Unethical Decision-Making at Enron Which Led to Its Demise

Too Big to Fail?
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Unethical Decision-Making at Enron which Led to its Demise
Enron's scandal shook the media, as rumors that its leaders committed accounting fraud spread like wildfire. The rumors were shortly confirmed when the company filed for bankruptcy in 2001. The leaders, Kenneth Lay (CEO) and Jeffrey Skilling (Chief operating officer and president), are repeatedly highlighted as the ones who caused the company's downfall (Tang et al., 2018). The major claims associated with the downfall were accounting frauds, faulty trading practices, and corporate culture and ethics issues. The leaders at Enron were not morally and ethically responsible when making major decisions, which led to the eventual demise of Enron (Ghazzawi, 2018). One example of unethical organizational decision-making was when the CEO, Kenneth Lay, began selling the company's shares when he learned that the company was taking a downhill move (Rao, 2018). By this time, he and Skilling had destroyed the company's culture through malicious and unethical decisions.
When Lay started selling the shares, he was cautious that their value would eventually depreciate once it got worse. He was clearly after the huge chinks of money since he was already used to a luxurious lifestyle and was worried that he might not sustain it afterward. He was used to using the company's resources to fund his extravagant and luxurious lifestyle, such as using the company’s private jets to entertain his family (Rao, 2018). He also practiced nepotism, where he used to form new companies to incorporate his friends and family. Since the leadership of Skilling and Lay started, the company began to lapse (Ghazzawi, 2018). Their behaviors were totally unethical because they eventually eroded the company's culture.
Some of these behaviors included engaging in malicious activities, which put the employees and the company at risk. Skilling and Lay did this solely to benefit themselves ...