On October 21, 2001, one of the largest energy companies in the world
filed for Chapter 11 bankruptcy after restating their earnings report for the past
two calendar years. Enron, the energy conglomerate had to restate its earnings
because of severely inaccurate book keeping of nine billion dollars.
Clearly, the U.S economy had heroic success during the mid to late
90's. More specifically, the economy had grown because of the influx of the modern
technology, extremely low unemployment, and consumers spreading their wealth
into long-term investments via the stock market. Many of those investors enjoyed
rapid returns on investments; meanwhile Enron had been deceitfully taken their
investors money and lining their personal bank accounts and increasing personal
wealth to enormous heights. During this research, it was very clear that the
corporate CEO's and CFO's had in fact reported fictitious earning reports. This
paper will cover the following: (1) Unethical climate at Enron (2) Definition of Law,
its purpose, and the specific illegal activities of the Enron Corporation and
associates. Let us first delve into the meaning of ethics and look at what
expert in business ethics, Linda Trevino has to say about corporate ethics.
In her book, Managing Business Ethics, Linda K. Trevino discusses
the issue of ethics and her definition states, " It is the role of every CEO to ensure
sound ethical practices are enforced from the top down. Ethics are behaviors and
guidelines for employee's actions. It is a moral guide for conducting and engaging in
day-to-day business. In a sense, it is doing what is right. The leaders must
demonstrate to all employees what ethics is all about in the business environment"
(p.189). This statement has lasting implications and is the foundation upon which
many businesses operate. However, in the aftermath of the recent...