Understanding how unethical business conflicts can be avoided is an important part of running a successful business. Unethical business conflicts can be the quickest downfall to any successful business, but this type of behavior is sure to lead to failure. This article will discuss how unethical business conflicts can be avoided; it will also discuss an example of unethical behavior in business and how it can cause the downfall of a business.
Enron was one of the most powerful companies in the area of communication, natural gas, and energy. The profits were outstanding, and the company thrived for many years, but fraudulent activities caused this company to lose their success (Celeste, 2007). There are many alternatives that could have changed the outcome of this situation and avoided the conflict in the first place. Enron acted unethically for profit and gain, damaging consumers, stakeholders, and the company, and this scandal changed the business practice of many companies. These actions led Enron to bankruptcy, but these actions can be avoided when understood and prepared for.
Enron created fraudulent records of their finances. These executives stole a lot of money from consumers, employees, and investors, and the company eventually went bankrupt because of these actions. Employees were punished for questioning actions and accounting. Employees were also encouraged to do whatever it takes to produce a profit. The falsification of documents and forging of partnerships in order to hide the loss of money at Enron led to the downfall of the company (Celeste, 2007). These conflicts could have been avoided by the use of ethical procedures and monitoring.
There are several alternatives to preventing and avoiding conflicts such as the Enron scandal. Creation of an ethics committee is the best recommendation for a company to avoid and prevent these unethical situations from occurring. An ethical committee would be able to monitor the decisions of a company. It would also be in charge of hiring processes and researching members of the company in order to employ people with strong ethical standards. An ethic committee would also monitor financial administrations of the company. Financial areas of a company must be run ethically in order to avoid these scandals from occurring. Enron is an example of a strong business that was run into the ground because of unethical decision making. Providing a strong ethical foundation through the use of an ethics committee is a valuable tool to any company.
References
Celeste (2007). The fall of Enron. Retrieved on August 8, 2010 from http://www.associatedcontent.com
