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OMM 618 - Week 4 - DQ 2

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Ethics and Organizational Culture
Answer the questions to the case, "Enron, Ethics, and Organizational Culture," at the end of
Chapter 8. Include at least one outside source supporting your answers. Explain your answers in
200 words. Respond to at least two of your fellow students' postings.
My tutorial includes two answers to this DQ and you should use any one of the two. Don’t
forget to rephrase (reword) it.
ANSWER 1
Based on what you read in this chapter, summarize in one page or less how you would explain
Enron’s ethical meltdown.
Enron ethical meltdown begins with the foundation of ethics and culture the organization sets
forth. Leaders are responsible for creating the foundation and to lead by example. When the
leaders are not following the ethical standards, employees begging to think this are acceptable
behavior. Managers can do a lot to influence employee ethics by carefully cultivating the right
norms, leadership, reward systems, and culture (Dessler, 2011, p. 239).
“When the governing bodies of corporations do not understand, or take account of all future
consequences, serious moral hazards result. Messick and Bazerman (1996) argue that potential
consequences are often ignored because of five possible biases: ignoring low probability events,
limiting the search for stakeholders, ignoring the possibility that the public will find out,
discounting the future, and undervaluing collective outcomes. It now appears that Enron
management and the Board maintained all of the five biases to some extent” (Uma, Dickes, and
Royce, 2002, p. 5).
It is said that when one securities analyst tried to confront Enron’s CEO about the firm’s unusual
accounting statements, the CEO publicly used vulgar language to describe the analyst, and that
Enron employees subsequently thought doing so was humorous. If true, what does that say about
Enron’s ethical culture?
The leaders of the organization set the standard for the ethical culture. Power can defy ethical
standards when used to persuade the audience. The CEO led Enron into the debacle and
defended his actions through persecuting people that had a moral compass. This behavior shows
the power the CEO had over the Enron employees. Enron had no ethical culture for the
employees to follow if the leader did not practice ethics.
This case and chapter both had something to say about how organizational culture influences
ethical behavior. What role do you think culture played at Enron? Give five specific examples of
things Enron’s CEO could have done to create a healthy ethical culture.

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Culture played some role in Enron because it ultimately was the leaders of the organization that
rewarded the unethical behavior of cooking the books for personal gain. On the other hand, one
person not afraid to stand up and uncover the scrupulous practices had a moral compass and was
concerned about the direction the company was heading. The CEO could have adjusted the
budgets and reduced the pressure to increase the financials. The CEO could have called out the
CFO and not approved the financial statements, he could have considered the effects on the
stakeholders and improved on the corporate and social responsibility.
Dessler, G. (2011). A Framework for Human Resource Management. Upper Saddle River:
Pearson Prentice Hall.
Uma, V. S., Dickes, L., & W, R. C. (2002). The social impact of business failure: Enron. Mid -
American Journal of Business, 17(2), 11-21. Retrieved from
http://search.proquest.com/docview/214182074?accountid=32521
ANSWER 2
Based on what you read in this chapter, summarize in one page or less how you would explain
Enron’s ethical meltdown.
Enron holds a permanent place in history for its infamous questionable ethics. In this case,
whether Enron’s breach in ethics constitutes an ethical meltdown is debatable. Undeniably,
Enron’s actions do reflect an ethical breakdown. In general, the financial books were “cooked” to
give the appearance of owning assets. People invested money in what appeared to be a stable
investment only to have their money taken. Essentially, Enron created a solid appearance based
in fabricated information. Part of the facade of Enron included the facade of ethics which is quite
ironic.
It is said that when one securities analyst tried to confront Enron’s CEO about the firm’s unusual
accounting statements, the CEO publicly used vulgar language to describe the analyst, and that
Enron employees subsequently thought doing so was humorous. If true, what does that say about
Enron’s ethical culture?
Because ethics refers to governing principles of conduct (Dessler, 2011, p. 234), this type of
behavior reflects the poor ethical dynamic that is the foundation of the corporation’s principles.
Like with many other situations, the ethical conduct at Enron slid quickly down the slippery
slope. Often times, one unethical action results in more unethical actions in order to sustain the
first action. As one ethical boundary is crossed the other ethical boundaries are more easily
crossed. Once the unethical actions had started, lies to cover them up were the natural next step.
As a defence mechanism or smoke screen, creating a diversion by humiliating the analyst who
questioned the accounting, took the heat off of the CEO. At this point, the ethical culture at
Enron had become as much of a shell as its financial appearance.

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Ethics and Organizational Culture ? Answer the questions to the case, "Enron, Ethics, and Organizational Culture," at the end of Chapter 8. Include at least one outside source supporting your answers. Explain your answers in 200 words. Respond to at least two of your fellow students' postings.? My tutorial includes two answers to this DQ and you should use any one of the two. Don't forget to rephrase (reword) it. ANSWER 1 Based on what you read in this chapter, summarize in one page or less how you would explain Enron's ethical meltdown. Enron ethical meltdown begins with the foundation of ethics and culture the organization sets forth. Leaders are responsible for creating the foundation and to lead by example. When the leaders are not following the ethical standards, employees begging to think this are acceptable behavior. "Managers?can do a lot to influence employee ethics by carefully ...
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