The Crumble of Two Large Businesses Due to a Lack of Ethics

The Crumble of two Large Businesses due to a Lack of Ethics

Perspectives of Ethics & Leadership

Smartest Guys of the Room article highlights the unethical behavior and detrimental effects of two of the largest scandals in the US. The most recent decade has been one in which corrupt business hones has brought budgetary emergency to the United States as well as to the world. All together for a company to guarantee future benefits and strength, they should stick to a solid moral culture inside the Organization. Executing moral rules won't just implement adequate practices on the individual level additionally the administrative level. Creating a balance among the corporation will allow the business to strive and ultimately prevent financial crises such as the Bernie Madoff scheme and the Enron scandal.

Jeff Skilling and other notable top-level executives were responsible for the collapse of Enron. They faced money laundering, fraud, making false statements on financial reports, insider trading and conspiracy charges. The activities of Skilling and team display how they adhered to the values of respect, integrity, communication, and excellence articulated in the Enron Code of Ethics. Enron has been described as having a culture of arrogance that led people to believe that they could handle increasingly greater risk without encountering any danger. According to Sherron Watkins, Enron’s Vice President, Enron’s unspoken message was, “Make the numbers, make the numbers, make the numbers - if you steal, if you cheat, just don’t get caught. If you do, beg for a second chance, and you’ll get one” (Carozza, 2007).  Enron’s corporate culture did little to encourage the morals of admiration and truthfulness. These values were weakened through the company’s emphasis on delegation, its employee performance appraisals, and its compensation program. Jeff Skilling implemented a very severe and intimidating performance evaluation process for all Enron employees. Known as rank and yank, the annual process utilized peer evaluations, and each of the company’s divisions was arbitrarily forced to fire the lowest ranking one-fifth of its employees (Free, Macintosh, Stein, Bio, & Bio, 2015). Employees frequently ranked their peers lower in order to improve their own places in the company.

     ”Integrity is not a conditional word. It doesn't blow in the wind or change with the    

     weather. It is your inner image of yourself, and if you look in there and see a man

     who won't cheat, then you know he never will.” --John D. MacDonald

An effective business is controlled by directors who settle on morally revise choices. How somebody in control acts directly affects how representatives react and keep out of mischief. “Leaders are critical to the ethical performance of an organization. They are largely responsible for determining mission and values, developing structure, and creating ethical climates” (Johnson, 2016). Keeping in mind the end goal to have a business established and worked under a specific arrangement of morally determined measures, those that are utilized in administrative positions must have morally moral conduct.

The financial crisis that affected so many people was masterminded by Bernie Madoff. His intentions may have been to make money for both him and his clients however he created an unethical scheme that spiraled out of control. As we studied in chapter one, a great trait in leadership is utilitarianism. Having the ability to place a larger number on the largest good (Johnson, 2016). Madoff might have thought he his decisions was based on the aspect being that it maximized money for himself and his friends buy in reality it was selfish and pathological. Bernie justified his scheme by believing that his actions were morally correct and ethical because he was maximizing the good and minimizing the bad. Bernie asked people to invest in his funds by handing out personal invitations which made the investors feel exclusive. The scheme revolved around Bernie constantly seeking out new investors in order to pay the existing investors.

This circumstance could have avoided if the key players acted morally. Bernie Madoff chose to violate the law, mislead customers and steel their cash due to covetousness, peer pressure and a general nonchalance for others. His predominant plan of action was conflicting with essential morals and the law. On the off chance that he chose to submit to the laws and be straightforward with financial specialists, this would not have happened. He guaranteed significant yields, realizing that he couldn't create it and eagerly denied any wrongdoing up until he was caught. He and the other scheme participants could have volunteered the truth at any point but chose not to.