October 2017
Intermediate to advanced
594 pages
17h 18m
English
Content preview from Resisting Corporate Corruption, 3rd Edition
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Essay 2How a Corporation Becomes Corrupt
It is misleading to imply that there is only one way in which corporations become corrupt. Obviously circumstances matter and the stories of companies gone bad show ready evidence of subjective factors and local conditions. That said, there is a general trajectory which companies going corrupt tend to follow. The Enron story perfectly illustrates this trajectory. Laying out this arc of descent allows students to see more clearly the choices at work and the consequences they can bring.
The descent into corruption almost always begins at the top. There will be a CEO, possibly a series of CEOs, who signal they really don’t care about ethics or financial control. The signals sent can vary. Sometimes they take the form of a yawning gap between the stated ethics policy and the employee conduct tolerated. Ethics policies proclaiming fealty to the law are undercut by employees recognized or rewarded for clever workarounds. At other times the CEO gives a message to top subordinates that “you gotta do what you gotta do” to succeed. A third type of signal occurs in instances where clear wrongdoing is brought to the CEOs attention and the boss refrains from disciplining the bad actor. In all cases, the consistent thread is the CEO prioritizing some other goal above enforcing the ethics policy and practicing good financial control.
The Enron Oil Trading cases illustrate this kind of CEO behavior. These cases are critical to understanding what happened ...
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