Enron’s culture has contributed a lot to the moral scandal. Enron is a demanding and condescending company that emphasizes competition and financial goals. For example, it has a rating system that requires 20% of employees to be rated below the requirements each year and then encouraged to leave Enron (Jennings, 2009, p. 288). Although Enron hopes that this rating system can encourage employees to work hard, in fact, the system will cause more damage to Enron than welfare.
Firstly, Enron’s competitive environment and rigorous performance evaluation standards have led to a culture of deception. Since employees were nervous about losing their jobs, they only focused on their own. They ignore ethical standards and focus only on achieving their financial goals. After some employees start deceiving their work, the only way to beat them is to deceive more. Gradually, no one is ashamed of cheating because they have no other choice, and all the colleagues around them are cheating. This creates a culture of deception. Employees are measured by deception. In such an environment, people who never cheat are considered strange. For example, Margaret Ceconi, a former employee of Enron Energy Service, wrote a memo to record the truth about Enron’s accounting situation. Later, she was questioned by employee morale (Jennings, 2009, p. 290).
Secondly, the only measure of Enron’s success is money. Enron emphasizes individual heroism and undermines the cornerstone of the company’s existence–team spirit, making Enron’s employees more competitive, not cooperative. This competitive environment contributed to the covering of the errors and cheating because employees tended to be uncooperative and seldom communicated with each other. Employees are reluctant to ask questions because questions are considered humiliating. In addition, they are also reluctant to share resources and information because they compete with each other. So, in Enron, no one asks questions and no one wants to answer questions. Because of this kind of work environment, there are very few employees in Enron who really understand their work. As a result, they just tried to hide the mistakes and make their work look good. In addition, they ignore other people’s mistakes and deception. Even if they suspect another person’s work, they won’t say anything. Because they think that if other people are actually not wrong, then the person who raised the problem will laugh at it. Therefore, Enron’s employees are all shut up.
In addition, Enron culture overemphasizes financial goals. The core culture of Enron is profit, even greed. In Enron, the goal pursued by operators is “high profit, high stock price, high growth”. “Fortune” magazine writes that it is precisely because Enron executives have established a culture centered on profitable growth, managers have great risk motives, and Enron pursues only one goal. That is profit. In such companies, the ethical standards are just decorative facades. No one is willing to comply with ethical regulations. For example, the conflict of interest policy was abandoned, allowing Enron officials to serve as officials of non-book entities.
Fourth, Enron tried to keep those involved in it silent. Employees discouraged doubts about the company’s financial situation and executive decisions. In the years of fraud in the financial statements, Enron hurt people inside and outside, who suspected Enron’s financial situation. For example, John Olson advised his clients not to invest in Enron because of doubts about Enron’s cash flow and earning power, so he was fired. This is another example. A former staff member named Clayton was fired in November 2001 because he posted a comment on “exaggerated profits” in the employee chat room (Jennings, 2009, p. 291). As a result, Enron put a lot of pressure on employees to express their true views on the company’s financial situation. Employees must first ensure their work and ignore unethical or illegal things happened within the company, even if they know it was wrong.
This pressure created a good environment for the Enron scandal. At Enron, executives and most employees are not doing well in the face of conflicts of interest. They are greedy and selfish.
