A Review of The Enron Code of Ethics

Introduction

The Enron code of ethics was well detailed, and all the provisions of the code of ethics were in line with the policies of the company. According to Sims and Brinkmann (2003), Enron policies together with the code of ethics fostered the company reputation of being fair and honest. The company tried to safeguard the interests of its customers by ensuring that it provides the best more than their competitors. The code of ethics specified that all the company employees should not conduct themselves in any manner that would jeopardize the best interest of the company. Moreover, the employees were not supposed to engage in any business that would suggest competition with the Enron. Through the above policies, the company gave room for failure instead of bringing in a perceived success. The policies indirectly forced the top executives as well as the junior employees to engage in unethical behaviors that later made the company failed ethically and subsequently financially.

Given that Enron’s code of ethics was inclined towards the good ethical conduct of all its cooperate employees, it failed and was declared bankrupt in 2001 (Fusaro and Miller, 2002). The failure of the Enron can be attributed to the failure of the executive and the unethical behavior within the company. The working conditions were and condescension where competition and financial goals were over emphasized. The profit orientation of Enron compelled it to always emphasize on policies that would see the generation of the benefits by all means. The employees were subjected to a rating system whereby 20 percent of the employees were supposed to be rated below the minimum requirements and fired (Marianne, 2009). Enron applied the rating system with a hope of encouraging the employees to work extra harder and avoid low ratings, but the system harmed Enron contrary to the expectations of the management.

The continuous evaluation of the employees for performance together with the culture of competition lead to deception. The strict evaluation process compelled the employees to engage in cheating on their work. They were always nervous and feared to lose their jobs due to underperformance. Thus, they resorted to unethical means of surviving for a longer period within the company, for instance, they cheated about their progress even if they knew that things were not all that good. None of the employees felt the shame of cheating since it was becoming a culture. Those who stood by what was right was regarded odd by the cheating employees.

Besides cheating, the employees covered errors and could not report errors of their colleges since each of them was entangled in his or her line of duty and focused only their achievements in the places of work. According to Katzenbach (2015), employees in a company help each other by asking and answering questions. However, the competitive environment in the Enron compelled the employees to avoid asking questions since they considered it humiliating. Moreover, they did not like helping each to avoid competition and avoided mentioning their doubts and seeking for clarifications.

Moreover, Enron ensured that all its employees did not engage with outside parties that could out-compete Enron in the market. Thus, the employees were not allowed to express any doubts about the financial status and the plans of the company. Olson, a company analyst, lost his job because Olson advised his client not to invest in the company due to the unpredictable status of the business (Marianne, 2009).

Conclusion

Conclusively, the evil culture in the Enron company that was created by selfish company executives led to the fall of Enron. Both the officials and the employees engaged in unethical practices and they ended up contributing to the downfall of the Company.