In the recent past whenever we turned on the TV or read the newspaper we heard of some kind of scandal that had rocked the stock market; among these scandals perhaps the biggest was the Enron Corporation. The scandal arose not due to the financial market or the decline of demand, but due to the lack of ethics in the way that the company decided how to operate and report to its stock holders. This lack of ethics created a riff between most of the companies in the United States and the people that either held stocks in those companies or people that relied on the services that were provided by those companies. This lack of ethics also forced the government to pass legislation which would hold management teams responsible for the actions of their companies in the future. In this paper we will look at how management teams need to use ethics when they are in the planning phase of the four functions of management to create an ethical plan of operation, and how laws can hold these teams accountable if they fail to operate ethically. We will also look at the Enron Corporation and use it as an example of how its unethical planning and decision making forced the company to fall from being one of the most powerful companies in the world to filing for bankruptcy.
Planning is possibly the most important phase within the four functions of management. It is during the planning phase that management determines the organization's mission, vision, values, goals, objectives, roles and responsibilities to its customers and stock holders. An organization's success or failure relies heavily on management's plan. It is in this phase that a management team needs to make ethical decisions related to the direction that a company should take or ...