Ethical Erosion at Enron

Abstract

Enron Corporation, the seventh-largest company in the nation, was named “America’s Most Innovative Company” by Fortune Magazine from 1989 through 2001. Ironically, the company collapsed spectacularly in 2001 into bankruptcy and set off a wave of investigations into corporate malfeasance. The failure of both fiscal regulators and business analysts to notice the deterioration at Enron can debatably be labeled as the biggest business ethics failure in corporate history. The focus of this article is on the failure of Enron in conducting e-commerce due to unethical employee issues. Enron engaged in a series of complex transactions specifically to mask its activities. And yet the company saw no need to pay taxes in four of the last five years of its existence.