Ethical Issues with Enron and WorldCom
The reason for this paper is to compare the Ethical issues and the consequences that may fall from the wrong decisions. The two companies’ I will be looking at are Enron and Worldcom and the ethical decisions they made that made them fail. ”After all, Enron was touted as one of America's greatest, forward-thinking corporations. When it fell apart, low-level Enron employees with most of their savings in Enron stock were hurt the worst and are likely to recover very little. But millions of others lost retirement savings from Enron stocks in mutual funds or pension plans. Even before Enron, according to the Employee Benefits Research Institute, 1.5 million Americans over 60 lost $10.5 billion in their tax-advantaged, employer sponsored 401(k) retirement accounts during the stock market drop in 2000.” (Moberg, 2002)
WorldCom:”In 1998, the telecommunications industry began to slow down and WorldCom's stock was declining. CEO Bernard Ebbers came under increasing pressure from banks to cover margin calls on his WorldCom stock that was used to finance his other businesses endeavors (timber, yachting, etc.). The company's profitability took another hit when it was forced to abandon its proposed merger with Sprint in late 2000. During 2001, Ebbers persuaded WorldCom's board of directors to provide him corporate loans and guarantees totaling more than $400 million. Ebbers wanted to cover the margin calls, but this strategy ultimately failed and Ebbers was ousted as CEO in April 2002.” (JJ, 2007)
While the Conventional wisdom in the early and late '90s was that if you put your money into stocks and bonds, you could get rich and retire early. However after the stock bubble burst and Enron collapsed, the road to early retirement was looking a lot riskier. Yet our political leaders have given no indication they have learned anything.
In this paper I will be talking about...