Ethics Essay Example | Topics and Well Written Essays - 1250 words - 6

Ethics - Essay Example It is observed that an organization with a diverse workforce witnesses various ethical dilemmas and issues arising out of ethical values. This happens because the interest of the organizational and personal ethics is different from each other giving rise to potential conflict among employees and managers. Ethics can be termed as a moral principles or set of standard followed by an individual. Business ethics can be termed as a set of moral values and principles that help the business managers to arrive at unified conclusion. The impact of business ethics on managerial decision making is huge and has the potentiality of changing the course of decision making. It is observed that the influence of legal laws on the managerial decision making is huge and can have considerable amount of influence on the personal lives of an individual as well. Since, business activity is also regarded as a human activity the evaluation of business ethics would be done in a similar fashion. The importance of business ethics, personal ethics and legal influences on ethics would be covered in this study by the author. Situational Analysis The Enron Scandal In the year 2001 Enron Scandal had filed for bankruptcy and the collapse of the company was regarded as the biggest audit failure of all times. This occurred when the shareholders of the company had filed a suit against the company after the company’ share dropped from a double digit number to less than $1. The root cause of the sudden drop in the share price of the company confused the shareholders compelling them to file a suit against the company. It was observed that lack of systematic and clear organizational structure was the root cause behind the collapse of the company. The company failed to comply with business and legal ethical standards and there was a lack of moral standard among the employees of the organization. Outcome & Result The failure to provide a valid reason for the collapse of the Enron Corporation arous ed curiosity among investors and sparked controversy among competitors and investment banking analyst. The company management tried to solace the investors by claiming that it would hold an IPO separately for its internet department but ultimately the company filed for bankruptcy (Lashinsky, 2001). It was noted that various employees and managers were involved behind the collapse of the company. Lack of implementation of an ethical and moral standard by the human resource department can pave the path for downfall of the company. Lack of financial, sustainability accounting disclosure and lack of proper organizational climate within the company were solely responsible for the scandalous act. The US government had immediately enacted the Sarbanes-Oxley Act in response to this particular incident in the year 2002 which aimed at primarily promoting transparent and accurate auditing among public accounting companies (Peavler, 2013).This federal law has set new accounting standards for US A public accounting companies, corporate directors and corporate management to enhance the corporate practices. Practical Application of Ethical Theories & Morals The above mentioned incident is a conglomeration of the egoism theory; psychological and enlightened egoism. Enlightened egoism focuses on the fact that individuals should treat each