Question

How did Enron’s corporate culture promote unethical decisions and actions?

Answer 1

Decision-making is a vital part of a manager's role. It includes selecting a course of action from series of alternative choices under conditions of uncertainty. To be an effective manager one must have leadership knowledge and effective decision making skills. At the same time, ethics is essential and is crucial to have in a leader or manager. Ethics is a system of rules and guidelines that must be followed in decision making, our morals and values help influence our choices when put in complex or critical circumstances.

Enron’s corporate culture promoted unethical decisions and actions by implementing aggressive management style, aggressive earnings management and ignorant employees. The corporate culture that is formed by Lay and Skilling is a very aggressive goal orientated and performance driven environment. Not only does employees are expected to perform, they were also expected to not ask questions. The aggressive management style occurs from the implementation of the strict, meticulous and threatening performance evaluation. The management emphasized heavily on results, and the performances of the employees are constantly under the evaluation of their peers. Any underperforming employees would besacked and replaced.

Unethical behavior and actions is widely seen throughout the company as it was a norm to hide financial losses so that they need not own up to the responsibilities. Lastly, ignorant employees also resulted in the unethical behavior. This is how the corporate culture shaped by Lay and Skilling led to the unethical behavior and action of its employees.