Enron: The Smartest Guys in the Room

Enron: The Smartest Guys in the Room

The Enron scandal has revealed numerous problems that exists in the modern American business as well as politics. At the same time, the core of all the problems of Enron lays in the mentality of top executives and such large corporations as Enron as well as smaller ones. In actuality, the strife for profit and maximization of profits become the dominant factors which define the policy of companies and their strategies. In such a context, it is possible to estimate that such a pursuit of maximum profit is based on the principle that ends justify means. On the other hand, the negative experience of Enron perfectly proves the extent to which this principle is erroneous and to what disastrous effects the strife for maximum profits can lead. In such a situation, it is obvious that the dominating “bottom line” mentality of corporations should be totally changed and corporations should be conscious of high risks of their strife for maximum profits.
On analyzing the current situation and modern business environment, it is necessary to underline that fast and huge profit goes ahead of ethical issues and moral concerns in the modern business. As a result, basic moral and ethical norms are easily violated when a corporation receives a chance to increase its profits consistently. In fact, today, ethics and morality are inferior, while profit is superior and it is very difficult to change such a mentality.
Nevertheless, it is necessary to start acting right now to change the situation for better. In this respect, it is possible to recommend introduction of ethical codes which could define basic ethical norms and principles regulating the relationship within corporations between executives and employees as well as the policy of corporations and its external relations with its customer and business partners. However, the creation of ethical codes is rather a benevolent action which does not lead to actual legal responsibility of corporations for its unfair or unethical policies.
At the same time, it is obvious that Enron has violated not only ethical but also legal norms. Therefore, the Enron scandal could be prevented if governmental agencies performed their functions effectively. The state control over the policy of the company and the correspondence of its actions to the existing legal norms could minimize the risk of the failure of Enron. Moreover, the pressure from the part of the state in the form of a strict control could increase the responsibility of top executives of Enron and, thus, it could prevent the downfall of the corporation and the scandal which accompanied the downfall.
In such a way, it is possible to conclude that the current profit-oriented mentality can be changed on the condition that actions are undertaken in two dimensions. On the one hand, corporations should change their policies and organizational culture and become ethically more responsible that may need the introduction of ethical codes in corporations. On the other hand, the role of the state is very significant since the state is the major regulator which should control the legality of policies of corporations.

References:
Khor, M. (2001). Global Economy and the Third World. New York: New Publishers.
Mohrman, S. A. (1998). Tomorrow's organization: Crafting winning capabilities in a dynamic world. San Francisco: Jossey-Bass.
Madsen, P., Ph. D., and Shafritz, J. M., Ph. D. (Eds.) (1990). Essentials of Business Ethics. New York: Penguin Books.