Business Ethics Case Study: The Fraud Case Of Enron

With respect to the Enron case, there were initially two red flags leading to the fraud that should have been noted and thoroughly reviewed: (1) Enron and other corporations previously pressed for deregulation of the energy industry, and (2) lack of monitoring the industry and corporation practices by the government after deregulation (Albrecht. Fraud Examination, p. 431). After the deregulation of the industry, many corporations were, more or less, free to do as they please, which provided the opportunity for fraudulent activity.
Furthermore, there were significant problems in this case that should have been heavily weighed prior to proceeding with Enron executives’ plans for growth. First, prior to moving forward with the gas bank, Enron executives should have thoroughly reviewed the fact that natural gas producers needed cash up front. Enron did not have the capital to provide any of its potential suppliers in order to proceed with the gas bank, but the executives chose to work around legal loopholes instead of dismissing the notion. This would lead to the second problem, management executives creating a number of …show more content…
Initially it was to serve as a means to evaluate employees based on the company’s values, such as: respect, integrity, communication and excellence. However, this system devolved into being a means of intimidating employees and pressuring them to maintain above par performance (Thomas. The Rise and Fall of Enron). For fear of receiving a poor rating and being terminated, Enron’s employees strived to maintain performance excellence. This review system significantly diminished Enron’s tone at the top and the key values that trickled down through all levels of employees were based solely on performance. This created an unwelcoming environment for all employees, performance was held to a higher standard than