Entry # 5

CASE STUDY – SHERRON WATKINS

     To be honest, I don’t remember much about what happened when we discussed the case studies in class. All I remember is that there were at least two groups each assigned for a case study and we were given time to read whatever was assigned to us then wait our turn to discuss in front. The first case study that was discussed was that of Sherron Watkins, who was the vice president of Enron. This wasn’t the case study that was assigned to us, but from what I gathered through the groups, the Enron company’s accountancy department was having a dishonesty issue and Watkins decided to tell the CEO about what is happening, though she did not report it to authorities. Based on that alone, I thought Watkins was brave as she decided to report it even though she knew her career was in line. With that, she also risked her life as she may receive death threats and may be isolated by the employees of the company. However, as I read the case study wholely, my views of her actions may have changed. But first, I will try to breakdown the things that are important in making a decision.

                  Who are the people involved?

                                    The direct people involved are Sherron Watkins, then Enron’s vice president that “whistleblowed” about the scandal, CEO Kenneth Lay, former Enron CEO Jeffrey Skilling, the accounting department of the company, the rest of the employees and the stakeholders. The less direct or indirect people meanwhile are the competing stocks companies, the authorities and the bystanders who are being affected by the shift in economy.

What are the facts?          

                            Jeffrey Skilling left his job as CEO, and Kenneth Lay replaced him. Sherron Watkins was deciding whether to disclose the scandal about the funny business happening in the company to the authorities but decided against it as she chose to report it to the CEO instead. Enron collapsed in the end and that’s when she decided to tell the public about the scandal. She was then featured in the cover of Time Magazine and was even honored as a corporate whistleblower.

What were the ethical issues?

                              First off, she was well-aware of the issue the company is facing. There were two options she was looking at: to report it to the authority or to report it to the higher-being. Either way, her actions will have impending effects. If she reports it to the authority without telling it to the higher-being of the company, investigations will be done immediately and there is a high chance that the company might fail but she assumes her name will be cleared and will even be considered a hero by some for telling the truth. But of course, she may receive death threats, face isolation from the employees involved, and she will always be under the judging eyes of the public. However, she reported it to the CEO, probably expecting the CEO to take action immediately but as it turns out he didn’t take any actions about it.

What are the alternatives and its consequences?

                          There’s always the option not to tell. But she didn’t as she knew her years of experience will be all for nothing if the Enron closes for its funny business and she took part in deceiving other people. She also could’ve told the authorities when she knew the current CEO wasn’t taking any action about the issue, but this puts her in a place where she is picking whether to trust her boss or trust her instincts. One viable, but unlikely, option is to report to the authority under a fake or anonymous identity. Sure, she will not be credited for whistleblowing but the funny business will end. Her career will be on the line, yes, but at least she knows in her mind, she did something right and hopefully that’s enough.

    Making decisions that will affect a huge number of people is not an easy task. There is a fine line between being good and being selfish. Sometimes, what we think is a rational decision isn’t necessarily rational for others. Watkins was right in telling the problem to her boss first. What I didn’t like about that though is that she didn’t do anything else when she realized Lay wasn’t doing anything about it. I feel that she doesn’t deserve to be called a corporate hero because she wasn’t courageous enough to do anything more about the issue. I feel that she forgot to look at the big picture. If she decided to use the information she knew to tell what is really happening, then don’t you think she could’ve helped the stockholders recover some of their shares? But no, she whistleblowed when the company has already crashed. I don’t think the information she has helped anyone but inform them of things that have already happened and cannot be remedied anymore.

      Issues like this is one of the reason why I don’t ever want to work in a corporation but let’s face it, these things happen. In a world where everything can be bought and power is blinding, we are inclined to participate in irrational acts. The only question is: What will you do about it? Will you do what is right or will you give in? Will you do what is right even if it means facing isolation and losing trust from your workmates/community? These are the things I will start pondering on in making decisions.