Ethical Responsibilities of Corporations Enron’s Downfall Essay

Ethical Responsibilities of Corporations Enrons ruinationIntroduction       Enron, in the 1990s was a premium companionship that had the a gr ingest deal-coveted worldwide stature that most go with heads desire. It is considered the most advanced comp either(prenominal) in the United States of America. It was a change from the old industrial trend that opposite old and rusty enterprises and industries were used to hard assets, in the favor of the much softer e-commerce business world. The comp either was a premium employer in the USA and the world, employing over 20,000 staff by the time of winding into bankruptcy, in 2001 (NPR). The company dealt in natural gas, electricity, pulp and paper and communication. A course of study before closure, the company was valued at $111 billion and had held the title-for six years running-of the most innovative company in America.       However, this valuation respect was based on falsehood. The company wa s discovered to shake off been operating a scandalous accounting fraud, score by systematic, institutionalized and creativity. Ironicall(a)y, as it was named the most innovative company, which might receive been true, mastervided not in the upright way that it was perceived to be. This was provided in underhand deals that its employees and man ripenment had mastered. What culminated into the Enron Scandal has since become a ofttimes referred to a case of willful corruption and corporate fraud.       Companies and corporations, under the national law, read a duty to their employees, consumers, the giving medication and the environs in which they operate. To the government, corporations atomic number 18 supposed to construe tax compliance and safety of production to citizens and environment. The firms and companies agree a duty to protect their employees and provide safe work environment conditions for them so that all employees are always treated equitab ly and satisfactorily. Consumers live with a right to accurate in take a hopation regarding the products they purchase. The information is to provide at free will and is to guarantee consumer safety.       In Line with that responsibility as stated in the paragraph above, Enron management failed to safeguard their employees future and livelihoods in case their bubble burst. At the time Enron went bankrupt, Thousands of employees it had in its baskets were plunged into melodyless(prenominal)ness suddenly. This scandal twisty pull down natural elevation government officials who were then overlapholders. In the light of them acute that Enron engaged in malpractices-they still were happy to take home the potent dividends they got from the stock merchandise gains.The magazines Magazine talks about the top executives who enjoyed lots of privileges that even top CEOs envied. For example, Kenneth Lay, the Former Enron Chairman is said to excite received a golden pa rachute worth $25 gazillion and about $200 million in salaries since 1999 to its point of fall. Despite all that, he also enjoyed the access to about $7.5 million revolving credit creese from Enron (Roston, 2002). Others who enjoyed much(prenominal) benefits include Jeffrey Skilling (former C.E.O), Duncan David (Former Anderson Partner), Nancy Temple (Anderson Lawyer), Thomas White (Secretary of the Army), and Sherron Watkins ( Former Enron feebleness President).The government through the law has set up different commissions to ensure that these obligations are duly followed (example of one is the Federal Trade counselling (FTC)). FTC is supercharged with taking complaints about false business promises that turn out fraudulent, or cause harmful side effects to the consumers and forwarding them to investigation agencies for make headway action (Federal Trade Commission, 2014).       In the past, the things that brought down companies were far from cleverly cra fted schemes such as what took place at Enron. The operation on the stock fill in succession on a negative financial record and receiving believably more than their passably share of investments. Among different key ethical give forwards that had arisen in the past included racial profiling, product safety concerns, employee rights infringement and even environmental degradation. There provoke been lists each year of companies that should be shunned for sheer of ethics. For the past few years, companies such as ExxonMobil, Apple, Toyota, Trafigura, and recently Wal-Mart and Nestle had do head aviations for breaking the crucial ethical rules.       The Federal Employees Compensation Act (FECA), establishes mechanisms for fee of employees who are injured, or get any damages in the line of duty (Office of the Secretary, 2014). In the case where an employee was hit by a truck and laid off without compensation, is very inhumane act of the companys executives.        The Fair Labor Standards Act (FLSA) is set to be the benchmark for fair pay distribution to all American employees. It provides guidelines for employment and wages to be paid to employees who are not exempted from work. Conditions have been set for certain jobs and age restrictions. These labor laws, for example, require that particular groups of people not work at certain times, and in particular professions, citing dangerous operations (Office of the Secretary, 2014). If the labor laws are followed to the letter, no employee will complain about unsatisfactory pay, as the marginal wage is set with all employees in mind and ensures a prospering life away from well-being.       Kirk O. Hanson, a university professor at the University of Santa Clara, explains the ethical responsibilities of a corporate board. He lists five important points that are to be keenly upheld by any board of directors in order to ensure gaiety from all quarters. Amon g separate key assignments on a board, one of them is to actualize the companys ethical culture. Most board members are less involved with the day to day activities of their businesses, and to get feedback from employees, they rely on pro forma reports and complaint letters. It is their responsibility to investigate the validity of the reports and come up with disciplinal measures if need be (Hanson, 2014).       Business fair play is an important panorama of ensuring healthy and profitcapable competition among business people.        such a guesswork that they respect individual rights of association and expression and yet reject the mentation of unionization is ridiculous. Under sections 7 and 8 of the National Labor transaction Act of the Federal constitution, employees are granted rights to make a matrimony and take part in labor union activities. This is without any bullying from employers, or punishments of any kind. every(prenominal) employees have a right to read, dish up and discuss matters of union membership during hours away from work. They are free to share the information with whomsoever they please. Once they decide on a group final cause for whatever union, they have a right to ask their employer to recognize the ad hoc union, bargain and complete any relevant requirements by the terms and condition. The employees have a right to display Union messages in whatsoever style they please be it caps, pins, T-shirts or whatever else available on the job or away from work.Company executives are not supposed to profile any employees by forcible transfer, denial of benefits, pay rise or coveted assignments in effort to thwart employees quest to join or form a union. They are not to be harassed, threatened or ignore from work if they support any union (Lisa Guerin, 2014). All in all, we do need quick solutions to problems such as these. It is not skillful an issue for the employees alone because it affects all American citizens, and per the house committee on procreation report.       General Electric, a company that was founded by Thomas Edison, has on umpteen occasions received accused on several occasions of severe to monopolize the inventions by him. It is the current military contractor for war machinery. However, they have once been reported for facilitating the development of nuclear weapons. Nuclear weapons have long since been banned and are regulated by the international bodies. The purpose of such an undertaking should be investigated, and due punishment administered.       The American mankind should instruct indicators of unethical rules of conduct and shun such businesses. It will be a significant boost in fighting such a offense as it will prevent oppression of fellow citizens. If people followed such a trend, companies such as this would lack a ready market and might be laboured to change the practices or close shop.       All firms that are established in corporate agreements uphold certain profound duties. In order to solve this massive crisis of ethics, law should be passed forcing cloak-and-dagger sectors to publish their financial reports in detail in the public dailies. The public should be trained to watch for companies that uphold employee rights and safety. These statements should be audited by government agencies for any lies. If the reports are found to be untrue, government should snatch such operators their licenses.       Companies and corporations that evade taxation of any kind should be imposed with spacious fines. In order to shun such practices, and in extension, be proscribe from operating for a particular period of time and board members is investigated. If any allegations of misconduct are proven right, all board members should be forced to resign and take responsibility for their ineptness. Enron was a culprit in this category, avoiding any financi al obligation it would have to offset to the government or anyone, provided that it was able to cover its tracks well.       On an opinion proposed from the Financial Times magazine, the graph of doing envisions that the downfall was blow-by-blowly planned. It seemed that most of the top echelons had long planned the exit, but it did not happen in the most expected way. The stock outlay came crashing in a year, from a cost of about $80 in January, the year 2001 to a tumbling zero by January in the year 2002.       In the Film Enron The Smartest Guys in the Room (Gibney, 2005), as based on the same name written by Bethany McLean, the Enron Disaster is the greatest accident any company has witnessed in the whole of history. A crash in a year with more than seven corporate walking away from the mess with over 1 Billion US dollars. Investors and employees went down tight without any landing gear. This kind of corporate ethics gap leftover more Amer icans depending on the public for necessary handouts and relying on other insufficient means to survive. The Drama resembles a Greek tragedy and a show of the domino effect that could shape the face of the American ethical code and ultimately the economy for a long time into the future.Kenneth Lay, the companys chief who had exceptd ib once before in the 80s and later taken over as C.E.O wielded so much influence In two the business and political circles. Probably out of the campaigns he had funded for the presidency among other legislative dockets. In the Business circles, he was an enviable C.E.O, who was practically inviolable. But in the wake of the ethical backlash, all these attributes could not save his company from sinking to the bottom of the sea that is failed companies.       Ethics is more than just producing good products, supporting community initiatives and giving good salaries. Companies with a wholesome ethical background will go to extents to ensure consumer safety, business fair play and ensuring that employees who served diligently go home safe to retirement. Even by and by retiring, they will be entitled to the same happiness they had while on the job(p) for the same company, and health.       All corporations that breach conduct on ethics should be nationalized in order to safeguard the interests of the public. Its owners should then be duly make up and never allowed to start any other business within the country. Such a law will instill fear and caution among those who have a penchant for breaking the law.       Consumers and the government need to be careful about safeguarding the economic environments. Since any ruction could lead to financial turmoil like it did with the instability of some few big companies in the ahead of time 2000s that lead to the 2007-2009 global financial crunch. The government can help by sealing off all loopholes that could allow any forms of corruptio n while the consumers could channel their money to the right businesses.       If we all stopped buying brands that do not have its people at heart, all companies and many other manufacturers would forcefully comply duly with laws of labor, taxation, and biosafety. We will have a separate world where many Americans and people around the world can eat by their sweat, as opposed to having jobs but still relying on welfare for upkeep.ReferencesFederal Trade Commission. (2014). Bureau of Consumer Protection. Retrieved descentember 06, 2014, from Federal Trade Commission http//www.ftc.gov/about-ftc/bureaus-offices/bureau-consumer-protectionGibney, A. (Director). (2005). Enron The Smartest Guys in the Room Motion Picture.Hanson, K. O. (2014, August 14). Business Ethics in the News. Retrieved Dec 06, 2014, from Santa Clara University http//www.scu.edu/ethics-center/ethicsblog/business-ethics-news.cfmLisa Guerin, J. (2014). The Right to Unionize. Retrieved December 06, 201 4, from NOLO For all http//www.nolo.com/legal-encyclopedia/free-books/employee-rights-book/chapter15-7.htmlNPR. (n.d.). The Fall of Enron. Retrieved Feb 4, 2015, from http//www.npr.org/news/specials/enron/Office of the Secretary. (2014). abbreviation of the Major Laws of the Department of Labor. Retrieved December 06, 2014, from United States Department of Labor http//www.dol.gov/opa/aboutdol/lawsprog.htmRoston, E. (2002, Jan 22). The Enron Players. Time .Source document