This paper will focus on the business ethics issues at Enron that were raised from the documentation Enron: The Smartest Guys in the Room, from cognitive moral development to group norms, etc. I personally think going against the laws is unacceptable in any circumstances, especially with those figurehead executives because they were the ones who set up such a bad culture for their organization. spaced), Paper type: Essay , However, in this case they did not even represent the shareholders well and particularly not the employees who were shareholders. It suggested that they have high internal locus of control, which meant they absolutely have the ability to control their own life. Corporate Facts and History No problem! The movie is about a crime story and the bankruptcy of ENRON, one of the most successful and even considered as the 7th largest corporation in America, due to the fraudulent acts by the top management. All those behaviors suggest that Skilling is one of those “bad apples” who knows how to be a leader but has low moral person. Lecturer: DR SITI ZELEHA ABDUL RASHID Enron is also one of the most celebrated business ethics cases in the century. To read the essay’s introduction, body and conclusion, scroll down. p.153.ISBN1-59184-008-2 22 McCoy, Ke vin (2005-12-28). Mike Towle Want to get a price estimate for your Essay? What ethical issues does the film raise? ... We will write a custom Essay on Enron: The Smartest Guys in the Room specifically for you! Using ENRON: The Smartest Guys in the Room As a Live Case Illustration of Financial Concepts and Ethical Issues Patty Hatfield and Aaron Buchko Bradley University The academy award nominated documentary, ENRON: The Smartest Guys In the Room can be used as an innovative teaching tool in corporate fìnance and business ethics. T he title of Alex Gibney's Enron: The Smartest Guys in the Room is ironic. They should have stuck to their code of conduct and followed their values. Enron! They consider themselves representatives of the shareholders only, and not of the employees. TOWLE 2 Multiple ethical selves can explain best Ken Lay role in the Enron case. Moral muteness refers to the failure to forthright one’s moral concerns regarding issues about which one possesses moral convictions. ENRON ETHICS AND LAW ESSAY. Instead, Ken Lay even said openly at a board meeting that the two traders “made too much money to let them go”. it took Enron 16 years to go from about $10 billion of assets to $65 billion of assets, and 24 days to go bankruptcy. The authors and the movie deserve all the credit they are receiving. the smartest guys in the room. Enron: The Smartest Guys in the Room is a 2006 documentary based on the identically named bestselling book written by Fortune Magazine reporters Bethany McLean and Peter Elkind. Conclusion The Enron scandal is the most significant corporate collapse in the United States in the century. Organizational norms were the most important informal system at Enron that led to the company failure. In this video we take a look at the Enron story. However, Enron: The Smartest Guys in the Room is a human story in the best sense. Skilling unexpectedly resigned on August 14 of that year, citing personal reasons, and he soon sold large blocks of his shares in the corporation. Being said that, the corporation owes all stakeholders the obligations to meet their interests. This paper will focus on the business ethics issues at Enron that were raised from the documentation Enron: The Smartest Guys in the Room, from cognitive moral development to group norms, etc. The movie is about a crime story and the bankruptcy of ENRON, one of the most successful and even considered as the 7th largest corporation in America, due to the fraudulent acts by the top management. Practices such as mark-to-market accounting, complicated financial statements and special purpose… Organizations or companies, which operate in the corporate realm, are bound and regulated by corporate ethics and values. There are many accounting scandals that have occurred throughout United States That’s in human nature. However, discarding those “bad apples” generally won’t solve Enron’s problem with unethical behaviors. One of the largest ethical and legal business cases in a very long time has involved Enron. The fact that those ken lay, Jeff Skilling, Andrew Fastow, and other leaders decided to cross the legal line to cover up the company failures and to deceive investors lowered their stand in CMD even though they were actually considered extremely smart and successful businessmen. Situational Factors Arguments above suggest that at the individual level, there are so many “bad apples” at Enron that caused the organization’s collapse. The mordant documentary Enron: The Smartest Guys in the Room cleverly deconstructs the men who reminded us of the dark side of the American dream. Even Watkins, the whistleblower, described Lay as a man of integrity. Category. (2019, Dec 07). People did acknowledge wrong-doings within the organization; however, little or no action was taken to change the situation as well as to set the disciplines for future reference. The action obviously made Enron financial data look good, but at the same time deceived the company’s investors about the real performance. Enron: The Smartest Guys in the Room is a 2005 American documentary film based on the best-selling 2003 book of the same name by Fortune reporters Bethany McLean and Peter Elkind, a study of one of the largest business scandals in American history. With Kenneth Lay, Peter Coyote, John Beard, Barbara Boxer. The board did not pay attention to the employees because most directors in the United States do not consider that their responsibility. Pushpak Mundhada 30 th March, 2020 Enron: The Smartest Guys in the Room Enron, once ranked as the 7 th largest company on the fortune 500 and ranked as the 6 th largest energy company in the world, on December 2 nd, 2001, filed for bankruptcy in the United States. 301 certified writers online 2 Literature review ………………………………………………………………, Introduction Again, to understand the Scandal better I’ll recommend you to read the book written on it, The Smartest Guys in the Room. It’s hard to score those executives on Locus of Control. Enron - The Smartest Guys in the Room ein Film von Alex Gibney mit Peter Coyote, Arnold Schwarzenegger. That brings in the ethical issue of conflicts of interest, one of key problems at Enron. We will write a custom Essay on Enron: The Smartest Guys in the Room specifically for you for only $16.05 $11/page. Once the world's most innovative company for six years running and boasting $100 billion in revenue during the year 2000, Enron appeared to be a corporation at the dawn of a new generation of firms built on innovation, technology, and an ambition to be the smartest guys in the room. That was right in the case of Jeff Skilling, who was always seen as the brains behind the transformation of Enron. The Smartest Guys in the Room: Management Lessons from Enron's Leaders On February 12, 2001, Skilling was named CEO of Enron, receiving $132 million in a single year. Art Anderson, Ken Lay 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. Enron: The Smartest Guys in the Room—Using the Enron Film to Examine Student Attitudes towards Business Ethics January 2009 Journal of Behavioral and Applied Management This scandal demonstrates the need for significant reforms in accounting and corporate governance in the United States, as well as for a close look at the ethical quality of the culture of business generally and of business corporations in the United States. This practice drove up their stock price to new levels, at which point the executives began to work on insider information and trade millions of dollars worth of Enron stocks. the film Enron: The Smartest Guys in the Room was not used. There is a general impression that Enron was a good corporation that went bad. They always strived for the best. With the leaders known to be wise and smart, the workers, Enron – Ethics and Law Essay 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. They filed the largest corporate bankruptcy in American history in 2001. Companies try their best to keep many of the accounting scandals quiet. Hi there, would you like to get such a paper? T he title of Alex Gibney's Enron: The Smartest Guys in the Room is ironic. If you need this or any other sample, we can send it to you via email. Sorry, but copying text is forbidden on this website. 1 Investors. If you have an ounce of compassion, Enron: The Smartest Guys in the Room will make you mad as hell. Comment: Alex Gibney, the producer of this documentary, fails to link the ENRON fiasco with its true root cause: Milton Friedman's obsessive fixation with deregulation. At Paperap.com you will find a wide variety of top-notch essay and term paper samples on any possible topics absolutely for free. That single image calls up multiple meanings: faith fronting business; terrible irony; a real need for salvation. No matter what your politics, "Enron: The Smartest Guys in the Room" will make you mad. How about make it original at only $13.9/page? No company wants to admit that there was a problem or that people within the company are not trust worthy. The violation of corporate ethics, studies reveal, is not only detrimental for the company, but also for the corporate system. 1) Who are the stakeholders affected in the Enron case, and why 2) what are the ethical issues involved in Enron any help would be much appreciated The Smartest Guys in the Room: Management Lessons from Enron's Leaders Enron as “The Smartest Guys in the Room”: Case Memo. Don't use plagiarized sources. ENRON ACCOUNTING FAILURE AND ETHICAL ISSUES With aggressive Jeff Skilling as the boss, such structure was manipulated at Enron. People do what’s rewarded and avoid what’s punished. He was the one who came up with the idea that the company didn’t really need any “assets. There was a vast number of ethical issues raised in the movie “Enron-the Smartest Guys in the Room” but the four I am going to focus on are listed below. 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. It'd become one of America's largest in just a decade with accolades like "America's most innovative company." McLean and Elkind are credited as writers of the film alongside the director, Alex Gibney. This paper will focus on the business ethics issues at Enron that were raised from the documentation Enron: The Smartest Guys in the Room, from cognitive moral development to group norms, etc. And that’s when the collapse begins. 550 This text is available online and is used for guidance and inspiration. )” –Petrarch. Strategy, Corporation. It tells the story of how Enron rose to become the seventh largest corporation in America with what was essentially a Ponzi scheme, and in its last days looted the retirement funds of its employees to buy a little more time. Sorry, but downloading is forbidden on this website. The Enron Jeffrey Skilling and Ken Lay knew was one they kept to themselves and a few chosen colleagues. An excellent book on Enron entitled “The Smartest Guys in the Room” is a great book to read, if you get a chance. Enron: The Smartest Guys in the Room should be viewed as a cautionary tale. Later on, Lay also complained that he never knew about the same activities among his employees. How about receiving a customized one? The rest of the world saw a global oil company on the cutting edge of its business and paving a path that other American firms could follow. Corporate Values, Workplace Decisions and Ethical Standards of Employees, Journal of Managerial Issues, 20(1), 68-87. This could be Enron 2.0. Art Anderson, Ken Lay 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 question really is whether or not you're going to take it … Enron is an example of corporations that have faced bankruptcy in the recent past because of the numerous problems it had with federal and state governments for manipulation of financial statements. Words. Note: Take notes during the film --- even in the dark! Ethical Issues in Business and Society Professor Franklin Bridge IDIS 302.004 Take Home Assignment – Enron: The Smartest Guys in the Room Instructions: Write a few sentences or more on each of the following questions. Provide 3 examples from the documentary that consist of 200 words or more of content. By 1992, Enron became the largest seller of natural gas in North America and began to offer other services like wholesaler trading and risk, of this decade ethical scandals erupted though corporate America. The movie starts with the story of Enron Corporation founder who was the chief executive officer of Houston Natural Gas, Kenneth Lay. They usually don’t have the tendency to challenge top management. Movies like “Enron: The Smartest Guys in the Room” are useful because they explain complicated issues in simple terms — a boon to us normal folks who are often frustrated by news coverage of ongoing stories that fails to take into account that we’re not all financiers or political scientists. On the other hands, Sherron Watkins, the whistleblower, chose the consequential and virtual ethics approaches to resolve her dilemma. The organizational structure of Enron was a calculated one with a clique that was thought as being the “smartest” guiding the rest of the workers. Once people were hired, it was an “up-or-out” culture. When two Enron energy traders in New York made massive fraudulent energy trades and drew off company money to their own accounts in mid -1980s, the company didn’t take the chance to set up a standard. All stakeholders have their own self-interests. The thing I liked most about this documentary was the fact that it focused on the guys at the top, the self-proclaimed "smartest men in the room", the so-called geniuses who knew the energy business so much better than the rest of the industry. Board of Directors Role. Formal System and Informal System At Enron, the culture of unethical behaviors was so strong that it led up to the company collapse. For a far deeper dive, check out the book "Enron: The Smartest Guys in the Room" by Fortune Magazine reporters Bethany McLean and Peter Elkind, or watch the fantastic documentary of the same name by director Alex Gibney. The paper will look into the issues that faced the company leading to its collapse. Want to add some juice to your work? Moral Manager/Moral Person Ethical Leadership Matrix I would describe Jeff Skilling as a hypocritical leader. There are many causes of the Enron collapse. Enron executives really believed in a winner-take-all society, as a result, they pushed their employees very hard to create productivity, with little or no concern about ethical issues. Inhaltsangabe: Dokumentation über die Pleite des Energiekonzerns Enron… Watch out! Hatfield, Patty, (2008) Using "The Corporation" as a powerful illustration of ethical issues facing the financial manager Take Andrew Fastow as an example, he might not start all the fraudulent financial activities in the first place; however, he decided to do so in order to please the boss, when Ken Lay wanted to see neat financial disclosures. This paper provides information on how the movie can be used … That was the reason why Andrew Fastow, the hot shot risk taker, was one of Lay’s favorites. 21 McLean, Bethany; Peter Elkind.The Smartest Guys in the Room. But a chain of events lead to an enormous shock on the Wall Street and went down in history as one of the biggest business scandals. That’ll help you to understand even the minutes of the Enron Case Study. Identify and describe three ethical issues from the documentary. of service. According to the Texas State Historical, Enron's Ethical Dilemma: Many scandals occur even without outsiders knowing anything that had occurred. In the documentary Enron: The Smartest Guys in the Room, Jeff Skilling, Ken Lay and other executives of Enron combined a series of unconventional and unethical business and accounting practices to inflate Enron’s worth and supposed revenues to an exaggerated amount throughout the 90’s.Practices such as mark-to-market accounting, complicated financial statements and special … Enron failed at this point to create a fair system that could encourage its people to act ethically. The ethical issues is generally Profit or Ethics; the ethical principles is commonly objectivity and integrity; common ethical theory is ethical egoism; person affected by decision is normally all of the members; and imaginative solutions that rewarding half of the income, 1. One of the most striking scenes in Bethany McLean and Peter Elkind’s Enron expose The Smartest Guys in the Room details the courtroom testimony of Kenneth Lay and Jeff Skilling during their criminal trial. Corporate fraud, greed, corruption, what company comes to mind when you hear those words? The company’s stakeholders include primary groups of customers, employees, shareholders, owners, suppliers, etc. While employees want secure jobs with high earnings; ustomers want quality products with cheap prices, which may eventually result in the company and employees’ low income. 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 be view the full answer view the full answer Once priced at $90 per shares the price was dropped to less than $1 by November 2001. Ethical and moral issues have received substantial focus in the modern society because of the recent cases in which huge corporations with big profits and earnings have faced bankruptcy. He was described as an aggressive gambler who valued risk taking and boosting the company’s stock price above all. I just finished watching Bethany McLean and Peter Elkind's's movie, ENRON: The Smartest Guys in the Room. Kenneth Lay established Enron in 1985. Louis Borget, Andrew Fastow, and Jeffery Skilling were the top management executives from 1985 … At the time, the Enron scandal was considered to be one of the most notorious and compelling business ethics cases in modern generations. Download for Free . All the content of this paper is just her opinion on Ethical Issues In Enron The Smartest Guys In The Room and can be used only as a possible source of ideas and arguments. Enron: The Smartest Guys in the Room takes a different approach to the documentary genre, as most documentaries are independent of a literary source or spawn one of their own. As a matter of fact, it took Enron 16 years to go from about $10 billion of assets to $65 billion of assets, and 24 days to go bankruptcy. I believe Enron’s later difficulties would have been avoided if the executive team had disciplined the whole organization in time. That’ll help you to understand even the minutes of the Enron Case Study. Directed by Alex Gibney, the film looks into the collapse of Enron Corporation that … Yet more than just an indictment of the Houston, Texas energy titan, Enron: The Smartest Guys in the Room ultimately contends that the Enron fiasco was not an isolated incident of atypical unscrupulous management. There was a vast number of ethical issues raised in the movie “Enron-the Smartest Guys in the Room” but the four I am going to focus on are listed below. The senior executives believed Enron had to be the best at everything it did and that they had to protect their reputations and their compensation as the most successful executives in the U. S. When some of their business and trading ventures began to perform poorly, they tried to cover up their own failures. In 1985, Enron was born. I'm not inclined to say this is the reason the film is not only entertaining and informative even to those who lack knowledge of business practices, but it probably does contribute to its effectiveness. October 17, 2014 Enron Corporation was truly all a lie based on scams and false information. Enron’s ride is quite a phenomenon: from a regional gas pipeline trader to the largest energy trader in the world, and then back down the hill into bankruptcy and disgrace. It was actually this desire that led to the company’s loss of ethical practices as anything had to be done in order to protect the organization’s hidden secrets. In its trail, investors were getting rich, employees found reward and satisfaction, and the community it called home thought it, The Enron Accounting Scandal of 2001 (2005). Enron: The smartest guys in the room … Debts and losses were put into entities formed “offshore” that were not included in the firm’s financial statements, and other sophisticated and hidden financial transactions between Enron and related companies were used to take unprofitable entities off the company’s books. You to understand even the minutes of the most notorious and compelling business ethics cases in the of. Were too confident about themselves only detrimental for the corporate realm, are bound and by... Of top-notch Essay and term paper samples on any possible topics absolutely for free organization by setting the tone the... 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