Moral Issue and Enron Research Paper

Open, View, and/or
Download this Document

Total Length: 732 words ( 2 double-spaced pages)

Total Sources: 2

Page 1 of 2

Ethics and Specialized Knowledge

Enron's case summary

Enron is an interstate pipeline company that was founded in 1985 as a supplier of power utilities. In the 20th century, Enron had grown quickly, and due to increased competition in the global market, the company decided to diversify and use international investments that would help in keeping their market position. Enron's rapid expansion exceeded their funding abilities, and this resulted in the creation of a complex web of off-balance-sheet financing (Silverstein, 2013). It is clear that they ignored the dangers associated with their activities in bringing serious losses. Moreover, in 2001 is when the company overstated on its revenues and its liabilities became hidden from the public.

Additionally, their driving culture became reinforced by incentive schemes that promised and delivered rewards that were huge concerning their compensation packages (Silverstein, 2013). As such, their outstanding performance required them to portray the company as able and the executives decided to use the mark to market valuation. The contracts produced using this approach had produced artificially high earnings and it is through this that investors were lured to continue purchasing the company stocks. Employees were also given suggestions about investing their pensions in stock options of the firm. For five years, the company managed to hide such fraudulent activities from the public, and those employees who doubted Enron's financial condition were either fired or silenced.

Stuck Writing Your "Moral Issue and Enron" Research Paper?

View All Our Example Moral Issue and Enron Research Paper

Have A Custom Example Essay Written



In the meantime, the top executives at Enron embezzled the company and managed to drive the stock prices high as they pocketed the investors' funds. During this time, the company was not generating cash flow that was adequate to sustain their extravagant expansion activities. In December 2001, the management filed for bankruptcy; Arthur Andersen's accounting firm was also affected and in the process because of its dealing with Enron, who was their client (Silverstein, 2013).

Ethical issue involved

The moral issue at Enron was the executives' personal pursuit of wealth using rapid growth strategies. This then led to the introduction of extreme schemes of investments that attracted and motivated people who were bright and driven by diversification and expansion activities. However, this resulted in having an unhealthy focus on the company's short-term earnings. Another ethical assessment is that Enron massaged its growth figures on their income and this left them with a cash shortfall. Therefore, they resorted to masking their borrowing abilities, and this resulted in the creation of schemes….....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"Moral Issue And Enron" (2016, December 03) Retrieved June 4, 2026, from
https://www.aceyourpaper.com/essays/moral-issue-enron-2163831

Latest MLA Format (8th edition)

Copy Reference
"Moral Issue And Enron" 03 December 2016. Web.4 June. 2026. <
https://www.aceyourpaper.com/essays/moral-issue-enron-2163831>

Latest Chicago Format (16th edition)

Copy Reference
"Moral Issue And Enron", 03 December 2016, Accessed.4 June. 2026,
https://www.aceyourpaper.com/essays/moral-issue-enron-2163831
   

Open, View, and/or
Download this Document
order custom essay example