Organizational Ethics Issue Resolution

Organizational Ethics Issue Resolution

Organizational Ethic Issue Resolution

An organization that lacks a true culture of ethical compliance can create problems with integrity issues with stakeholders and customers. When a major company such as Enron, was structured their approach to ethics on the surface appeared to oppose progressive innovation. The policies and ethics programs were set up to protect the company and its shareholders. According to author Berenbeim, The Enron company had a detailed code of ethics it was not enough the organization needed to incorporate ethics and integrity throughout their corporate culture. Enron had to focus on business ethics issues raised by the conduct of the company’s directors, officers, accounts and lawyers (Berenbeim, 2002).

Issue Clarification

The overall view clarification of the issue illustrates the evolution of Enron’s innovations and fraud. The business records of the company financial economists and accountant’s uncovered considerable number information and incentive issues. The issues both complicate and potentially resolve the appraised valuation questions such as; earnings growth, stock splits, dividend changes, free cash flow limitations, share price-based compensation and hedging of market risks. The Enron Company contributed large sums of money to non-profit organizations for the purpose of acting on probable ethical issues before they become legal dilemmas. The company failed to inform its consumers of the business decisions made even though they had knowledge that the person at the other end of the business deal did not. The Enron Company filed a Chapter 11 to seek bankruptcy protection. The uncertainty of the company’s standings impacted the market’s confidence in Enron and its trading operations. Enron CEO Kenneth L. Lay, “stated steps would be taken to help preserve capital and stabilize businesses, also restore confidence of the trading counter parties, and enhance the company’s ability to pay creditors.” The Enron Company had made no effort to secure there financial debts the statement of the CEO was just a scheme. According to author Berenbeim many organizations make their money through patents and the use of expertise that are not universally available which give companies a competitive advantage. There are some markets failures that have an undesirable effect to the rights of others and cause danger to the credibility of all legitimate transactions. The Enron board waived the its own ethics code requirements to allow the company’s CEO’s to serve as general partners for the partnerships that it was using as a conveyor of secret information for much business transactions( Berenbeim, 2002).

Stakeholders Analysis

Through the stakeholder analysis of Enron the employees were directly impacted by the shut down of most of the companies leaving thousands unemployed and many more holding worthless stock. The customers and others stakeholders were impacted, by the trustworthiness company it has been broken due to the lack of communication and integrity issue not upholding the ethical standards of the company. The stakeholders were given a sense of false hope by the CEO of the Enron Company. Stakeholders build powerful relationship based on trust. All trust was lost when the company claimed all debts would be repaid and everything would be put in good standing even though a Chapter 11 had been filed. The company claimed there are circumstances where unfairness of the situation exceeds simple competitive advantage and is a threat to the rights of others and to the effective operation of the free market as a whole. The stakeholders were of no essential value to this company.

Values Identification

According to Ernon’s ethic code, the values for Enron were set on four basic principles respect, integrity, communication and excellence. The respect principle was to treat others with a high level of esteem, not tolerating abusive or disrespectful treatment. The integrity principle was to work with customers and prospects openly, honestly and sincerely. The communication principle was to have an obligation to communicate take the time to talk with one another and to listen. The excellence principle is the last one Enron set out to produce nothing less than there very best in everything they do. The values constantly interchanged between people of high importance to the people of least importance, worth, importance, or usefulness was not questioned because of the positive views of progression within the company through performance and prospects (Ethics code 2002).

Issue Resolution

The organizational