Enron

Read the case study article: Cohan 2002 '"I Didn't Know" and "I Was Only Doing My Job": Has Corporate Governance Careened Out of Control? A Case Study of Enron's Information Myopia', Journal of Business Ethics, vol. 40, pp. 275-299 (available via the eReader).

This article covers a number of areas that relate to different topics in this course.

One point on this case study: The Enron case, and similar cases (WorldCom, HIH, etc), are sometimes discussed in terms of CSR and how the problems in these firms were CSR failures.
Greenfield 2004 discusses this issue and proposes that:

"These events are billed as examples of [the failure of] “corporate irresponsibility.” In fact, they are no such thing. They are instances of plain, old-fashioned theft and fraud, albeit on a grand scale." (p. 19)

"A close look at most of the scandals that generated our new focus on “responsibility” shows that the issues have little to do with the actual business of a corporation. The issues are the people who are operating the corporation. If the issues are about people, they are not related to CSR at all. Rather than being about “corporate responsibility” or “corporate irresponsibility,” the scandals are about criminality, conspiracy, and utter disregard by individuals for anyone other than themselves. The people who now run corporations are very like those who worked diligently through legal systems for more than a hundred years to minimize the individual risk assumed in owning and operating a company. Despite corporation-as-person rhetoric, there have to be live people who take responsibility for those organizations. That is the law. Because everyone has been focusing attention on the organizations, however, we have managed to miss this most obvious fact: People run corporations. (pp. 24-25)

In taking this a little further, a 2005 article in The Economist made the point that some issues that we tend to lump into CSR discussions do not really have a place there at all – they are not CSR matters but ones dealing with ethical behaviour and 'doing the right thing' (although as is evident from the discussion so far in this course, CSR and ethical behaviour are inseparable). Here's what the article had to say:

"At one end of the broad span of CSR lie corporate policies that any well-run company ought to have in place anyway, policies that are called for on any sensible view of business ethics or good management practice. These include not lying to your employees, for instance, not paying bribes, and looking farther ahead than the next few weeks, [these] practices do not need any special CSR defence: they can perfectly well justify themselves in simpler ways, either as meeting standards of ordinary decency, or as being necessary in any case if managers are to run a successful business. The issue here is not whether the activities themselves make sense, but whether they deserve to be dignified by the term “corporate social responsibility”—that is, whether they deserve the special praise which this label is intended to elicit.(The Economist 2005).

References

Greenfield, WM 2004, 'In The Name of Corporate Social Responsibility', Business Horizons, vol. 47, no. 1, pp. 19-28

The Economist 2005, The Union of Concerned Executives, The Economist, viewed 22 August 2005