Kenneth Leigh and Enron’s Impact on Business Ethics

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Table of Contents

Introduction
Features of Character
Aspects of Spirituality
Aspects of Transformation in Action
Conclusion
References

Introduction

Kenneth Lay, the CEO of the Enron Company, had a major impact on the development of business and corporate ethics (Ferrell & Ferrell, 2011, p. 1). An analysis of the ethical conduct of this famous business figure will help shed light on his character, the motivation for his decision-making, as well as aspects of transformation in action. Analysing Lay’s ethical perspective is of great value to the study of business ethics today.

Features of Character

Kenneth Lay was a senior executive of Enron, a giant Texas energy company. In 2004, Lay stood trial on charges of corruption, fraud, and conspiracy and was eventually found guilty (Kenneth Lay: Biography, n.d., para. 5). Samuel (2008) describes Kenneth Lay as an intriguing personality, exhibiting contradictory qualities in his personal and business life (p. 3). The author points out that Lay was loved and admired in his local community for being kind and generous, but managed to lead his company to moral and financial disaster. Samuel analyzed the features of his character from two different standpoints – humanistic and existential.

From the psychological perspective, Kenneth Lay displayed the characteristics of a person suffering from bipolar disorder (Samuel, 2008, p. 18). Thus, his decision-making could have been influenced by the contradictory nature of his character. Samuel (2008) indicates that his bipolar disorder coupled with extreme narcissism and a distorted sense of humanism might have led him to make the decisions that resulted in a disastrous outcome (p. 19).

Aspects of Spirituality

Studies have shown that certain aspects of spirituality have a significant influence on a person’s organizational and ethical conduct. Ferrell and Ferrell (2011) claim that Ken Lay’s allegedly criminal conduct is neither evident nor straightforward (p. 3). The authors interviewed with Lay, where he admitted that he used to rely on his subordinates in the legal and accounting department to report any cases of misconduct (Ferrell & Ferrell, 2011, p. 3).

Therefore, we can conclude that trust is the first aspect of Lay’s spirituality that determined his decision-making. The second aspect that must be mentioned is his commitment to organizational learning and creativity, as the Enron Company employed innovative and complex strategies that were a priority for succeeding. In the interview, Lay admitted that even though the company experienced difficulties or even faced scandals, it did not mean that success was not possible. The latter point shows the third aspect of spirituality – job involvement and commitment.

Aspects of Transformation in Action

Envisioning a productive community is the first key aspect of Kenneth Lay’s business attitude. Trust and loyalty to the employees were important for the CEO, which eventually proved fatal. Lay envisioned an innovative, fearless team of professionals that are bold enough to face the current challenges. Thus, the second aspect of transformation in action is transcending fear. As Lay admitted in the interview, due to Enron’s corporate culture and its purposeful activity, it was bound to overcome any difficulties and gain substantial profits despite the scandals that occurred (Ferrell & Ferrell, 2011, p. 3). To this end, the third transformational aspect emerged, i.e. embodying a vision of the common good. Lay’s trustful attitude and visionary policies were aimed at attaining goals that were meant to maintain Enron’s leading position in the energy market for many years to come.

Conclusion

Overall, an analysis of Kenneth Lay’s ethical conduct led to interesting conclusions. It would seem that Lay had a rather complex and contradictory personality that had serious implications for the business. His kind and generous spirit displayed in his personal life transformed into an overly trusting and overconfident business attitude, which eventually led to the moral, as well as the financial downfall of Enron.

References

Ferrell, O. C., & Ferrell, L. (2011). The responsibility and accountability of CEOs: The last interview with Ken Lay. Journal of Business Ethics, 100 (2), 209-219.

Kenneth Lay: Biography. (n.d.). Web.

Samuel, L. K. (2008). Kenneth Lay: A psychological personality assessment. (Doctoral thesis, Walden University, Minneapolis, MN). Web.

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Kenneth Leigh and Enron’s Impact on Business Ethics

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