The Crooked E - the Unshredded Truth About Enron

The Crooked E- The Unshredded Truth about Enron

The movie, The Crooked E, chronicles the rise and fall of the Enron Corporation. Enron was a large organization and was one of the world's leading electricity, natural gas, and communications companies. Enron met its demise in the fall of 2001. The company's accounting fraud practices was publically exposed. The movie depicts the inside scoop on relationships between lower level employees and leadership. The Crooked E sheds light on the fact that it is up to the organization's leadership to establish and enforce the code of ethics.

To begin, let's examine why it is important for the organization's leadership to establish and enforce the code of ethics. It was obvious in the film that leadership, Chairman Ken Lay, CEO Jeff Skilling, and Sherron Watkins, all exhibited unethical behavior. So, bottom level employees, such as Cruver, mimicked their behavior. Cruver began to adopt the same unethical principles his leadership displayed. He became blinded by the promised multi-million dollar bonuses. Leadership at Enron focused only on monetary gain, instead of the best interests of shareholders and the public. Enron avoided paying federal income tax for four years and received millions of dollars in federal-tax refunds. Similarly today, I believe many corporations in the private sector are like this. They will go to any extreme and misappropriate company funds for the interest of themselves. I worked for an insurance firm for almost three years before I was laid off. I saw how top level management would get big mid-year and annual bonuses, company expense accounts, and what appeared to be an unlimited amount of vacation. It seemed as if the only time reference was made to any code of ethics is when I attended the first week of training when hired or when someone was in trouble. Otherwise, unethical behavior was not only tolerated, but swept under the carper so to speak. Management would try to cover things up and maybe send the employee home for the day, with pay, make an announcement to staff and then everything would be "ok". What's ironic is the fact that after the fall of Enron and other major companies that were exposed, such as AIG, the leadership team at my organization began to make some big changes. It seemed as if overnight management began accepting accountability, actually doing work, and enforcing the code of ethics. Unfortunately, by this time I was only there for three weeks before I was laid off. Therefore, I cannot attest to whether or not the new behavior and accountability remained.

Had top management at Enron enforced the code of ethics, they would have been models for bottom level employees to follow. One act of unethical behavior was exhibited by Enron's management team hiring ex-strippers as secretaries. This alone made it clear to me that no one gave a second thought to the decisions that were being made. Even if an HR person hired a stripper, there should have been someone else in management to refute the decision, but instead it was acceptable. Even after the their fall, one employee pulled down her blouse to show the "e" tattooed on her breast. The unethical behvaoir that went on at Enron was definitely nothing to be reckoned with because this poor woman thought it was appropriate to go get a tattoo and had no problem humiliating and exposing herself to the public! Top management did not hold employees to doing work. This was exhibited by the extreme office parties, overextended expense accounts, and employees sitting around shooting paper into waste baskets. It was interesting for Mr. Blue to place blame on everyone. He blamed the bankers, brokerage houses, auditors, politicians, and financial analysts. One thought that occurred to me was why didn't anyone in the organization say anything? The problem could have been handled early on. So, to me everyone there, even Enron's affiliates are to blame. They all acted unethical.

Overall, Enron's practice of unethical behavior corrupted the organizational culture. "In today's competitive business environment, some companies try to get by with unethical business practices in order to be sustainable (Yusoff, Salleh, Zakaria, Vadeveloo, and Luqman, 2011)." Enron execs schemed up tricks to make their company look good on paper. For instance, Jeff Skilling made up the "mark to market" accounting trick that booked the full value of any long-term deal as immediate revenue and Fastow made up off-the-balance-sheet partnerships. Enron execs paid themselves a commission for brokering such private partnerships, but the partnerships got to borrow more money from the banks without its showing up on Enron's books as debt (Leonard, 2003)." An enforced code of ethics ultimately shapes the behavior of employees. When leadership demonstrates ethical behavior, employees have no choice but to get on board and act accordingly. Just because a code of conduct exists does not mean it will be followed or enforced. It is the leadership's job, CEO's like Skilling,