Paper 6

Part 1: Unethical Leadership at Enron

(Based upon the case study on page 358-359 of your text)

1. How can the theories in this chapter and the theories of leader influence on
organizational culture (chapter 10) be used to explain the unethical practices at
Enron?

Many theories can be influenced by the unethical practices for the company
Enron. Enron used many unethical practices, they can be explained by doing
mostly the opposite of authentic leadership and ethical leadership. Most of the
practices done were dishonest and the company’s integrity was to obtain wealth
and not doing right by the employees and shareholders. Enron’s practices did
not follow the this leadership theories suck as model ethical behavior in own
actions, the companies CEO and leaders withheld information to be free of taxes
and obtain more money by making the public think they were in good standing.
Also they did not follow to find people fair in ethical ways to solve problems and
solutions, instead Enron used offshore accounts and accountants that helped
them withhold money which in turn created conflicts of interest. All in all the
culture of the company was not based on moral values, although they did
attempt to do right by the imagination it was a ruse of a bigger story.

2. What can be done to reduce this type of unethical leadership in the future?

What can be done to reduce this type of unethical behavior in leadership is

being honest and ethical by making decisions that will help the company.
Although some decisions may not always be cost effective or make money,
the decisions that should be made are to hold ethical values and in the best
for employees and shareholders. Being honest in earning to government
agencies, not using offshore accounts to store funds, using food hiring
practices and not firing unsubordinated based on power are just a couple of
the examples that could be changed in this scenario.

3. Who was affected, and how, by these practices?

People Affected Negative Affects Positive Affects

1. Unable to excel 1. Abe to find an
based on unethical opportunity with a
1.Employees practices. Losing better ethical
2. Stakeholders
money by putting it company.
3. Leadership/CEO
in company stock Experience with
that was based on company could
irregular number, have been gained
 money loss. Losing to use in future
jobs because experiences.
company went Ethical learning
under due to from situation.
unethical practices 2. Able to make
and went bankrupt. better choices in
2. Losing money in the future, learn
stoke that was from mistakes. Act
invested. Loosing more ethically in
reputation due to future.
investing in an 3. Take ownership
unethical company. form wrong doings.
Not doing due Learn from
diligence with mistakes and
investments in hopefully act more
companies. ethically with
3. Loss of reputation, future decisions.
loss of money.
Ruining the
company name and
values. Possible
imprisonment and
future
unemployment.

Part 2: Ethics Simulation

1. Report your simulation score by copying and pasting (or screenshotting) your
results.
You earned 91 percent.
Background
TriState Dairies is a regional dairy firm. The CEO has appointed you to be its chief ethics officer.
The CEO wants to enhance TriState's reputation as a company that is ethically responsible, as
required by its mission statement. This is a challenge as TriState's operating expenses are high,
limiting the company's ability to modify its business activities.
As chief ethics officer, it is your responsibility to establish ethical guidelines and social
responsibility activities for TriState to follow. You want to achieve as great a public benefit as
possible, while still minimizing costs to the company.
Defending Social Responsibility Activities
You discuss with the CEO your plan to do the most good at the lowest cost. The CEO asks: "Why
don't we just make a financial donation to a worthy cause?" What is the best response?
YOU CHOSE OPTION 3

TriState could simply donate money, but there are additional ways that TriState could achieve
the same positive impact at a lower cost.
When the CEO suggests making a simple financial donation, you argue that the company could
achieve the same positive impact at a lower cost. This was the best argument in favor of social
responsibility activities. While donations can do good, a company in TriState's position can
likely find other ways to have a greater impact at lower costs.
Choosing a Social Responsibility Initiative
Because resources are limited, management wants to choose one social responsibility project
for immediate action. Success here could lead to more projects down the road. For now,
management wants your recommendation: Which project is most likely to have a large social
impact at the lowest cost, and lowest risk, to TriState?
YOU CHOSE OPTION 3
Donate surplus TriState dairy products to people who need them.
You decided to donate surplus TriState dairy products to people who need them. This was the
most economic choice for a social responsibility initiative, because it simply required TriState to
deliver resources that already exist.
Donating Surplus Products – Selecting an Approach
What would be the best way for TriState to donate its surplus dairy products?
YOU CHOSE OPTION 2

TriState could work with community organizations to ensure that the products are stored and
refrigerated properly.
You decided that the best way for Tri State to donate its surplus products would be to work
with community organizations to ensure that the products are stored and refrigerated properly.
This was the optimal choice, because the donated products could spoil if they aren’t
handled properly. Further, community organizations can effectively and efficiently manage
distribution of the products.
Code of Ethics – Finding its Flaw
You read TriState's current code of ethics. In summary, it states that employees should be
treated with respect, that all business should be carried out in accordance with all applicable
laws, and that any violation of TriState's ethical guidelines is cause for disciplinary action.
What is the best criticism of this code of ethics?
YOU CHOSE OPTION 1
It covers no ethical responsibilities beyond conforming to law and supporting employees.
Examining Tri State's code of ethics, you determine that it covers no ethical responsibilities
beyond conforming to law and supporting employees. This was the optimal criticism to be
made, because a code of ethics should cover responsibility to the public.
Code of Ethics – Determining Ethical Responsibilities
How will you determine TriState's ethical responsibilities?
YOU CHOSE OPTION 3
Determine TriState's core values, and specify goals based on those core values.
You decide to determine Tri State's ethical responsibilities by determining Tri State's core
values, and specifying goals based on those core values. This was the optimal choice, because a
code of ethics should be based on core values.
Code of Ethics – Enforcement
Now that the code of ethics has been revised, how do you intend to measure how well
employees are conforming to the code of ethics?

YOU CHOSE OPTION 1 Performance reviews

You decide to enforce the revised ethics code by using performance reviews. This was the
optimal choice. By making the ethics code part of the performance review process, you are
demonstrating that ethics matters and each employee is accountable for honoring the code.
Testing the Code of Ethics
TriState is selling a high-fat, high-sugar yogurt snack called Lactose Defiant. Which of the
following, if true, would argue that selling the product violates TriState's code of ethics?
YOU CHOSE OPTION 2

Companies that offer unhealthy products should offer more healthy alternatives.
When asked why selling an unhealthy yogurt snack would violate TriState's code of ethics, your
response was that companies that offer unhealthy products should offer more healthy
alternatives. This was a poor reason, because offering healthier alternatives would then justify
selling an unhealthy product.
Being Ethical
What would be the best way to produce and market Lactose Defiant in a way that could be
considered ethical?
YOU CHOSE OPTION 1

Label the product clearly, to indicate its nutritional hazards and/or benefits.
You decided that selling an unhealthy yogurt snack could be ethically justified by labeling the
product to clearly indicate its nutritional attributes. This was the optimal choice because it is
the most honest and accurate. It provides the consumer with the best information to make a
dietary decision..
Congratulations
The CEO says:
"Well done! The social responsibility activity was successful, and we have a code of ethics we
can rely on."
Ethical Dilemma
Jane, a TriState employee, speaks to you privately:
"I'm concerned about the fact that the barns aren't being kept clean and that the animals aren't
being checked for disease and infection. I'm not sure what the rules are about this, but I
thought you should know because I think it's a problem."
YOU CHOSE OPTION 2

Jane's concerns should be taken seriously and investigated. She should be rewarded for
bringing this to your attention.
When an employee informs you of Tri State's unsanitary treatment of its farm animals, you
respond by rewarding her for bringing the issue to your attention. This was an optimal choice
because it promotes an ethical culture and recognizes employees for doing the right thing.
Furthermore, Tri state now has the opportunity to alleviate the issue and better protect
customers and employees.

2. Reflect on your experience completing the “Ethics” simulation. Was there

anything that you found particularly difficult? Anything that surprised you? What
insights did you gain from completing this simulation?
 This simulation was overall not as difficult as past simulations. The one thing
that was particularly difficult was picking the most cost effective option to
donate the surplus product. What surprised me was the additional scenario at eh
end, the employee Jane expressing her concerns about the wellbeing of the
animals which could have played a bigger part in the ethics simulation. I was
surprised only one question was involved with handling that problem. The
insight I got from this scenario was problem solving, as well as picking the most
ethical ways with handling code of ethic and how to distribute them to each
team member by peer reviews. I feel I ethically picked the best decisions and I
got my best score so far on this simulation.

3. How could you use the concepts discussed in this simulation in your job today?
Relate these concepts to the textbook and other course materials and to your
own experiences.

What I can use from this simulation is really weigh all the options you have in
making a formed decisions. Ethics can be lead to controversy if not handled
correctly and especially the scenario with Jane in the end, choose to look into
her complaint although it was not included in the code of ethics all employees
concerns must be addressed and handled properly. I can use this in my job by
addressing all the employees concerns regardless if in code of ethics.