The Enron scandals and the lack of ethics involvedAnalysis of issues related to social contract theory and Kant's categorical category The Enron corporation was created in 1985, after the merger between Houston Natural Gas co. and InterNorth Inc. After this merger, the CEO of Houston Natural Gas hastily renamed the company Enron as an energy trader and supplier. The Enron company was successful at first, but suffered a fairly drastic and rapid decline. Shares of this company fell significantly, from almost $90.75 to $0.67 in early January 2002. This was very difficult for the public to understand, especially since the company was voted the world's largest company. most innovative in America. This company was run by corrupt parties which led to its downfall. Little ethics and moral reasoning were demonstrated in the management of this company, which inevitably led to its downfall (Investopedia, 2016). Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”? Get an Original Essay There are several ways in which the CEO of this company hid important information from other employees and shareholders. The primary way to do this was to use a technique called mark-to-market accounting. This mechanism is used when trading securities, the measurement of a security is based on its market value, rather than its book value. This is very beneficial for securities, but detrimental for businesses. Enron used these methods by creating certain assets, for example a new power plant. The company would then immediately affect the projected profit on its books, without even generating a single cent. If a loss occurred within the company, the generated assets were sent to an unknown ledger and remained unknown. This strategy certainly allowed Enron Corporation to absorb losses without damaging the company's reputation. However, these techniques proved detrimental to the business once the wind caught on. What is in the dark will always be revealed (Investopia, 2016). Several ethical principles were ignored during these scandals. Which would inevitably harm not only the business but also consumer confidence. These scandals limited consumer trust in big business and amounted to some of the worst white-collar crimes of all time. These break social contract theory for several reasons. One of the reasons this is unethical is that it depends on lying and hiding information. According to social contract theory, these sets of standards for business procedures include the idea that they would be defined by people. Most people would not agree with this information being hidden. Even though modern businesses are built on similar foundations, this behavior is not acceptable. There are certain ethical standards and obligations that businesses must follow. These are considered corporate social responsibilities, and although they can be defined in many ways, certain circumstances still make them seem like inappropriate business decisions. And this would definitely be one of them. I say this because you cannot hide such information from people, other companies were suffering losses that were hidden from this one. Many people have lost money and trust because of these scandals (Investopia 2016). According to Wxiaom: "First, Enron's competitive environments and rigorous standards.