Project #43964 - Case Study

Imagine you are a young, up and coming MBA at Enron in the winter of 2000. You have been working for the company for two years and eleven months and have far exceeded company performance objectives. According to your contract, options for 100,000 shares of stock exercisable at $15 dollar a share, will vest after three years of continuous service, on the condition that you meet all performance objectives. The stock currently sells for $65 a share and is rapidly increasing in value.

 

You have been involved in managing several Enron accounts. In your work you have, on direct orders from the CFO, arranged several transactions with a number of partnerships that seem odd to you. These complicated financial transactions appear to transfer debt from Enron to these partnerships. Enron shows revenues from these partnerships, but you have knowledge of some of the operations of the partners and cannot see how these transactions are acceptable to standard accounting practices. You send a memo to the office of the CFO pointing out your concerns. A financial manager for the company calls you on the phone (something very unusual). He thanks you for your diligence, and says that everything is fine. Arthur Andersen, the external auditor, has reviewed and approved the creative transactions that, he says, are planned according to cutting edge financial strategies.

 

Then, a week after you receive the call from the office of the CFO, you are at a function for high-ranking Enron executives. You feel extremely privileged to have been invited. You are standing alone in the garden in a quiet area where there are few people and you overhear people talking. The CFO is speaking with some high-ranking person from Arthur Andersen. They speak about the practice of inflating Enron earnings and transferring debt to partners. You strain to make out the heated discussion that has something to do with the sustainability of the practice and the possible consequences of discovery. Someone says, "Its really too late. We either make it work or the jig is up, and we try to contain the damage. In either case we all know what we should do with our stock."

 

The conversation breaks up and no one notices you. No one knows that you overheard the conversation. You have already written a memo about what you do know. You have complete deniability. In fact, if a scandal breaks, you can even claim that you did speak up about what you knew and received assurances that everything was fine.

 

Write 800-1000 words (minimum) that discuss the following questions:

 

Will you "blow the whistle" on what you heard in the garden? If so, how will you blow the whistle? If you decide to blow the whistle, what are your reasons for doing so? If you choose not to blow the whistle, what are your reasons?

 

Your discussion should reflect knowledge of what Boatright says about issues, problems and justifications for whistle-blowing. Also, in discussing the answers to these questions you should include the following: 1) you should evaluate real and potential conflicts of interests that confront you in your decision 2) you should explain how your reasoning is consistent or inconsistent with the three following moral theories: Kantian moral theory, utilitarian moral theory and virtue theory. Again, be honest in explaining your decision and your reasoning. Evaluation will not concern what you decide, but the quality of your reasons and explanations, and your knowledge of the moral theories under consideration. Also, in discussing your reasons for blowing the whistle or not blowing the whistle, you should reveal some knowledge of issues and arguments on whistle-blowing presented by Boatright in the textbook.

 

Your personal opinions are not relevant to evaluation of this essay. The essay will be evaluated according to the quality of 1) reasoning 2) explanation of factual issues, concepts and principles relevant to the topics 3) interpretation of the significance of case to concepts, principles and theories discussed in the course.

Subject Philosophy
Due By (Pacific Time) 10/18/2014 12:00 pm
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