Assignment/ Developing Ethical and Authentic Leadership Behaviors

Teresa Jordan

• Some of the worst leadership scandals have occurred over recent decades due to the absence of ethical leadership. Complete the following for this assignment:

• After watching the NBC Learn video clips in this unit's first study, choose one of the following leaders and research the corresponding leadership scandal to learn more about the case.

o Who's to Blame for the Enron Bankruptcy? - Kenneth Lay and Jeffrey Skilling.

See transcript below.

• Briefly summarize the scenario, including ethical implications of the issue for individuals, the organization, and society at large.

• Describe the terminal and/or instrumental values proposed by Rokeach on pages 26-27 of the Gamble and Gamble text that may have guided the leader's decision making.

• Among the variety of ethical theories and rationales for ethical behavior presented in the Gamble and Gamble text (pages 33-36), which would be most applicable to the leader in the case you selected? Explain.

• Explain whether the leader's behavior in this scenario would have been considered ethical in a different culture, and why or why not.

• Describe how the application of Sissela Bok's model of ethical decision making on pages 32-33 of the Gamble and Gamble text might have resulted in a different outcome for the leader.

• Describe at least two strategies that are used by your organization to hold its leaders accountable for adhering to ethical principles.

Transcript for assignment

Who's to Blame for the Enron Bankruptcy?

TOM BROKAW, anchor:

There's a new twist in the bitter blame game tonight between executives and employees of Enron, the giant energy company now struggling with bankruptcy. That brings us to the NIGHTLY NEWS QUESTION: Before Enron, what was the largest corporate bankruptcy ever?
The answer, Texaco. It filed for bankruptcy in 1987 to avoid paying huge penalties in a lawsuit. Its assets at the time were almost $36 billion. Enron's are far more, some $63 billion. Now, the question: What went so wrong? Who's really going to pay? Here's NBC's Lisa Myers.

LISA MYERS reporting:

Today, shell-shocked former Enron employees attend a job fair at the Houston Stadium bearing the company name. Asking questions now being pursued by Congressional committees and criminal investigators. How could this happen?

Unidentified Man: The house of cards fell down and it--it was strictly a house of cards.

Unidentified Woman: We think it was bad management. Greed. Bad accounting practices.

MYERS: One factor, experts say, arrogance. Enron's political connections were golden. Enron and its chairman, Kenneth Lay, seen here at the game with George W. Bush, were among Bush's biggest contributors. When the Bush energy plan was drawn up, Enron was at the table.

But since Enron's collapse, flashy connections have not shielded the company.

Representative RICHARD BAKER (Republican, Louisiana): This may be the single most exceptional egregious example of corporate conduct I've seen in many, many years.

MYERS: The facts, Enron's stock, once $90 a share, today closed at 63 cents. Managers were rewarded with $100 million in bonuses, even as 4,000 workers are laid off. Executives cashed in hundreds of millions of dollars in stock before it lost all value, but workers were restricted from selling stock in their 401(k) during a key period. Today, the company insists workers had adequate notice of the freeze. The Padgetts lost their entire retirement, $600,000.

Ms. KAREN PADGETT: Our financial future, just taken away from us. It's devastating.

MYERS: This year, Fortune magazine declared Enron the nation's most innovative company. As it turns out, what was most innovative was its accounting. Overstating its value by $1.2 billion. Hiding $500 million in debt. Congress already is focusing on Enrons' auditor, Arthur Andersen, which now claims the company withheld critical accounting information.

Representative JOHN DINGELL (Democrat, Michigan): This is a major calamity for the accounting profession.
MYERS: Experts say it may be years before we really know what went wrong, and whether someone is going to jail. And they warn, it could happen again. Lisa Myers, NBC News, Washington.