We will write a custom Essay on Enron: The Smartest Guys in the Room specifically for you for only $16.05 $11/page. (2019, Dec 07). Enron filed for bankruptcy on December 2, 2001. The folllowing sample essay on Ethical Issues In Enron The Smartest Guys In The Room discusses it in detail, offering basic facts and pros and cons associated with it. If the Enron scandal continues to fascinate you, you’re not alone. 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. Even Watkins, the whistleblower, described Lay as a man of integrity. People in such culture aim to be among the best and the brightest; therefore, they tend to play the game the way their boss has set it up. There are so many things that went wrong within the organization, from all personal (prescriptive and psychological approaches), managerial (group norms, reward system, etc. 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. The authors and the movie deserve all the credit they are receiving. Its core business was buying energy at a negotiated price and later, selling the energy when prices increased. It suggested that they have high internal locus of control, which meant they absolutely have the ability to control their own life. As the scandal was revealed, Enron shares dropped from over $90 to less than $. 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. People do what’s rewarded and avoid what’s punished. Moral muteness refers to the failure to forthright one’s moral concerns regarding issues about which one possesses moral convictions. The Smartest Guys in the Room: Management Lessons from Enron's Leaders The movie entitled “ENRON: Smartest Guys in The Room is based on a book with the same title written by Bethany Mclean and Peter Elkind. McLean and Elkind are credited as writers of the film alongside the director, Alex Gibney. 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. 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. 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 If you need this or any other sample, we can send it to you via email. ENRON ACCOUNTING FAILURE AND ETHICAL ISSUES 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. 50. T he title of Alex Gibney's Enron: The Smartest Guys in the Room is ironic. To read the essay’s introduction, body and conclusion, scroll down. 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. 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 … Later on, Lay also complained that he never knew about the same activities among his employees. Louis Borget, Andrew Fastow, and Jeffery Skilling were the top management executives from 1985 … Enron: The Smartest Guys In The Room. Her morality won the situation; she decided to follow her ethical self. It’s hard to score those executives on Locus of Control. 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. 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. Everyday, there are political and business fraud happening, and most of it goes unnoticed. 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. (2005). No matter what your politics, "Enron: The Smartest Guys in the Room" will make you mad. Corporate Facts and History Investors. Organizations or companies, which operate in the corporate realm, are bound and regulated by corporate ethics and values. The movie entitled “ENRON: Smartest Guys in The Room is based on a book with the same title written by Bethany Mclean and Peter Elkind. 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. 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. Vincenzo DiMaggio 9/1/17 BUSN 2060 Enron; The Smartest Guys in the Room 1. 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. 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. 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. T he title of Alex Gibney's Enron: The Smartest Guys in the Room is ironic. If you found this story interesting then here … There is a general impression that Enron was a good corporation that went bad. On the other hands, Sherron Watkins, the whistleblower, chose the consequential and virtual ethics approaches to resolve her dilemma. He created and led Enron to the seventh largest company in the US. According to the Texas State Historical, Enron's Ethical Dilemma: With aggressive Jeff Skilling as the boss, such structure was manipulated at Enron. 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. Lay created such a vicious corporate culture that encourage going beyond limits to create big money. When one of the interview subjects states early in the documentary, "this is a human story," I quickly prepared myself for a stream of sob stories. A hypocritical leader talks persistently about integrity and ethical values but then engages in unethical conduct, encourages others to do so either explicitly or implicitly. Business. The question really is whether or not you're going to take it … Many investors may make their investing decisions based on those false data. However, at the same time, decision to go against the laws meant those leaders were gambling with their business, which is a high external locus of control behavior. That’s in human nature. 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. Subject: Air Suspension System. Identify and describe three ethical issues from the documentary. 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 All stakeholders have their own self-interests. Enron Corporation was an energy company running out of Texas that was started when two companies, Houston Natural Gas and InterNorth, merged together in 1985. 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. The Smartest Guys in the Room: Management Lessons from Enron's Leaders While these problems are not only attributed to organizational issues, accounting firms, ENRON How did the structure of Enron impact the human behavior of those who were employed by the company? Hatfield, Patty, (2008) Using "The Corporation" as a powerful illustration of ethical issues facing the financial manager Among them are the conflict of interest between the two roles played by Arthur Andersen, as auditor but also as consultant to Enron; the lack of attention shown by members of the Enron board of directors to the off-books financial entities with which Enron did business; and the lack of truthfulness by management about the health of the company and its business operations. That single image calls up multiple meanings: faith fronting business; terrible irony; a real need for salvation. 'The Smartest Guys in the Room' tells some of the story of Enron's collapse: and it's a compelling tale, although I found the use of background music rather annoying (the story is divided up into titled sections, with each section being the name of a song, which feels rather heavy-handed and obvious). Stakeholders and Conflicts of Interest Modern corporations like Enron usually have multiple stakeholders with often conflicting interests and expectations. Enron leaders failed at this point to produce positive symbolic management within the organization. 1 Again, to understand the Scandal better I’ll recommend you to read the book written on it, The Smartest Guys in the Room. Corporate fraud, greed, corruption, what company comes to mind when you hear those words? This paper provides information on how the movie can be used … Directed by Alex Gibney, the film looks into the collapse of Enron Corporation that led to criminal trials of the company’s top directors. In 1985, Enron was born. It’s was a textbook version of what can go wrong in an organization that lacks a true culture of ethical standards. 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. Once priced at $90 per shares the price was dropped to less than $1 by November 2001. (Nothing is more hateful to wisdom than excessive cleverness. All those behaviors suggest that Skilling is one of those “bad apples” who knows how to be a leader but has low moral person. That was the reason why Andrew Fastow, the hot shot risk taker, was one of Lay’s favorites. ‘Enron: The Smartest Guys In The Room’ Frauds and financial scandals in the business world were before an Enron’s case and will be after it. ENRON ETHICS AND LAW ESSAY. Enron had a quick decline to bankruptcy and there were many people in the company involved in this bankruptcy that chose not to voice their concerns for many different reasons for a long period of time. He was the one who came up with the idea that the company didn’t really need any “assets. 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. Enron! This could be Enron 2.0. In this paper we will take a look into the corporate facts and history as well as, stakeholder relationships, organizational trust issues, ethical leadership and ethical culture at Enron. Enron scandal overview The Enron scandal was a financial scandal involving Enron Corporation and its accounting firm Arthur Andersen, that was revealed in late 2001. Check out other papers written by Elizabeth: Ethical Issues In Enron The Smartest Guys In The Room. Psychological Approach – Cognitive Moral Development (Appendix 1) and Locus of Control Applying Kohlberg’s Cognitive Moral Development (CMD) to Enron key executives, I think they all were struggling in Conventional level, between stages Three and Four. Board of Directors Role. II. October 17, 2014 55. In some ways, the culture of Enron was the primary cause of the collapse. Category. Unfortunately, he chose to set bad examples. Once priced at $90 per shares the price was dropped to less than $1 by November 2001. 1. , and organizational (world-class culture) perspectives. MBA 6070X That’ll help you to understand even the minutes of the Enron Case Study. Multiple ethical selves can explain best Ken Lay role in the Enron case. 21 McLean, Bethany; Peter Elkind.The Smartest Guys in the Room. In the Enron case, the reward/punishment system and multiple ethical selves are some of the key problems that help explain the Enron unethical activities. (2005). Instead, Ken Lay even said openly at a board meeting that the two traders “made too much money to let them go”. 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 Sorry, but copying text is forbidden on this website. Companies try their best to keep many of the accounting scandals quiet. 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 1989 Words | 8 Pages. If you found this story interesting then here … Watch out! 550 Enron is also one of the most celebrated business ethics cases in the century. Enron Documentary Rated R: The Smartest Guys in the Room Discussion Questions . Unethical Issues Enron The Smartest Guy In The Room Enron: The Smartest Guys in the Room Enron Corporation was an energy, commodities, and service company out of Houston, Texas founded by Kenneth Lay in 1985 Lay built natural gas power energy in East Texas which helped Enron’s stock rise. It's Free! 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. That’s only the most dramatic of the stories Enron: The Smartest Guys in the Room has to tell. We use cookies to give you the best experience possible. With the leaders known to be wise and smart, the workers, Enron – Ethics and Law Essay Practices such as mark-to-market accounting, complicated financial statements and special purpose… Watkins could either be a team player and do nothing or a whistleblower and raise the questions. At the time, the Enron scandal was considered to be one of the most notorious and compelling business ethics cases in modern generations. it took Enron 16 years to go from about $10 billion of assets to $65 billion of assets, and 24 days to go bankruptcy. At over $60 billion being scammed away from the public, they were the biggest fraud in history. 301 certified writers online 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. Literature review ………………………………………………………………, Introduction 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. Let Professionals Help You, Leave your email and we will send you an example after 24 hours 23:59:59, Let us edit for you at only $13.9/page to make it 100% original. This text is available online and is used for guidance and inspiration. 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