Question

Enron: The Smartest Guys in the Room

Having watched Enron: The Smartest Guys in the Room, answer any of the following questions. Provide examples from the film.

What ethical issues does the film raise?

Who do you consider the most immoral person in the film? Why?

Who do you consider most responsible for the immoral and illegal activities of Enron? Why?

Do you admire anyone in the film for their moral character and/or courage? If so, who and why?

What might this film teach us about the ethics of being a professional? Explain.

Answer 1

What ethical issues does the film raise?

Ans:

There was a vast number of ethical issues raised in the movie “Enron-the Smartest Guys in the Room” but the three I am going to focus on are listed below. Art Anderson (accounting firm), Kenneth Lay (founder) and all of the other executives did a number of unethical things which ultimately brought down Enron and affected thousands of employees and their futures. The bottom line was that each and every one of them acted out of greed for the almighty dollar.

1. Encouraging employees to invest and buy stock in Enron when they knew the truth about the lack of value in the stock.
   
   As an employee you trust in your management to make the best choices both for you and for the business to succeed. Ken Lay and other executives strongly encouraged Enron employees to invest.

1. One Merrill Lynch analyst began to question the numbers and profits that were being produced by Enron and eventually he was fired. Enron invested a lot of money with Merrill Lynch and they didn’t want Enron to stop investing so Merrill Lynch got rid of the employee who question Enron, when in reality they should have listened to him. Merrill Lynch’s decision not to listen to him showed other employees that they better keep quiet with their opinions or their jobs would be on the line. If they listened to him they might have lost the deal with Enron, but in the end they lost it anyway and lost millions along with it. Merrill Lynch’s main focus should have been their employees and their investors, not solely Enron. They should have stuck to their code of conduct and followed their values.

1. Manipulated    earnings.
   
   Enron executives and accountants cooked the books and lied about the financial state of the company. They manipulated the earnings and booked revenue that never came in (Mark to Market accounting). This was encouraged by Ken Lay (founder) as long as the company was making money. Once word got out that they were disclosing this information, their stock plummeted from $90 to $0.26 causing the corporation to file for bankruptcy.
   
   This deception on behalf of the executives and others in the organization who hid this vastly affected anyone who had stock in Enron as well as stock in other energy corporations.