Ethical Failures in Organizations Explained

What is this page about?

An analysis of ethical failures in organizations, using major cases to show how good companies drift into wrongdoing: Enron's off-balance-sheet accounting fraud (opening with Sherron Watkins's warning), Volkswagen Dieselgate, the Boeing 737 MAX crashes, Cambridge Analytica, Purdue Pharma and the opioid crisis, and Theranos. It explains the mechanisms of each, why ethical failures happen in good companies (ethical blindness, incrementalism, financial pressure), and how organizations can prevent them, drawing on Tenbrunsel's ethical-blindness research and the Milgram and Stanford prison studies.

What has been corrected on this page?

Every accepted correction to this page is recorded with the exact change, so readers can see how the page improved over time.

1. 11 July 2026 · corrected by Emir Baycan

   3 corrections applied: Fix impossible chronology: Watkins sent her memo to Lay in August 2001; she did not testify before Congress until February 2002 (after the bankruptcy). | Enron filed for bankruptcy on December 2, 2001, BEFORE Watkins's February 2002 congressional testimony; the original 'within weeks of testimony' sequence was impossible. | The author of Faster, Higher, Farther is Jack Ewing, not John Ewing (the references list correctly cites Ewing, J.).

   Before

   On October 29, 2001, Sherron Watkins... testified before Congress; Within weeks of Watkins's congressional testimony; John Ewing, author of Faster, Higher, Farther

   After

   In August 2001, Sherron Watkins... warned Enron CEO Kenneth Lay; Within months, Enron filed for what was then the largest bankruptcy in American history; Jack Ewing, author of Faster, Higher, Farther

   Why: Verified live: all three corrections (Watkins's August 2001 memo instead of an October testimony, corrected bankruptcy sequencing, and Jack Ewing's correct first name in both body and bibliography) are already correctly present. Excerpt/meta_description/seo_keywords/FAQ have no residual mention of any of the three fabrications. No further action needed.

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