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The Enron Case and Hobbes’ Ethical Theory Essay Sample

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The Enron Case and Hobbes’ Ethical Theory Essay Sample

            The Enron scandal reveals how some big companies and corporations can result to acting unjustly for the sake of making greater profits. The Enron case becomes controversial in such a way that the U. S. government realizes that corporations and companies could really behave unethically just for money (Dembinski, 2005).

            According to a report, the Enron executives had deliberately attempted to falsify and fabricate financial reports of the company (Q&A: The Enron Case, 2006). The Enron market sales were not good enough to give profits to the company. Because of this, the executives arrived at a decision to mask the financial standing of the company hoping that they would be able to save the company.

            Unfortunately, Enron did not really recover. It marked extreme losses and debts. The last thing that the company did was to make a partnership with other investors which could pull their market sales up (Q&A: The Enron Case, 2006).

            But when the scheme was finally discovered, some of the executives had already sold their shares to other investors. They had anticipated that whatever the company do, they just cannot save the company anymore. So what they did was to save themselves first. The stakeholders, which include the stockholders, the investors, and the employees were all surprised and enraged when they learned about the fraud and conspiracy made by the Enron executives.

            The casualties of the incident include the losses on the side of both the stockholders and the investors. The employees of the Enron Company lost jobs marking the increase of unemployment in the state (Q&A: The Enron Case, 2006).

            Using Thomas Hobbes Ethical Theory, it suggests that man in its state of nature is nasty, brutish, solitary, etc (Dietz, 1991). It entails that man only recognizes thing that would help him preserve himself. Hobbes suggests that man has the tendency to promote above other things his own interests such that his actions can be against other individuals.

            In connection with the Enron case, Hobbes concept of Man’s State of Nature suggests that it is natural for everyone to always think of his own advantage or for his own survival than to think first about others’ welfare (Dietz, 1991). Such metaphor can really be seen in the attitude of the executives who performed fraud and conspiracy against the company’s stakeholders to save their own welfare first.

            In a way, Hobbes ethical theory shows that man, by nature, is egotistic (Dietz, 1991). This means that his actions are based on how things would promote his interests and for his survival. As Hobbes puts it, all that man does is for his own advantage, and even the very act of helping other individuals could also be motivated by the things that could be given to him in a form of reward.

            Nonetheless, the Enron executives cannot use Hobbes’ human nature to argue that it is natural for them to act as how they did. In Hobbes’ moral philosophy, though he admits the idea that man is naturally selfish, he suggests that in order for him to have a greater chance to survive he must join in the society wherein his interests as well as others’ interest are being reconciled so as to arrive at a common good that which ensures the greater chance of survival by all the members of the society (Dietz, 1991).

            Furthermore, those members who would go against the common good would be punished by law (Dietz, 1991). Consequently, law serves as the mechanism that which legitimizes the contract made by all the members of the society. In effect, the Social Contract made by the members of the society protects and promotes their interests by virtue of the common good.

            The same thing should be applied to the case of Enron. The Enron executives should be punished by law for violating the law. At the same time, the government should pass more laws that which protect the interests of the stakeholders of the company against its initial tendency to promote for the things that would give them more profits. The inclusion of Corporate Social Responsibility is one of the ethical aspects incorporated in making business.


Dembinski, P. H. & Lager, C. (2005) Enron and World Finance: A Case Study in Ethics.  Palgrave Macmillan

Dietz, M. G. (1991) Thomas Hobbes and Political Theory. University Press of Kansas

Q&A: The Enron Case. (2006, July 5)). Retrieved November 8, 2007, from BBC News:            http://news.bbc.co.uk/2/hi/business/3398913.stm

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