard to make because
sometimes they are complicated and can not always be beneficial to you. But if you run a
business you must do what is right for corporate america. The proper choice might not always
be obvious but if you make the wrong choice and can really cost you and your business. Not to
mention your employees and other people involved with your business.
Who’s Responsible
The main people responsible for Enron’s bankruptcy and collapse are the top guys like Ken Lay,
Jeff Skilling, and Andy Fastow. Also Arthur Anderson for allowing this to happen by being their
accounting firm. The employees should also be at fault because they should have suspected
that something was going on and tried to have stopped what was going on. Thankfully Sharon
Watkins was their and found out what was going on.
Impact on Corporate America
Due to Enron’s collapse many innocent people lost their jobs. The price of electricity and natural
gas went up. Also the accounting firm of Arthur Anderson went out of business, even though
they were in on it. It took shareholders money out of their pockets because Enron’s stock fell
drastically. Also many banks lost millions of dollars due to their relationships with Enron such as
Citigroup and J.P Morgan Chase. It also caused building of power plants to be postponed. At
the end of it all Enron’s unethical decisions affected almost everyone, even if it was just a little
bit.
Conclusion
In conclusion, making unethical decisions can be very harmful to many people, business,and
just about a whole country as we saw with Enron. It is important to know right from wrong and
make ethical business decisions because in the end those will benefit you the most.