Agency theory, reasoning and culture at enron: In search of a solution

Journal of Business Ethics 59 (4):347 - 360 (2005)
Applying evidence from recently available public information on Enron, I defined Enron’s culture as one rooted in agency theory by asserting that Enron’s members were predominantly agency-reasoning individuals. I then identified conditions present at Enron’s collapse: a strong agency culture with collectively non-compliant norms, a munificent rare-failure environment, and new hires with little business ethics training. Turning to four possible antidotes (selection, objectivist integrity, integrity capacity, and stewardship reasoning) to an agency culture under these conditions, I argued that the currently available ethics literature would have made little difference toward averting Enron’s collapse if any of the recommendations from the relevant ethics literature had been implemented. I conclude by identifying new directions for business ethics literature in order to make it more implementable under the conditions identified at Enron. Essentially, we need a way to clearly determine (1) the difference between connivance and commitment, (2) what is meant by balance with regard to the multiple dimensions of ethics and legal theories, and (3) the proper balance between agency and stewardship reasoning.
Keywords agency theory  Enron  integrity  integrity capacity  organizational culture  stewardship theory  unethical behavior
Categories (categorize this paper)
 Save to my reading list
Follow the author(s)
My bibliography
Export citation
Find it on Scholar
Edit this record
Mark as duplicate
Revision history Request removal from index
Download options
PhilPapers Archive

Upload a copy of this paper     Check publisher's policy on self-archival     Papers currently archived: 9,351
External links
  • Through your library Configure
    References found in this work BETA

    No references found.

    Citations of this work BETA

    View all 7 citations

    Similar books and articles
    Joseph Heath (2009). The Uses and Abuses of Agency Theory. Business Ethics Quarterly 19 (4):497-528.
    Donald M. Nolen (2007). Business Ethics After Enron. The Proceedings of the Twenty-First World Congress of Philosophy 1:281-284.

    Monthly downloads

    Added to index


    Total downloads

    40 ( #35,903 of 1,088,398 )

    Recent downloads (6 months)

    1 ( #69,601 of 1,088,398 )

    How can I increase my downloads?

    My notes
    Sign in to use this feature

    Start a new thread
    There  are no threads in this forum
    Nothing in this forum yet.