In the Enron documentary, executives continued to encourage employees to buy company stock, even while they were selling their own shares. Which organizational factor most enabled this unethical behavior?

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BlackTom AI · Accepted Answer

When analyzing what enabled the unethical behavior at Enron, it helps to consider how organizational structures, culture, and controls interact.
Option 1: 'Lack of independent board oversight and weak corporate governance' points to structural weaknesses in governance. If the board fails to exercise independent oversight, executives can push aggressive strategies, misstate financials, and escape accountability, making unethical actions more likely. This factor directly affects decision-making checks and balances at the highest level.
Option 2: 'Complex accounting systems that obscured financial realities' describes an operational or technical challenge rather than an organizational enabler. While complexity can facilitate concealment, it’s the governance gaps and incentives that permit exploiting those systems. So this option explains a mechanism, but not the core organizational driver.
Option 3: 'A culture of excessive risk-taking and a "win at all costs" mentality' emphasizes corporate culture, which strongly motivates and rationalizes unethical behavior. A culture that rewards short-term gains and overlooks integrity can normalize risky, deceptive practices, acting as a powerful enabler.
Option 4: 'Insufficient regulatory oversight and weak external controls' refers to the external environment rather than internal organizational factors. While important, Enron’s core issues were internal governance and cultural dynamics rather than primarily regulatory failure, making this a less precise fit for the question as asked.
In summary, the most direct organizational factor among the options that would enable widespread unethical behavior is the combination of weak governance and lack of independent oversight, since it creates the structural permissiveness for executives to pursue harmful actions with limited scrutiny. The culture presents a strong secondary enabler, as it shapes incentives and norms, but without governance gaps, the culture alone is less likely to sustain such behavior across the organization.

ORGB3201.34643.202530 Module 6 Knowledge Check

In the Enron documentary, executives continued to encourage employees to buy company stock, even while they were selling their own shares. Which organizational factor most enabled this unethical behavior?

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