Skip to main content
SpringerLink
Log in

Enron Ethics (Or: Culture Matters More than Codes)

  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

Abstract

This paper describes and discusses the Enron Corporation debacle. The paper presents the business ethics background and leadership mechanisms affecting Enron's collapse and eventual bankruptcy. Through a systematic analysis of the organizational culture at Enron (following Schein's frame of reference) the paper demonstrates how the company's culture had profound effects on the ethics of its employees.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  • ABC News-World News Sunday: 2002, 'Profile: The Shadowy World of Enron's Corporate Culture' (January 27).

  • Bartlett, C. A. and M. Glinska: 2001, 'Enron's Transformation: From Gas Pipeline to New Economy Powerhouse' (Harvard Business School Press, Boston, MA).

    Google Scholar 

  • Brinkmann, J. and K. Ims: 2003, 'Good Intentions Aside (Drafting a Functionalist Look at Codes of Ethics)', forthcoming Summer 2003 in Business Ethics: A European Review.

  • Broughton, P. D.: 2002, 'Enron Cocktail of Cash, Sex and Fast Living', News. Telegraph.co.uk (On-line journal) (February 13).

  • Brown, K. and H. Sender: 2002, Enron's Board Fires Arthur Andersen: Questions Arise About Auditor's Actions', The Wall Street Journal [Online]. Available: http://wsjclassroomedition.com/tj 011802 enron.htm.

  • Carroll, A. B. and M. D. Meeks: 1999, 'Models of Management Morality: European Applications and Implications', Business Ethics: A European Review 8, 108–116.

    Google Scholar 

  • Cohan, J. A.: 2002, 'I Didn't Know and I was Only Doing My Job. Has Corporate Governance Careened Out of Control? A Case Study of Enron's Information Myopia', Journal of Business Ethics 40, 275–299.

    Google Scholar 

  • Daily Press: 2002, 'Troubles Widely Known, Exec Says' (February 15), p. A1.

  • Dowd, M.: 2002, 'Enron, Hollywood Version', The Roanoke Times (February 10), 1.

  • Eavis, P.: 2001, 'Enron Reaps What Its Cowboy Culture Sowed', TheStreet.com [On-line]. Available: http://www.thestreet.com/markets/detox/10004675.html.

  • Eichenwald, K.: 2002, 'Report Lays Out Troubles At Enron: Internal Investigation Finds Profits Overstated To Executive's Enrichment', The New York Times [On-line]. Available: http://www.austin360.com/aas/business/020302/3enrong.html.

  • 'Explaining the Enron Bankruptcy': 2002, CNN.com (January 12). Available: http://www.cnn.com.html.

  • Frey, J. and H. Rosin: 2002, 'Enron's Green Acres', The Washington Post (February 25), 1.

  • Gruley, B. and R. Smith: 2002, 'Anatomy of a Fall: Keys to Success Left Kenneth Lay Open to Disaster', The Wall Street Journal (April 26), pp. A1, A5.

  • Hamburger, T.: 2002, 'Watkins Tells of 'Arrogant' Culture; Enron Stifled Staff Whistle-Blowing', The Wall Street Journal (February 15), pp. A3, C1.

  • Hansell, G.: 2002, 'The Fall of Enron Pressure Cooker Finally Exploded', The Houston Chronicle [Online]. Available: http://www.russreyn.com/news/ newsitem.asp?news=235.

  • Janis, I.: 1989, Critical Decisions: Leadership in Policy Making and Crisis Management (Free Press, New York).

    Google Scholar 

  • Josephson, M.: 1999, 'Character: Linchpin of Leadership', Executive Excellence 16(8), 13–14.

    Google Scholar 

  • Landers, J.: 2002, 'Enron Exec' Silence Is No Shock Testimony Would Have Followed Hard-hitting Report On Activities. The Dallas Morning News [On-line], Available: http://www.kmsb.com/business/news/506152 enron.html.

  • Lardner, J.: 2002, 'Why Should Anyone Believe You? What Ruined Enron Wasn't Just Accounting. It Was a Culture that Valued Appealing Lies Over Inconvenient Truths. Are You Sure Your Company Enron Ethics (Or: Culture Matters More than Codes) 255 Is All That Different?' Business 2.0 [On-line]. Available: http://www.business2.com/articles/mag/0/1640.37748.FF.html.

  • Larimer, L. V.: 1997, 'Reflections on Ethics and Integrity', HRFocus (April), 5.

  • Lewis, M.: 1989, Liar's Poker (Norton, New York).

    Google Scholar 

  • McClean, B., J. Sung Revell and A. Helyar: 2001, 'Why Enron went Bust: Start with Arrogance. Add Greed, Deceit, and Financial Chicanery. What Do You Get? A Company that Wasn't What it was Cracked Up to Be', Business 2.0 [On-line]. Available: http://www.business2.com/articles/mag/print/0.1643.36124.FF.html.

  • Moorehead, G. and J. R. Montanari: 1986. 'An Empirical Investigation of the Groupthink Phenomenon', Human Relations 39, 339–410.

    Google Scholar 

  • New York Times: 2002, 'Profits At Enron Energy Services', [On-line] (February 14). Available: http://www.nytimes.com/learning/students/pop/articles.

  • Pearce, J. A., II, T. R. Kramer and D. K. Robbins: 1997, 'Effects of Managers' Entrepreneurial Behavior on Subordinates', Journal of Business Venturing 12, 147–160.

    Google Scholar 

  • Petrick, J. A. and J. F. Quinn: 2002, 'Management Integrity Capacity Neglect and Enron: Stakeholder Damages and Remedies', paper presented at the 9th International Conference Promoting Business Ethics, Niagara University, Niagara Falls, NY, Oct 23–25, 2002.

    Google Scholar 

  • Schein, E.: 1985, Organizational Culture and Leadership (Jossey-Bass, San Francisco, CA).

    Google Scholar 

  • Schwartz, J.: 2002, 'Darth Vader. Machiavelli. Skilling Set Intense Pace', The New York Times (February 7), 1–2.

  • Sims, R. R.: 1992, 'The Challenge to Unethical Behavior in Organizations', Journal of Business Ethics 11, 505–513.

    Google Scholar 

  • Sims, R. R.: 2002, 'Leadership, Organizational Culture and Ethics', Teaching Note (Graduate School of Business, College of William and Mary, Williamsburg, VA).

    Google Scholar 

  • Sims, R. R.: 2000, 'Changing an Organization's Culture Under New Leadership', Journal of Business Ethics 25, 65–78.

    Google Scholar 

  • Sims, R. R. and J. Brinkmann: 2002, 'Leaders as Moral Role Models: The Case of John Gutfreund at Salomon Brothers', Journal of Business Ethics 35, 327–339.

    Google Scholar 

  • Stephens, J. and P. Behr: 2002, 'Enron's Culture Fed Its Demise: Groupthink Promoted Foolhardy Risks', Washington Post (January 27), A01.

  • Stern, G.: 1992, 'Audit Report Shows How Far Chambers Would Go For Profits', The Wall Street Journal (October 12), A1.

  • Tonge A., L. Greer and A. Lawton: 2003, 'The Enron Story: You Can Fool Some of the People Some of the Time...', Business Ethics: A European Review 12, 4–22.

    Google Scholar 

  • Tracinski, R.: 2002, 'Enron Ethics', Capitalism Magazine [On-line] (January 28). Available: http://www.capitalismagazine.com/2002/january/rwt.enron.htm.

  • Trevino, L. K., L. P. Hartman and M. Brown: 2000, 'Moral Person and Moral Manager: How Executives Develop a Reputation for Ethical Leadership', California Management Review 42(4), 124–142.

    Google Scholar 

  • Trevino, L. K. and K. A. Nelson: 1995, Managing Business Ethics: Straight Talk about How to Do It Right (John Wiley & Sons, New York).

    Google Scholar 

  • U.S. Congressional Hearing: 2002 (February 6), Washington, DC.

  • Vogt, A. J.: 2002, 'Interview with Larry Bossidy: The Way It Is', Across the Board (May/June), 31–37.

  • Weaver, G. R., L. K. Trevino and P. L. Cochran: 1999, 'Corporate Ethics Programs as Control Systems: Influences of Executive Commitment and Environmental Factors', Academy of Management Journal 42, 41–57.

    Google Scholar 

  • Willet, B. and T. Always: 2002, 'For Investors, X Marks the Spot, Whether They Choose To See It Or Not', FallStreet.com [On-line]. Available: http://www/fallstreet.com/Spotlight/jan2502/htm.

  • Wolfe, D.: 1988, 'Is There Integrity in the Bottomline: Managing Obstacles to Executive Integrity', in S. Srivastva (ed.), Executive Integrity: The Search for High Human Values in Organizational Life (Jossey-Bass, San Francisco), pp. 140–171.

    Google Scholar 

  • Zellner, W.: 2002, 'Jeff Skilling: Enron's Missing Man', Business Week Online (February 11).

Download references

Author information

Authors and Affiliations

  1. Graduate School of Business, College of William and Mary, Williamsburg, VA, 23187-8795, U.S.A

    Ronald R. Sims

  2. Norwegian School of Management BI, PO Box 4676 Sofienberg, N0506, Oslo, Norway

    Johannes Brinkmann

Authors
  1. Ronald R. Sims
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Johannes Brinkmann
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

About this article

Cite this article

Sims, R.R., Brinkmann, J. Enron Ethics (Or: Culture Matters More than Codes). Journal of Business Ethics 45, 243–256 (2003). https://doi.org/10.1023/A:1024194519384

Download citation

  • Issue Date:

  • DOI: https://doi.org/10.1023/A:1024194519384

Keywords

Search

Navigation