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Business Ethics

Business ethics is an art of applied ethics that examines ethical principles and moral problems that can arise in a business environment. This will mean that in a business there are problems that arise and they can be solved with in mind the information that is related to the problem. The business ethics can be a normative and descriptive discipline in that it can help one know how to go about a problem that has taken place ion organization and this will be through the use of techniques that are applicable in that particular time. The ethics industry has been seen to be in every organization in that the executive management and corporate boards are supposed to do the work that is set for them so that they can deal with the interest provisions. The ethic gurus that was waved by the Enron Company that the company was ion need of a business plan so that it can be able to operate well and this plan was based upon gaining competitive advantage in the market place through the intervention of government. The ethic gurus are concerned with the conflict of interest provisions so that they can offer the guarantee that is required. This means that ethics in a business is important and should be followed so that an organization can be able to gain high profits at the same time it can make the customers satisfied in provision of their products.( Robert,1997)

Enron is an American energy company that is based in Texas. Before its bankruptcy in the year 2001 this company has high employment of workers and it was the highest leading producer of electricity to the world. At the end of this year this company had report that showed that it had sustained conditions which were mostly institutionalized, systematic and creatively planned accounting fraud. This company faced problems where it was forced to reduce the production that it had for electricity leading to high effects to the countries that depended on it. This meant that this company caused changes in prices of electricity to change in that the prices raised and it left many people without jobs. This is an ethical question because this company been that it was the producer of electricity and having many employees to lead to high rates of prices where few people were able to afford. This meant that it was not an easy thing that had to be fought by the countries as they had on other things that could be done so as to bring changes that were desirable in the markets. Enron sold prisma energy international which was its last remaining business to ashmore energy international. Due to this scandal the lawsuits against the Enron’s directors were notable as the directors had settled the suits by paying very significant sums of money. The scandal caused the dissolution of the accounting firm which affected the wider business inn n the world. During its early years this company was in north and merged company that was initially named HNG even though inter north was the nominal survivor. (Marvin, 1995)

The company had built a large head quarters complex in Omaha. The company had different directors where lay was the one who moved this company to Houston and began to rebrand its products. From the products that were produced by this company then it was able to make high profits as it had many investments and ventures. In America this company was named among the top best companies that were productive and brought high income to the country. This meant that the company had high labor force but due to the problems that it later faced then it had to sell stocks and bonds at any and all costs. The records that were made on assets and profits for Enron were inflated and where no longer in existence. This meant that the company decided to reduce its production which later affected other countries that received electricity from the company. The company at the beginning was successful but due to the desire that it had for income then it had to fill the record of bankruptcy. Enron had created offshore entities which may be used for planning and avoidance of taxes so that it can raise its profit. This provided ownership and management with full freedom of currency movement and full anomity that would hide losses that the company was taking. The entities made the company profitable but it created dangerous spiral in which each quarter, corporate officers would have to perform more contorted financial deception. This practice of this company drove their stock price to new levels at which the executives began to work on insider information and traded millions of dollars to the company stock. The company later on made the use of online trading operations which was used by every energy company in the country. In pushing of the company aggressive investment strategy then it was able to become the greatest wholesaler of gas and electricity. Later the company was able to adopt the mark to market accounting in which it aimed at making more profits. (Johnson, 2002)

Enron success was measured by agreeable financial statements that were emerging from a black box, actual balance sheets prove inconvenient. This company continued with its practices that were not known by many in the country but it later reached its peak that was in the year 2000 when its highest value of about $90 were recorded. At this point these company executives who possessed the hidden information about the losses were forced to sell their stock. The general public and investors were told to buy the stock at this time. The executives did not make the information clear to investors but they knew the truth and just convinced the investors that the prices would go up to about $ 130 but they secretly up loaded their shares. With the executives sale of their shares the prices began to decline but they insisted to the investors to continue buying the shares as the prices would later rebound. The strategy of their director that is Lay were no longer in progress but what he did was to encourage investors to continue the purchase of shares as they claimed that changes in prices would later rise and claimed that Enron was heading in the right direction. In the year 2001 the company price had dropped to about $42 but still many investors still had trust on lay and believed that Enron would rule the market. They continued to buy but they lost more money every day. The ethical question in this is that the company was aiming at making high profits at the expense of people suffering. This meant that the society had to face the changes that took place due to price changes and the problem is that the prices that were given by this company could not be attained by all in these affected countries. This meant that high income was lost due to the dangers that were related to price changes and this set the target that the company could no longer offer the prices that were required so that high production could be reached. (Ben, 2000)

At the end of October the stock had fallen to about $15 but many saw the opportunity to buy more of Enron shares with the idea that they could have high income from the sale of share later with changes in price but their trust and optimism proved to be wrong. The executive was accursed of selling their shares at this time but they did not accept what they were been accused of. The company had high losses of about $102 million during that time which meant that the company was no longer at its operation any more. The analysts on wall street suspended the ratings on all energy companies conducting business in other countries due to the unlikely probability that the companies would receive full and adequate compensation for deferred energy accounts the black outs occurred mainly as a result of poor designed system that was used by traders and marketers. There was a revealed intention that Enron traders were revealed as encouraging the removal of power from the market during the time their was crisis in California where they encouraged the suppliers to shut down plants to perform un necessary maintenance and other things that they were accused of during this time of energy crisis. The acts that were done by the traders of Enron contributed to the need for rolling blackouts which affected many businesses that were in work and depended on supply of electricity and in convinced a large number of retail consumers. This will mean that with the changes in prices that took place in the country at this time the company was getting profits but after it was known what it was doing then it was forced to closure due to the problems it faced. Enron Company caused the change in price of energy by the affected countries meaning that it was the leader of the other countries in supply of energy. (Barbara, 2001)

Generally the most amazing thing is that this company later regained and sold its products after the prices raised. Therefore they were targeting at the prices to change so that they can have high sales and high profits. The Enron company executives were required to have business plan so that they can work out their problem to have a future that was better. The business plan was based upon the government manipulation of market processes to its benefits. The contributions that were made by campaigns had to capture the politically powerful means to this end. This means that the company had to involve the government participation so that it can have changes that are desirable been made to the free market. This was important because the company required changes to be made it their executives so that they can have a group of people who were ready to carry out the changes that were required in the organization. In using the government to open the foreign markets the case of Enron was to have many corporations in existence so that they can bring the production that was required by all. Many organizations that have to change their way of operations should ensure that they make researches so that they can know which changes to make to bring about high production in a country. This will mean that it is the work of executive directors to know what the society is in need of without having their interest of high sales and high profits. In face the company has to ensure that what is produced is important to society, in that it leads to satisfaction of basic needs of people. In the Enron Company the director was supposed to come up with strategies that could assure people that energy will be readily available but what they did was to have high process through their operations that affected the energy distribution. The business problems therefore should be dealt with by those who are in power so that they can have assurance to all the products are desirable and will lead to highest satisfaction. It is the work of executive officer in Enron Company to ensure that what is produced will lead to high production of gas and energy but they should inform the public in case changes take place so that the public is aware of what to do to have these changes that will be faced by the company not have high effects to operations of other related companies. Generally there is no organization that can work without ethics this is because if a company will lack these ethics then the products that will be provided to society and others in the country will not be desirable leading to problems. (Andrea, 1996)

Conclusion

The ethics that were related to energy reduction by the Enron Company set the best base in that the companies that related to it had to change their ways of operations. This is because ethically this company due to changes in prices had high effects to society and many retail businesses were affected. The fact is that this company knew the idea behind the things that were did and therefore they were ready to ensure that they affect the operations that were made by other companies.

Reference:

• Andrea, Y. (1996): business ethics. Oxford university press.
• Barbara, H. (2001): ethics at work. Boston.
• Ben, R. (2000): practical strategies for ethical decision making. San Francisco.
• Frederick, P. (1997): research issues and empirical studies. Greenwich.
• Robert, M. (1997): business ethics. Kluwer academic publishers, Boston.
• Ronald, Y. (2003): business ethics. Black well publishers. Malden.
• Marvin, w. (1995): working ethics. Jossey bass. San Francisco.
• Johnson, k. (2002): ethics industry and Enron. Reflections on ethics and values in policy.

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