Organizational Ethics: Key Considerations for Decision Making - Essay Sample

Paper Type:  Essay
Pages:  4
Wordcount:  956 Words
Date:  2023-01-20


In any organization, ethical decision making is very crucial. This is because through consideration of ethics before decisions are made, an organization will through its stakeholders avoid negative impacts on the customers or other organizations they serve through their daily business operations. Also, ethical decision making helps an organization to be aware of the risks it may be exposed to if it does not make decisions in a well-organized manner (Tsalikis & Peralta, 2019). Most importantly, it helps the organization to carry out its daily operations and or transactions in a way that cares and protects the rights of the customers and thus, in turn, avoid failure of the business in a diverse number of ways.

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For the cases of the listed three companies which are Enron, WorldCom and Tyco, there are ethical business violations that took place in the companies and brought about harsh consequences afterwards. Each company among the three had its specific ethical business violation which it was involved in, and there are certain consequences which the companies received as a result of the ethical violations. To begin with Enron, it had been a big company that was trusted by so many people from the way it operated and how it made profits. It was among the seven largest and well-trusted companies in America (CULPAN & TRUSSEL, 2005). However, there came a time when the CEO of the company changed the method which the company used in its operation to the market to market (MTM) method and this was the beginning of the failure of the company. A lot of people had invested in this company by buying shares, and others put their savings with this big company as nothing could convince them that the big company would fail.

The ethical business violation that took place in the case of Enron was a fraud, and the money that was stored in the company was all lost and the investors of the company through shares, savings were left helpless.

Turning to the other company known by the name Tyco International, it was a good company that operated well and made huge profits with the early leadership. However, things began to change when the new CEO Dennis Kozlowski, took place as the chief executive officer. The company was said to be producing the wrong financial accounts, and thus there was no transparency in the financial transactions ("Tyco Corporate Scandal of 2002 (Ethics Case Analysis) - Padmore Institute", 2019). This means that the accounts of the company were not kept in the right order and as a result, a lot of cash was looted and the leaders denied the fact that there were problems with the accounts and some cash had been lost. The issue was that the leaders had embezzled funds from the company for their benefits at the expense of all the other investors who had their savings in this company.

The other company is WorldCom and is listed among the main companies which were involved in the ethical business violations. For WorldCom, the ethical violation which it was associated with was the financial irregularities of a total of $11 billion (Tran, 2019). This caused a serious failure and brought about a lot of issues in the management of the company as the financial irregularities were so much associated with the leaders and executives themselves.

Impacts of Ethical Violations

There are so many consequences that came up as a result of the ethical violations that were associated with these three companies Tyco, WorldCom and Enron. It is important to note that in all these three companies, the main issue was the mishandling and loss of funds from savings (Tsalikis & Peralta, 2019). This saw many of the leaders of these companies from CEOs, managers and the other stakeholders in jail and under serious law punishments.

On the other hand, these violations affected the customers of these companies in very negative ways. For example, in the case of Enron, there were so many investors and retired people who had kept their savings with the company, and when the finances were looted, they all lost these savings ("The Enron Scandal & Ethics", 2019). This has seen many of the people lead miserable lives due to the loss of all the savings they had in these companies. It has also affected other organizations that depended on the products from these companies. This has taken place through the failure of the companies and thus making it difficult for the other organizations to access the services from these companies. As a result of this, the operations of the other organizations have been made difficult, and thus the profitability of most of them has gone down from the time the ethical violations of their collaborating companies took place up to the present date.


In conclusion, there are so many negative vices that are associated with the ethical business violations, especially in connection to the finances of the business. It is important for all organisations to ensure that they have an ethical decision making to avoid the negative impacts of involving themselves in unnecessary dealings while at the same time protect the rights of all the customers and or people around them.


CULPAN, R., & TRUSSEL, J., (2005). Applying the Agency and Stakeholder Theories to the Enron Debacle: An Ethical Perspective. Business and Society Review, 110(1), 59-76. Doi: 10.1111/j.0045-3609.2005.00004.x

The Enron Scandal & Ethics. (2019). Retrieved from

Tran, M. (2019). WorldCom accounting scandal. Retrieved from

Tsalikis, J., & Peralta, A. (2019). Priming effects on business ethical decision making. Priming Effects on Business Ethical Decision Making, 01(01). Doi: 10.15556/ijsim.01.01.001

Tyco Corporate Scandal of 2002 (Ethics Case Analysis) - Panmore Institute. (2019). Retrieved from

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Organizational Ethics: Key Considerations for Decision Making - Essay Sample. (2023, Jan 20). Retrieved from

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