Friday, May 26, 2006

The Enron Scandal and Public Attitudes Toward Business -- A Public Agenda Report

Public Agenda Alert -- May 25, 2006
* The Enron Scandal and Public Attitudes Toward Business

* The Enron Scandal and Public Attitudes Toward Business

Enron executives Ken Lay and Jeff Skilling may face jail
time, but the energy company's collapse has already taken its toll
on public attitudes about business. A federal jury convicted
the two on fraud and conspiracy charges today, but American
business is still coping with the consequences of the case.

Enron was the largest of several corporate scandals in the past
few years. The public remains skeptical of the business world
in some ways. In surveys, half say wrongdoing among corporate
executives is a widespread problem. With Enron in particular,
what seems to outrage the public most was the idea of executives
enriching themselves while employees lost their jobs and retirement
savings. Six in 10 told a Gallup survey that in the wake of the Enron
bankruptcy and participants in Public Agenda focus groups
felt much the same way.

Majorities tell surveys they are dissatisfied with the size and influence
of major corporations. And few Americans give business executives
high ratings for honesty and ethical standards. On the other hand,
large majorities believe the success of American business has a lot
to do with the strength of this country. And in their experience,
majorities believe their employer is loyal to them.

Public Agenda's focus groups on this issue suggest one important factor
in public attitudes. We've found that average citizens seem to
define business ethics differently than corporate executives.

Citizens believe preserving jobs should be a major ethical priority
for business and layoffs should be a last resort, our study found.
In contrast, most business leaders told us that sometimes layoffs
are an inevitable part of staying competitive. When executives
talked about ethics, they were concerned about the damage recent
scandals have done to business' reputation and the need to restore
public trust.

Focus group participants often said greed and poor values were at
the root of many scandals, believing that executives at some of
these corporations had either lost their moral bearings or never
had them to begin with. Business leaders we interviewed also cited
the problem of greed and declining values in society as a whole.
But they also stressed that by far, most business executives act
ethically, and that a company’s ethical stance is set at the very top.

Download a free copy of our research on business ethics, "A Few Bad Apples,"
conducted in collaboration with the Kettering Foundation:

Read our Red Flag on Trust in Business:

Read the Associated Press story about the Enron verdict:

In his new book, "Profit With Honor," Public Agenda chairman and co-founder
Dan Yankelovich talks about the convergence of cultural and business
trends that has led inexorably to corporate scandals. Yet he offers
reassurance that opportunity exists for positive change.

Find out more about "Profit With Honor":

Public Agenda
6 East 39th Street
9th Floor
New York, NY 10016

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