Business Ethics : Enron

Enron Corporation based in Houston, Texas was an energy, commodities and services company. Enron was once one of the world’s leading company in electricity, natural gas, communications, and pulp and paper. Enron brought in almost $101 billion in 2001 as claimed revenues, and was America’s Most Innovative Company for six consecutive years. 

Being one of the biggest companies in those years, there were a lot of investors who put a lot of money into the stocks. In 2001 Enron filed for bankruptcy after its shares plummeted to less than $1 from $90/share. Unethical business practice Enron followed were the cause to this catastrophe. After an investigation on the company, the US Securities and Exchange Commission found out that there were poor financial reports, which the company used to hide billions in debt from failed deals and projects. These type of unethical business practices, cause companies which had the potential to rise and become big into nothing. Unethical business practice can be something so small but can cause devastating consequences.

Business Ethics: Nestle

Nestle is one of the world’s leading company in nutrition, food and wellness. Nestles mission state is “Good Food, Good Life” they believe in providing consumers with the best food, most nutritious choices in a wide range of food and beverages from morning to night. The company’s business strategy states on its site “Nestle believes that it is only possible to create long-term sustainable value for our shareholders if our behavior, strategies and operations also create value for the communities where we operate, for our business partners and of course, for our consumers”.

A company who believes in creating value in their communities also had suppliers who violate the human rights acts.  This is not creating value at all for the communities where they operate at. This is highly unethical for a business to do because they contradict their business strategy. These unethical practices hurt a company in many ways, such as future endeavors, drop of shares, etc.  This is an act of unethical business practices that happens around the world in companies no matter their size.

Sources

http://www.phdinparenting.com/2010/08/02/nestle/#.TzxHsfkrWRx

http://news.bbc.co.uk/2/hi/8277481.stm

http://www.stopthetraffik.org/news/press/nestle.aspx

http://www.nestle.com/CSV/CreatingSharedValueAtNestle/Pages/CreatingSharedValue.aspx

How can companies succeed with good business ethics

Having strong business ethics and morality is one way for a company to succeed. Business ethics is defined as the moral values like respect, honesty, responsibility, impartiality and simply the workers behavior at the workplace. Individuals within the organization whom understand right and wrong behavior and are able to choose the appropriate decision have good business ethics. There are three major areas which an individual can judge if a business has strong business ethics: company’s public image, investment/investors, and partnerships. Public image is usually a direct result of a company’s behavior in how they treat their employees, communities and even their environmental policy. Business ethics is also the responsibility a company has for its investors. Companies with strong reputations in the field of ethical business behavior tend to attract more investments. Finally companies which have good partners are usually due to its strong ethical behavior. No one would want to partner up with a company who will bring them down with unethical behaviors. Conclusively the overall view of a company is determined by their public image, investment/investors and their partnerships.


Sources
1.http://www.streetdirectory.com/travel_guide/161760/corporate_matters/why_business_ethics_are_important_for_a_company_and_its_success.html
2.http://www.brighthub.com/office/entrepreneurs/articles/115557.aspx
3.http://www.acceptedpapers.com/free-term-papers/ethics-and-morality-in-business-practices.html