The Enron scandal and the ethical question it raised Houston Natural Gas co. and InterNorth Inc. After this merger, the CEO of Houston Natural Gas hastily rebranded the Enron company into an energy trader and supplier. The Enron company was initially successful, but suffered a rather drastic and rapid fall. In early January 2002, this company's stock dropped significantly from nearly $90.75 to $0.67. This was very difficult for the public to understand, especially since the company was awarded the most innovative company in America. This society was run by corrupt parties which brought about its ruin. Little ethics and moral reasoning were demonstrated in the management of this company, which inevitably led to its downfall (Investopedia, 2016). Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay There are several ways in which the CEO of this company hid important information from other employees and shareholders. The main way this was done was by using a technique called mark-to-market accounting. This mechanism is used when trading securities, the measurement of a security is based on its market value, rather than its book value. This is very beneficial for stocks, but bad for businesses. Enron used these methods by creating certain assets, such as a new power plant. Then the company would have immediately allocated the expected profit on its books, without even generating a cent. If there was a loss by the company, the generated assets were sent to an unknown book and were not reported to anyone. This strategy certainly allowed Enron Corporation to suffer losses without damaging the company's reputation. However, these techniques were detrimental to the company once they caught wind. What is in the darkness will always come to light (Investopia,2016). There are several ethical principles that have been ignored during these scandals. Which would inevitably damage not only the company but also consumer confidence. These scandals limited the trust consumers placed in big companies and were one of the worst white-collar crimes of all time. These break social contract theory for several reasons. One reason this is unethical is because it depended on lies and withholding information. According to social contract theory, it is stated that these sets of rules for business procedures include the idea that they would be set based on people's preferences. Most people would not agree with the withholding of this information. Although modern companies are built on similar foundations, this behavior is not acceptable. There are certain ethical standards and obligations that companies should maintain. These are considered corporate social responsibilities, and while they can be defined in different ways, there are some circumstances that are always labeled as improper business moves. And this would definitely be one of them. I say this because it is not possible to hide such information from people, other companies were suffering losses that were hidden from this one. Many people have lost money and trust due to these scandals that occurred (Investopia2016). According to Wxiaom: “ First, Enron's competitive environments and rigorous performance evaluation standards caused a culture of deception. Because the employees were nervous:.

Topic > The Enron scandal and the ethical question it raised Houston Natural Gas co. and InterNorth Inc. After this merger, the CEO of Houston Natural Gas hastily rebranded the Enron company into an energy trader and supplier. The Enron company was initially successful, but suffered a rather drastic and rapid fall. In early January 2002, this company's stock dropped significantly from nearly $90.75 to $0.67. This was very difficult for the public to understand, especially since the company was awarded the most innovative company in America. This society was run by corrupt parties which brought about its ruin. Little ethics and moral reasoning were demonstrated in the management of this company, which inevitably led to its downfall (Investopedia, 2016). Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay There are several ways in which the CEO of this company hid important information from other employees and shareholders. The main way this was done was by using a technique called mark-to-market accounting. This mechanism is used when trading securities, the measurement of a security is based on its market value, rather than its book value. This is very beneficial for stocks, but bad for businesses. Enron used these methods by creating certain assets, such as a new power plant. Then the company would have immediately allocated the expected profit on its books, without even generating a cent. If there was a loss by the company, the generated assets were sent to an unknown book and were not reported to anyone. This strategy certainly allowed Enron Corporation to suffer losses without damaging the company's reputation. However, these techniques were detrimental to the company once they caught wind. What is in the darkness will always come to light (Investopia,2016). There are several ethical principles that have been ignored during these scandals. Which would inevitably damage not only the company but also consumer confidence. These scandals limited the trust consumers placed in big companies and were one of the worst white-collar crimes of all time. These break social contract theory for several reasons. One reason this is unethical is because it depended on lies and withholding information. According to social contract theory, it is stated that these sets of rules for business procedures include the idea that they would be set based on people's preferences. Most people would not agree with the withholding of this information. Although modern companies are built on similar foundations, this behavior is not acceptable. There are certain ethical standards and obligations that companies should maintain. These are considered corporate social responsibilities, and while they can be defined in different ways, there are some circumstances that are always labeled as improper business moves. And this would definitely be one of them. I say this because it is not possible to hide such information from people, other companies were suffering losses that were hidden from this one. Many people have lost money and trust due to these scandals that occurred (Investopia2016). According to Wxiaom: “ First, Enron's competitive environments and rigorous performance evaluation standards caused a culture of deception. Because the employees were nervous:.