Chapter 5, Problem 1SGB

Summary Introduction

To determine:

A case related to violating business ethics or potentially breaking the law regarding business practises and to determine the following −

1. The source or underlying cause of the unethical behaviour
2. The hoped-for outcome
3. It was an individual or group involved
4. The accused was repentant or defensive
5. The ways to prevent such unethical behaviour in you organization you choose as a manager
6. The ways to fix this kind of problem after it occurred in you organization you choose as a manager

Introduction:

Here, we need to discuss a case related to violating business ethics or potentially breaking the law regarding business practises. The case that will be discussed here is − Enron Corporation. The company has a count of cases like money laundering, bank fraud, insider trading and conspiracy etc.

The Securities and Exchange Commission (SEC) investigated the accounting practises of Enron. The investigation was done because of the concerns of the analysts and shareholders that continued for several years. The disclosures of the company and write-downs reduced company's credit ratings and less investor interests leading to bankruptcy of the company.

The people behind this was CEO − Kenneth Lay and CFO − Jaffrey Skilling. Later on, they were sentenced imprisonment.