The Enron Scandal And The Truth About Fracking with Bethany McLean and Creating Opportunities Through Technology-Based Education with Shelly Murphy

TTL 271 | Technology-Based Education

The Enron Scandal And The Truth About Fracking with Bethany McLean and Creating Opportunities Through Technology-Based Education with Shelly Murphy

Writer and columnist Bethany McLean shares some of the fascinating stories in our history. She takes us into what happened at Enron through her book, The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, exposing some of the fascinating details that she has found from her years of research. Her other book, Saudi America: The Truth About Fracking and How It’s Changing the World, discusses about the oil crisis and the fracking that has happened as well as their implications to the world. Bethany gives some great insights into the entire writing process especially on tough topics, and reflects on how the worst crimes in history are often the obvious things that people just keep on missing.

 

Shelly Murphy, CEO for Woz U Foundation and the co-founder of DesTechAZ, advocates for bringing technology to education. She talks about what went on at the DesTech event and how their mission on technology is going to change the way we receive education, the opportunities that come with it, and more. Shelly shares the need to spread technology-based education throughout the world, especially to kids who have no access to these resources. Ultimately, the drive is about the importance of educating the young generation in order to propel the entire country forward.

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Boomer Entrepreneurs Can’t Retire

 

One of the things entrepreneurs plan for is the time that they will eventually sell their company.  Currently many older business owners have found it difficult to reap the anticipated rewards of retirement. As the author of the Entrepreneur Exit Strategies for your Business pointed out, “it’s not enough to build a business worth a fortune; you have to make sure you have an exit strategy, a way to get the money back out.” If businesses were once very successful, the economy may have impacted their current worth.  Even with what may once have been considered a strong exit strategy, plans may have been affected by the economic downturn.

Boomers trying to sell their businesses are receiving offers that are not enough to finance their retirement.  In the Wall Street Journal article The Economy Stole My Retirement, it noted that one small business owner expected to sell for $2 million but recent losses from the recession has made that impossible.  She now has seen offers as low as $250,000.

Business owners who had planned to travel and relax in their golden years are now spending 10-12 hours a day or more working to salvage companies.  Some have no foreseeable chance of selling in the future.  Many have put all of their money into their businesses and would have to live only on social security if they let the businesses fail.

While it is admirable to have high expectations for an entrepreneurial venture, it is the wise business owner who does not keep all of his or her eggs in one basket.  Just as Enron employees learned the hard way, it is not a good idea to have all of your money invested in the company in which you work.  If the company goes under, people not only lose their jobs but their life savings as well.

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8 Important Business Ethics Cases

For those interested in researching some interesting ethical businesses cases, there are plenty from which to choose. Business leaders may feel squeezed by shareholders to produce profits.  Some have made some ethical blunders in an attempt to remain competitive. Others have used their size to squeeze out the competition.  The following includes some important business ethics cases based on well-known organizations:

  1. Enron – Questionable accounting practices and manipulation of the energy supply brought down this company. Enron: The Smartest Guys in the Room is an excellent documentary movie that explains the scandal.  Check out an excerpt from Enron’s Code of Ethics.
  2. Monsanto – Monsanto has been criticized for its mega-size.  Critics fear they are taking over the food supply as well as creating negative environmental issues. Check out Monsanto’s Code of Ethics for Chief Executives and Senior Financial Officers.
  3. Arthur Andersen – Arthur Andersen is known for its unethical auditing practices. Check out The Fall of Arthur Andersen for more complete details.
  4. WalMart – Studies have shown that WalMart may save people money but they may also negatively impact communities.  Their low prices may also hurt suppliers. The company received criticism when leadership announced they wanted to hire healthier, more productive employees. WalMart has been accused of being anti-union and has survived sweatshop and discrimination scandals. Check out WalMart’s Statement Regarding Code of Ethics.
  5. Countrywide – The company offered subprime loans that later resulted in default.  Critics have claimed that Countrywide employees told clients that their properties would increase in value and that their loans would be able to be refinanced when market values rose.  The market values declined causing many to lose their homes.  Check out Countrywide’s Code of Ethics.
  6. Beechnut – Beechnut’s ethics came into question when it was discovered that they were selling “apple juice” to foreign countries that contained something less than apple juice.  For more information on this scandal, check out Beechnut’s History and Apple Juice Scandal.
  7. Starbucks – Clustering strategy may force smaller companies out of business. There were so many Starbucks on street corners that movies like Best In Show made fun of how there might be one Starbucks right across the street from another.  Check out Starbucks’ Code of Ethics for CEO and Financial Leaders.
  8. Nike – Manufacturing practices included producing shoes offshore to save money. Nike has used its share of sweatshops in manufacturing. They have come under fire for human rights violations. Check out Nike’s Code of Ethics.

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Rumors of Famous People Being Alive or Dead: Is Ken Lay Still Alive?

I teach a lot of ethics courses where we talk about Enron and Ken Lay.  A student recently posted a link in class which I found to be interesting.  If you click on that link, there is a whole website dedicated to those who claim Ken Lay is actually alive. 

There are always rumors about people who have died still being alive.  Here is a list of some of those people:

Tupac

Andy Kaufman

Elvis Presley

Jim Morrison

Adolf Hitler

Michael Jackson

Last week there was a rumor going around that Bill Cosby died.  He is actually very much alive and well.  For a list of premature obituaries, click here.

CEO Ethics

Top ten ethical blunders

Rather than address the causes for ethical problems, companies too often simply create a filter for trying to catch infractions. This reactive approach failed in addressing total quality, and will fail in addressing quality in ethical orientation.

We now have over twenty years of experience with formal ethics structures in business. By and large these have become one-dimensional programs for delivering compliance, with very little impact on actual business strategy or corporate culture. Enron was touted as a paragon of ethical practices even while its executives plundered shareholder value, and its employees adopted ever more ruthless personnel policies. It is important to realize that such failures are not simply from rejecting ethics, but rather from misapplying them.

The Wrong Way to Strive For The Right Thing

In many ways the whole business ethics culture is at fault. Voluntary codes are not rigorous enough. Structures like ethics or integrity offices have become largely legal services grappling with compliance. Rarely do Boards or strategic planners accord ethics the serious consideration given to finance or marketing. And whistle-blowing systems have been adopted without protecting those who take the risk to do the blowing. Business ethics too often pivot on a business case: tolerated for contributing to reputation or protecting against fines, but considered optional if there is a cost to ethical adherence.  

The most common mistakes are in the most common practices:

  1. Adopting formal codes as a tactic rather than as a strategy, assuming rules will catch mistakes rather than addressing the underlying beliefs, motivations and culture.
  2. Managing ethics as a legal or PR variable rather than creating an operational culture that invites the hard questions and uncertainties of moral dialogue.
  3. Instituting systems of accountability to more clearly assign blame rather than to give more depth to the fiduciary duties for care, answerability and due-diligence.
  4. Defining ethics principles as a top-down or internal exercise rather than by means of a dialogue with stakeholders, critics and those impacted by corporate activities.
  5. Assuming that generic terms are enough to inspire employee adherence rather than interacting with them to discover the precise implications for values, attitudes and behaviours.
  6. Downloading ethical responsibility on employees as a parallel deliverable to business results without providing the tools, skills or leadership for effectively managing the conflicting objectives or ambiguities.
  7. Introducing whistle-blowing structures without creating the culture that supports dissent and rewards those who take stands based on ethical principles.
  8. Making ethical commitments without introducing the hard measures for evaluating and tracking the specific dimensions of trust and integrity.
  9. Embracing ethics programs during crisis or scrutiny without unlearning the habits and values that contributed to impropriety in the first place.
  10. Regarding ethics as a binary option without realizing that it is actually a process of constructive and iterative transformation that actually extends and enhances strategy. 

I teach several ethics classes. I think this is a good article written by the Center for Ethical Orientation. Many of my master and doctoral students are considering starting their own businesses. It is very important to have a strong code of ethics set up from the beginning and to be sure that this message is being delivered.