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 study represents an improvement in the ethics scales inventory published in a 1988 Journal of Business Ethics article. The article presents the distillation and validation process whereby the original 33 item inventory was reduced to eight items. These eight items comprise the following ethical dimensions: a moral equity dimension, a relativism dimension, and a contractualism dimension. The multidimensional ethics scale demonstrates significant predictive ability.

This paper reviews the relationship between organisational leadership, corporate governance and business ethics, and considers the implications for management. Business ethics is defined, and the causes and consequences of unethical behavior are discussed. Issues pertaining to leadership, subordinate and organisation responsibility for business ethics are considered. The changing role of business leaders and the new concept of ''corporate governance'' are examined, with an increasing importance being placed on ethical and socially responsible attitudes towards business. Organisational effectiveness and organisational efficiency, formerly (...) central issues for practising managers, with directors thinking in terms of goal achievement for their respective organisations, have now been augmented by an awareness of issues in business ethics, and a requirement for members of the corporate governance to behave in more socially responsible ways. A secondary aim of the paper is to introduce an approach which illustrates how corporate governance and management could deal with some of the moral dilemmas that they may have to face. (shrink)

The tension between external forces for better ethics in organizations, represented by legislation such as the Sarbanes–Oxley Act (SOX), and the call for internal forces represented by increased educational coverage, has never been as apparent. This study examines business school faculty attitudes about recent corporate ethics lapses, including opinions about root causes, potential solutions, and ethics coverage in their courses. In assessing root causes, faculty point to a failure of systems such as legal/professional and management (external) and declining personal values (...) (internal). We also found that faculty recommend external forces as a remedy more often than increased ethics educational coverage; we contextualize this finding with recent ethics education literature. We conclude by proposing that neither legislation nor ethics education alone are complete when addressing widespread unethical corporate acts and offer a multi-faceted approach to ethics educational opportunities. (shrink)

The authors identify the challenge of holding contemporary business leaders accountable for enhancing the intangible strategic asset of integrity capacity in organizations. After defining integrity capacity and framing it as part of a strategic resource model of sustainable global competitive advantage, the stakeholder costs of integrity capacity neglect are delineated. To address this neglect issue, the authors focus on the cultivation of judgment integrity to handle behavioral, moral and hypothesized economic complexities as key dimensions of integrity capacity. Finally, the authors (...) recommend two leadership practices to build competence in business leaders to enhance integrity capacity as an organizational strategic asset. (shrink)

After years of debate over the importance of ethical conduct in organizations, the federal government has decided to institutionalize ethics as a buffer to prevent legal violations in organizations. The key requirements of the Federal Sentencing Guidelines (FSG) are outlined, and suggested actions managers should adopt to improve ethical compliance are presented. An effective compliance program is more a process and commitment than a specific blueprint for conduct. The organization has the responsibility to create an organizational climate to reduce misconduct. (...) The adoption of a FSG compliance program has the potential to substantially lessen organizational penalties if there is due diligence to prevent misconduct. Federal courts determine the effectiveness of an FSG program after a violation occurs. (shrink)

Behaving ethically depends on the ability to recognize that ethical issues exist, to see from an ethical point of view. This ability to see and respond ethically may be related more to attributes of corporate culture than to attributes of individual employees. Efforts to increase ethical standards and decrease pressure to behave unethically should therefore concentrate on the organization and its culture. The purpose of this paper is to discuss how total quality (TQ) techniques can facilitate the development of a (...) cooperative corporate culture that promotes and encourages ethical behavior throughout an organization. (shrink)

This paper explores the financial reporting scandals of the past decade and the resulting U.S. legislative attempts to impose ethical behavior and control the incidence of new reporting problems via the Sarbanes-Oxley legislation. We begin with a brief historical perspective followed by assertions of ethical consequences of legislation with discussions of key recent corporate scandals, the motives for the frauds, and the consequences. Ethics related provisions of the Sarbanes-Oxley Act are discussed with the potential impact of the legislation on the (...) likelihood of similar future frauds and accompanying prognosis for future corporate ethical behavior. (shrink)

This paper discusses corporate governance issues from a compliance viewpoint. It makes a distinction between legal and ethical compliance mechanisms and shows that the former has clearly proven to be inadequate as it lacks the moral firepower to restore confidence and the ability to build trust. The concepts of freedom of indifference and freedom for excellence provide a theoretical basis for explaining why legal compliance mechanisms are insufficient in dealing with fraudulent practices and may not be addressing the real and (...) fundamental issues that inspire ethical behavior. The tendency to overemphasize legal compliance mechanisms may result in an attempt to substitute accountability for responsibility and may also result in an attempt to legislate morality which consequently leads to legal absolutism. The current environment of failures of corporate responsibility are not only failures of legal compliance, but more fundamentally failures to do the right (ethical) thing. (shrink)