“Every business lies about its ethics” there are many reasons reasons why companies do so. For example Enron was once a successful company but down the roads they suffered a horrible loss that later on became one of the biggest scandals of wall street history. Enron was at their peak of success but what really got them from a little of $20 to over $90 of stock share was their lack of ethics. Enron was a fast growing American energy, commodities, and services company based in Houston, Texas. Before this scandal was beginning the company was worth a decent amount of 13.3 billon dollars in 1996 but the ethic lies didn’t start until 1998 when Fastow was promoted. In 2000, the company skyrocketed to $100.8 billion dollars which is highly impossible for a company to be making in just around 4 years.
Enron was founded in 1985 but then in 2001 they were finally caught by the Securities and Exchange Commission (SEC) for knowingly manipulating accounting rules and masking the enormous losses and liabilities of the company. When a company does not establish rules of ethics that company like Enron will no more be in business. If Enron were to play by the rules their company would have still been in business and so would have Arthur Andersen. Enron lied about being ethical we could tell by the profits that Enron was making within a small span of time. Once the company Enron knew that they had made committed too much fraud they tried to cover it up with bringing Arthur Andersen, one of the big five accounting firms in the world. Enron convinced Arthur Andersen to money launder their money but since their profit margins were too high the SEC became very suspicious of this amount of money Enron was profiting. In the business world no one is forced into committing these crimes; Arthur Andersen had the choice to decline the offer from Enron to help them with money laundering but because they had no ethics they joined alliances with Enron. Once Enron fell apart they brought Arthur Andersen down too. Enron went bankrupt because of all the dues and imprisonment of the CEOs and Arthur Andersen was destroyed with the bad reputation that no company wanted them to do check their books.
Why the readers might ask is Enron so important, well it is important to know that businesses lie about ethics especially a well known company that was located on Wall Street and was one of a few companies that Forbes magazine could brag to the United States. Sure there are other companies that have committed an unrightfully act of ethics for instance we have Wells Fargo & company which is an American International banking and financial services holding company located around the whole United States. Recently about one year ago Wells Fargo had a big scandal for phony accounts. As a well trusted bank that many people thought had ethical employees was not true. CNN covered the story saying that 5,300 Wells Fargo employees fired over 2 million phony accounts. These employees secretly opened unauthorized accounts under many of their customers to meet their sales target and receive bonuses. Wells Fargo CEO Timothy Sloan knew that these phony accounts were being made but because of his business ethics he did not stop his employees. I understand that Wells Fargo needs to make profits and meet their margins but having an unethical way of making money its just heartbreaking that people don’t care about others and just themselves. Tim Sloan is the one to blame for all this commotion; he even got rich off of these 3.5 million phony accounts that would charge fees to clients for having another open but unknown account. Elizabeth Warren suggested he’d be fired but instead congress let him remain where he is but gave him a big fine of $185 million dollars along with $5 million refund to customers.
Corporations find ethics to be a drain on profits; but every corporation claims to promote strong business ethics. Many businesses have rules of Corporate Social Responsibility that states we must be committed employers, be an outstanding partner to customers, be an environmentally friendly player and service civil society. These are the four pillars every business must stand by but for the most part corporations have the rules to promote but will never follow through because profits don’t come as fluidity like being unethical. Businesses promote that they are truly ethical but how can we believe and trust big time companies when their fraud crime scandals were announced to the business world. Forbes releases a list of most ethical businesses every year which does help a customer if we want the best service without any surprise fees. Most companies that are usually more trustworthy are those that are small businesses because what they want is to make their customers satisfied with the little they have to offer. If we were to trust a company I’d say it would have to be a small one because all the big companies get away with almost anything just like Enron did for 12 years. My point proven, the bigger the companies are the the more unethical they become. Big companies have so many clients that if they lose one they still have others to attend and more so other companies will keep coming to make business relations with other big and superior companies.
If we take a look inside small businesses we tend to see exactly what they provide and have to offer unlike other big businesses that have many hidden fees and tactics. According to a journal by Heledd Jenkins she illustrated and discovered that given the significant scale of small business in nearly every economy, their aggregate achievements have a major effect worldwide. Researchers are now also recognizing the importance of business ethics and social responsibility as they apply to small firms. Take a look at Hasbro Inc, its a small manufacturing toy business that ensures great quality products for younger children and takes ethics very serious because they would rather be worried about the child’s safety than the gross income they are receiving and thats why Hasbro Inc is one of the companies to be selected in Forbes article “Most Ethical Companies 2017”
That’s exactly what happened to Wells Fargo customers nationwide. “5,300 Wells Fargo Employees Fired over 2 Million Phony Accounts.” CNNMoney, Cable News Network.
Kauflin, Jeff. “The World’s Most Ethical Companies 2017.” Forbes, Forbes Magazine, 14 Mar. 2017.
Ackman, Dan. “Enron The Incredible.” Forbes. Forbes Magazine, 06 June 2013.
Jenkins, Heledd. “Small Business Champions for Corporate Social Responsibility.“SpringerLink. Kluwer Academic Publishers, 02 Sept. 2006. Web. 03