Management Challenges for the 21st Century
Chapter 3: The Public Utility Ethics Challenge
3. The public utility ethics challenge Researchers investigating possible unethical activities of traders at the bankrupt energy trading company Enron, found a number of incriminating statements in the more than 2600 hours of recorded conversations taped during the 2000 and 2001 energy crisis. The recordings indicated that company traders regularly over-priced customers during the power crisis in California and other Western states (Said 2004). Enron regularly recorded their traders’ discussions to have a record of the rapid-paced ‘wheeling and dealing’ for evidence in case of trade disputes. The tapes included records of traders, who boasted of creating artiﬁcial congestion on transmission lines, shipping power away from areas where it was needed, lying about power shortages and competition for power in order to drive up spot prices, and joking about proﬁting from high prices for power as stealing money from ‘those poor grandmothers in California.’ This evidence of greed and market manipulation is indicative of a widespread failure in the moral standards of an important segment of the public utility industry. Following the disclosure of these and similar ethical breakdowns, both public and private organizations have been increasingly subjected to regulatory oversight and control. The drive for deregulation and privatization has been put on hold in much of the country – an outcome with signiﬁcant impact on the entire industry. And this crisis in the ethical standards of utility industry managers is just one of a number of forces shaping the industry for good and bad. In addition, utility...
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