Enron and its Shortcomings Essay -- essays research papers

Enrons overall credit line practices are non ethical. One business practice of Enron that I cerebrate poses an ethical issue is their attitude towards its employees. They create a highly warring and a result oriented business atmosphere. They used a schema where they would rank employees every half a year and fire employees who be on the bottom 1/5 of the scores. This kind of attitude where scarce results liaison and if you dont produce anything levelheaded you will pay fired will scarce hurt the company. This promotes unethical behavior and getting what needs to be make to get good results no matter what and if you do well you will receive big bonuses. This approach towards Enrons employees did not pretend very good utilitarian reasoning. This doesnt service of process employees morale and psychological satisfaction. The cost of this kind of approach was very minuscule because in fact you will weed out the slackers but the results Enron had where employees xenophobi c to question unethical situations in Enron in fear of their jobs.Another fraction of Enrons business practice that is definitely not ethical is their account statement methods. In a technical aspect their accounting methods were fine, but this was only because of a loophole. Andrew S. Fastow was described as a financial whiz peasant because of these loopholes that he knew how to take emolument of. Some of these things that he, and Enron, were able to take advantage of were the setups of special purpose entities. They would setup these special purpose entities and have every their fri dyings or employees to invest in these special purpose entities so that Enron my ordain that their debts and liabilities are actually under the special purpose entities and not of Enron. This make it air like Enron didnt have as much debt as it should have had. A second practice in the accounting methods that were not ethical was their manipulation of their revenue. What they did was to make eith er their earnings more or inflating their stock. They would make sure that any potential deals that could make money in the future they wrote down in the books in the present, which is not a good accounting practice. Also they used sham swaps with other companies that would buy products and work with each other to make it look like they where making gross sales and money, when in fact that all they did was trade some assets and wrote a sale.... ...d of the day. Enrons legal state was low while their economic responsibility was comparatively high. They wanted to make money but they where doing it the illegal way, and because of this their social responsibility was just terrible. In the end of the company no matter what was done all the illegal actions were catching up to them and this showed to the world how irresponsible Enron was. They were not socially responsible to any of their stakeholder. The stocks fell and their company went into bankruptcy, many quite a little lost mon ey. Employees lost their jobs and life earnings, and because Enron was a huge company the end of Enron had a ripple affect. All other companies that worked with Enron lost business and they big businessman have had to cut back on costs. Customers lost because they didnt have the services of Enron, a company that deals with electricity, water, broadband, pulp, paper, and lumber. Creditors had to write off loads of braggart(a) debt because Enron would not be able to pay it back. Companies should take a look at Enrons approach to business and learn that you need to responsibly balance all three responsibilities of business to have a victorious business in todays world.