Business Ethics: Decision Making for Personal Integrity & Social Responsibility 5th Edition by Laura

Ethical Leadership:
Business leaders therefore have a responsibility for the business environment that they create; what we shall later refer to this environment as the “corporate culture.” The environment can therefore strongly encourage or discourage ethical behavior. 
Ethical business leadership is precisely this skill: to create the circumstances within which good people are able to do good, and bad people are prevented from doing bad. 
The Enron case provides an example. The Decision Point included below (taken from a previous edition of this book) described the case of Sherron Watkins, an Enron vice president.  She seemed to understand fully the corruption and deception that was occurring within the company, and she took some small steps to address the problems within the Enron environment. But when it became clear that her boss might use her concerns against her, she backed off. The same circumstances were involved in connection with some of the Arthur Andersen auditors. When some individuals raised concerns about Enron’s accounting practices, their supervisors pointed out that the $100 million annual revenues generated by the Enron account provided good reasons to back off. The “Sherron Watkins” Decision Point, below, exemplifies the culture present at Enron during the heat of its downfall and this example might be used as a class discussion topic or even a paper assignment topic.
      
 
Decision Point
Sherron Watkins
Sherron Watkins, a VP at Enron, sent a memo to CEO Ken Lay expressing concerns about the company’s questionable accounting practices.  She was hoping to turn things around in order to right the wrongs before they were exposed to the public. She brought to his attention the fact that many people knew about, or were suspicious about, the inappropriate behavior occurring at the firm and that they would not be able to hide it much longer. She also voiced her concern for the investors as well as for the Enron employees that she knew were aware of the situation and were almost desperate for the company to get caught.
Watkins was featured on the cover of Time magazine after Enron’s collapse and honored as a corporate whistleblower, although she never shared her concerns with anyone other than Ken Lay before “blowing the whistle.” Was Watkins an ethical hero in taking these steps?  Should she have gone further in reporting potential wrongdoing to outside authorities?  As in the case of Aaron Feuerstein, This can be another opportunity to raise the distinction between ethically obligatory acts and heroic acts (ethically praiseworthy, but not required).
Students are asked to consider the following questions in determining whether Watkins was an ethical hero:
What facts would you want to know before making a judgment about Watkins? What ethical issues does this situation raise?
Besides Kenneth Lay, who else might have had an interest in hearing from Watkins?  Who else might have had a right to be informed?  Did Watkins have a responsibility to anyone other than Lay? 
Other than informing Lay, what other alternatives might have been open to Watkins?
What might the consequences of each of these alternatives had been?
From this section of the memo, how would you characterize Watkins’ motivation?  What factors seem to have motivated her to act? 
If you were Ken Lay and had received the memo, what options for next steps might you have perceived? Why might you have chosen one option over another?
Do you think Watkins should have taken her concerns beyond Kenneth Lay to outside legal authorities? 
 
*Chapter Objective 3 Addressed Below*
The Ethical Question: Ethics involves what is perhaps the most monumental question any human being can ask: How should we live? 
Ethics is, in this sense, practical, having to do with how we act, choose, behave, and do things.
Philosophers often emphasize that ethics is normative, which means that it deals with our reasoning about how we should act. 
Social sciences such as psychology and sociology also examine human decision making and actions, but these sciences are descriptive rather than normative.  When we say that they are descriptive, we refer to the face that they provide an account of how and why people do act the way they do; as a normative discipline, ethics seeks an account of how and why people should act, rather than how they do act.
How should we live?  This fundamental question of ethics can be interpreted in two ways.
"We" can mean each one of us individually, or it might mean all of us collectively.
In the first sense, this is a question about how I should live my life, how I should act, what I should do, and what kind of person I should be. This meaning of ethics is based on our value structures, defined by our moral systems; and, therefore, it is sometimes referred to as morality. It is the aspect of ethics that we refer to by the phrase “personal integrity.” If morals refer to the underlying values on which our decisions are based, ethics refers to the applications of those morals to the decisions themselves.