Ethical Dilemmas

Introduction

Proverbs 11:3 in the Bible says “The integrity of the upright guides them, but the unfaithful are destroyed by their duplicity.” Integrity is a part of leadership and one is unable to be a true leader without it. A person of integrity will act out of moral principle and not expediency. That person will do what is right even if it means the loss of a job or a client (Mintz & Morris, 2011). Authenticity is the idea of simply “acting on one’s values” or “being true to oneself” (Freeman & Auster, 2011).The focus of this paper is to analyze the decisions of the key players in Enron. This ethical case study has been visited time and time again, but we are going to discuss the integrity and authenticity as part of their character in the leadership role that they played. We are also going to discuss the ethical dilemmas that individuals in management face on a day to day basis.

Ethical Dilemmas

There were many key players in the Enron ethical dilemma and financial scandal. We will give a very short version of the dilemma and then speak on the ultimate decisions made. Enron’s debt load was so high that is forced the company into financing projects with borrowings that were kept off the balance sheet (Mintz & Morris, 2011). This led to the special purpose entities to hide debt. This was the ethical slippery slope that once was started led the company downhill. Once the company developed an appetite for establishing for the special purpose entities and keeping these transactions off of their financial statements, the company became more and more addicted to the cash provided through the special purpose entities (Mintz & Morris, 2011). As was mentioned before, Enron had started to slide down the ethical slippery slope and there was no turning back; or was there?

Certainly, ethical dilemmas are not always black and white. And the situations that can lead to hard choices can be as complex as the options themselves. Some companies therefore struggle with how to manage and measure ethics and particularly in cases where they have worldwide offices that operate in diverse cultures. Those decisions have a direct bearing on their public identities and will affect their share prices (Silverstein, 2013). In Enron’s case they needed the share prices to not plummet and made their decisions in order to not have this happen.

Managers face these types of dilemmas all the time. Enron wasn’t special. When there is a chance for monetary gain, greed steps in. The other ethical dilemma I will speak on is the opportunity for managers to inflate income for monetary bonus purposes. These opportunities arise when production exceeds sales and occurs as a result of the differences between absorption costing and variable costing. The manager in the case was asked to use absorption costing by his boss who seemed to think