GARCIA, RALPH GIO P.

MINI-CASE ENRON’S CODE OF ETHICS

The analysis of the Enron’s scandal and the involvement of

employees in the scandal will be presented in this paper. It
will also discuss how the Enron’s officers vote to put aside the
key elements of the code ethics and the degree of conflict of
interest that may be presented in the Enron Corp. The analysis
will also emphasize on how corruption leads to different
aspects.

Running and organizing a corporation requires lot of

sacrifices and perseverance. In order to achieve success, there
are processes to be followed and functioned. But, leaders of a
company shouldn’t take everything out of immorality. Morals must
be represented in every function of the company, work must be
done ethically and company must promote the rights of the
workers.

Code of ethics is structural process that will involve

ethics and morals in every company’s functions. The missions and
values of the organization must be integrated with ethics that
will approach functional problems by creating ethical principles
in the core values and standards of company’s organizational
structure and function.

From the representation of the case, I think the employees

doesn’t have any knowledge about the vote that will put aside
the key elements of Enron’s code of ethics, it’s because of the
fact that no one reacted to the fraudulent acts of the executive
officers, even though they might be afraid to tell the
wrongdoings, there will be always one person that will leak all
the fraudulent acts in a company. And if they knew it from the
very start, they will be shocked and some of them may leave the
company because they can’t work immorally. Some of them may also
create a union that will protest about the vote to put aside key
elements of the company’s code of ethics.

The employees of Enron Corporation didn’t plan to defraud

investors all along. Some of them might be encouraged to do it
for money or with connection with Arthur Andersen but in some
cases that if they are involved in the fraudulent acts of the
executive officers, they must be working in fear of being put in
jail or the pressure of losing everything if they have been
caught in the process of fraud. The executive officers might
manipulate the employees in order to work for their fraudulent
acts. The employees are being caught off guard if the case
involves them in the fraud situations.

The extreme conflict of interest that Arthur Andersen with

the Enron Corporation is represented in the case by Andersen
providing consulting and auditing services for fees running into
millions of dollars. Then some of the employees are also
encouraged to cooperate with Andersen because they are blind to
earn lots of dollars. The conflict of interest also strengthened
when Enron hired Andersen employees to manage the affairs of the
former colleagues. It means that the employees working for
Andersen’s fraudulent acts entered many functions of the
company, that’s why they Andersen can manipulate the profits of
the company into putting it to his own pockets.

There are many cases that involves fraudulent acts in the

Philippines such as pyramiding and investing scam. But there is
one case in the Philippines that is asymmetric with the Enron’s
Corporation Scandal and it is the Priority Development
Assistance Fund Scam of the PDAF Scam lead by a businesswoman
named Janet Lim Napoles who just stole almost $197 million or
Php10 billion.

The PDAF scam is a political scandal involving the alleged

misuse by several members if the Congress of the Philippines of
their PDAF or pork barrel, a lump-sum discretionary fund granted
to each member of Congress for spending on priority development
projects of the Philippine government. In comparison with the
Enron’s Scandal, the money received by the politicians appeared
that they use it in for the respective projects and programs but
in reality, it’s just a paper project or program that doesn’t
appear at all. The misappropriation of assets and theft of
assets is synonymous with the Enron Scandal that makes this one
of the worst accounting scandal in the Philippines.

In conclusion, in order to build and implement code of

ethics, it will require a lot of work and process. The mission
and values of the company must always integrate ethics in its
different functions. Also, fraudulent acts may also hard to
detect and some of them may hide it from the company in order to
succeed, and the employees might not know that they are being
involved all along. The employees of Enron might be afraid to
leak the wrongdoings for their own safety and job security, but
there will be some that will be encourage to do such acts for
money. Furthermore, the acts of Arthur Andersen and his
accomplice determine how conflict of interest or corruption may
lead to such fraudulent processes and acts. Even though this
happened and internal control might be strengthened, there will
be some situations that may lead to fraudulent behavior, such as
the PDAF scam in the Philippines that makes the politicians bag
large amount of money for their own interest. That’s why Karl
Krauss said that, “Corruption is worse than prostitution. The
latter might endanger the morals of an individual, the former
invariably endangers the morals of the entire country.