The best way to explain the ethical meltdown at Enron is by providing a summary of the business culture at the organization. The main business operations of the company involved acting as an intermediary amid suppliers and customers. Strategies employed by the organization were fulfilling because they enabled it to make significant profit. However, the main predicament emerged through unusual accounting processes, considering the firm lacked a transparency in its accounting operations (Ololube, 2016). Manipulated reported assets, in addition to profitability that attracted a high level of concern, contributed the lack of clarity in the business culture. Nonetheless, Enron demonstrated all basic elements that are required under an ethical as well as compliance program in the business sector.
The unreliable explanations provided by the company’s officials affected the organizational culture because it jeopardized the roles of employees to determine their ethical behavior. A significant ethical culture dictates that the workers feel the sense of responsibility as well as accountability through their performances in addition to the actions of others (Rosiek & Leksowski, 2016). The employees were supposed to feel free to raise any problems along with concerns without the apprehension of retaliation from their colleagues or superiors.
The managers had a greater task that involved modeling the behavior demanded from others. Another relevant role of the managers that was absent at the firm incorporated effective communication about the value of integrity in situations that required making tough decisions. The business lacked a healthy culture because the workers did not feel the sense of responsibility as well as accountability for their actions, in addition to the actions of others (Ololube, 2016). Regardless of the poor company culture practiced at Enron, it had morals, a reporting system, monetary matters, in addition to training video for proper organizational visions along with values.
The outcome of the event is an indication that the ethical culture of the organization was a big shame. The establishment as well as its employees were responsible for the negative image portrayed by the CEO since no personnel was willing to step up and do the right thing (Mai, 2015). Such cases are clear illustration of the major factors that contributed to overall meltdown in the company’s ethical practices that contributed to several other predicaments.
The cultural practices followed at Enron are a clear demonstration of irresponsibility by the organization and its administrators that caused major predicaments within the financial sector. The decision making process at the organization was also affected by the nature of organization culture practiced at Enron because none of its leaders was willing to oversee the processes to ensure the right thing was being done (Bußmann, 2014). The company’s suffering in the end was contributed by several decisions that had been made in the past in relation to the operations and culture practiced by workers as well as the management. The five most appropriate things that Enron should have considered include
Making certain that each financial statement remained up to date and are properly placed to easy accessibility during future analyses.
The company should have maintained a reliable system followed by each of its workers to avoid instances whereby employees contribute to the culture that contributed to its demise (Bußmann, 2014).
Provide each worker at the company with a significant scope to express themselves as well as any thoughts that would benefit the company. Through supporting such strategies, the company would have a variety of ideas to choose from for effective decision making (Bußmann, 2014).
The decisions made at the organization should have been communicated with various employees to make sure that they are reliable.
The administrators needed to show their employees respect to embrace loyalty within the workforce.