Fraud There are many reasons that someone would commit fraud and only those people will ever know what pushed them to do so. The three main factors that contribute to fraud are opportunity, financial pressure, and rationalization. If the workplace does not have proper controls in place to deter people from wanting to commit fraud, it makes it easier to do so. The financial pressure portion of this can sometime be fueled by nothing more than greed. Mostly this occurs because an employee has financial issues and believes that the company would not miss even a little bit of money.
Anderson didn’t do this. He swindled the investors, and the public by keeping all information quiet. Anderson did amount of contribute to the disaster when they overlooked the management by the let down to have Enron direct and enforce their own company internal controls. The flaws that Anderson had is his own internal control. There has to been beliefs the partners were more motivation by the revenues recognition, overlooking things and providing services to the company.
2. Assuming you believe there was unethical conduct by Andersen/its employees, how did this happen? This happened because of the close relationship between the audit firm and their client, in this case Enron, contributed to biased judgments and interpretations of accounting practices and standards. Enron, an incredibly competitive firm whose managers were heavily incentivized to maximize profits (and hide losses), was a large source of revenue for Andersen over the years, and to cause conflict by disagreeing with their accounting practices could have caused Andersen to lose the account and revenue stream. Andersen employees took the approach that it is in the firm’s best interest to keep Enron happy.
Also, company Q’s only concession to changing policies is to begin carrying high margin, or high cost, products at all of its stores. Company Q has also set a bad precedent for trust within the company. It has effectively labeled its employees as thieves. In all relationships, trust is a two way street. If company Q cannot trust its employees, how can they expect their employees to trust the company?
Ken Lay set up a culture of greed and a mentality that the bottom line profit is what was important. How would you address the issue of the employee reward system and how it contributed to the culture of greed? What would you have done about the conflicts of interest that went on in the company? You are
Deceitfulness: deceiving others for one's own welfare, not restraining from conning and telling lies. Corrupted corporates very often refer to cons and lies in both inside and outside environments. A lie should originally start from the inside, by deceiving their workers they can deceive their customers and partners. Impulsiveness, irresponsibility, and lack of of foresight. Psychopaths are impulsive and irresponsible,
The variability in prices in the market was due to the business practices of speculators, who used their abundant resources to manipulate prices to their advantages. This led to more extreme booms and busts and overall hardships for the average American. This was perceived as an oppressive system and led to the growth of new economic theories promoted by Karl Marx and Friedrich Engels who called the dissolution of custom, tradition and morality “in the icy waters of egotistical calculation” the reason for humanities
Also they believe in treating their employees with respect and dignity. The Costco Company rewards their employees, because they participate in self-management, which was stopped or forgot about in many of the other corporations in the 1990’s. A lot of the other companies went in the “opposite direction believing, like Wal-Mart, that investing in workers is too costly, and that low-price competitors will drive them out of business if they do so”. I think these executives have room to change and make the right choice. Here are two examples that I would like to discuss, for instance there is Fed-Ex, which has chosen to go with low-cost model for their drivers to use on their deliveries, Fed-Ex even contract out to other delivery business.
Bribery promotes inefficiency and ineffectiveness of the business system and adds to the cost of doing business. A further cost relates to leadership, specifically because leaders exert the most powerful influence on ethics, defining by their behavior what is and is not acceptable. Therefore, when high profile citizens are involved in bribery and corruption, their impact as role models is very damaging. The message is not only that unethical and illegal behavior is acceptable, but also that the pursuit of personal gain takes precedence over service delivery. This risks creating an unethical culture among ordinary citizens where such "lowest common denominator" behavior predominates.
The Enron Case Sheronda L Burrell Professor Best LEG100 – Managers & the Legal Environment October 26, 2010 Describe the corporate culture at Enron. Enron was basically a company who’s trading and risk management business strategy was built on assets largely owned by others. The complex financial manipulation and off-balance-sheet partnerships that former CEO Jeffrey K. Skilling and chief financial officer Andrew S. Fastow implemented were intended to remove everything from telecommunications fiber to water companies from the firm's balance sheet and into partnerships. What distinguished Enron's partnerships from those commonly used to share risks were their lack of independence from Enron and the use of Enron's stock as collateral to leverage the partnerships. (Kadlec, 2002) If Enron's stock fell in value, the firm was obligated to issue more shares to the partnership to restore the value of the collateral underlying the debt or immediately repay the debt.