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Enron And Its Shortcomings

Enron's overall business practices are not ethical. One business practice of Enron that I think poses an ethical issue is their attitude towards its employees. They create a highly competitive and a result oriented business atmosphere. They used a system where they would rank employees every half a year and fire employees who ranked on the bottom 1/5 of the scores. This kind of attitude where only results matter and if you don't produce anything good you will get fired will only hurt the company. This promotes unethical behavior and getting what needs to be done to get good results no matter what and if you do well you will receive big bonuses. This approach towards Enron's employees did not have very good utilitarian reasoning. This doesn't help employees morale and psychological satisfaction. The cost of this kind of approach was very low because in fact you will weed out the slackers but the results Enron had where employees afraid to question unethical situations in Enron in fear of their jobs.
Another section of Enron's business practice that is definitely not ethical is their accounting methods. In a technical aspect their accounting methods were fine, but this was only because of a loophole. Andrew S. Fastow was described as a financial whiz kid because of these loopholes that he knew how to take advantage of. Some of these things that he, and Enron, were able to take advantage of were the setups of special purpose entities. They would setup these special purpose entities and have either their friends or employees to invest in these special purpose entities so that Enron my say that their debts and liabilities are actually under the special purpose entities and not of Enron. This made it look like Enron didn't have as much debt as it should have had.
A second practice in the accounting methods that were not ethical was their manipulation of their revenue. What they did was to make either their earnings more or inflating their...

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