December 12, 2011
Enron was considered to be one of the largest scandals in American history. Americans were shock to find out about the unethical practices that were carried on by leaders and employees of the organization. Enron used many methods of trickery to appear more lucrative than the company really was. While Enron’s stock ascended so did its debt. Individuals within the company decided that they were going to trade millions of dollars in the organization’s stock. When the company’s bankruptcy was discovered, the organization’s stock decreased tremendously. This was a demoralizing hit to investors and also the ...view middle of the document...
With Enron, unconsolidated partnered companies for economic purposes were disregarded by executives because it seems as if it was a traditional business practice. Therefore, the executives permitted the company to exclude things from the balance sheet which eventually lead to Enron’s collapse. The theory of social proof is similar to this because it shows that individuals rely on people around them to determine the proper behavior that they should present. While Enron did have a code of ethics in place for their employees to follow, the company and its employees did not abide by any of the rules. Employees used the behavioral indications from their executives to form their own decisions not to report the unethical acts within company.
“Motivation is not simply working hard but it also reflects your view of your own abilities” (Robbins & Judge, 2011). The organization’s motivation structure prone employees within the company to have immoral behavior. Enron altered their motivation structure in order to meet the company’s goals. The company mostly hired...