The Enron Scandal and the Neglect of Management Integrity Capacity

The nature, value, and neglect of integrity capacity by managers and the adverse impacts that Enron executive practices have had on a range of stakeholders are delineated. An explanation is given on how moral competence in management practice is addressed by each dimension of the management integrity capacity construct (process, judgment, development, and system) and how Enron executive practices eroded each dimension. Specifically addressed is how behavioral and moral complexity can be utilized to balance the competing values of management and ethics theories to reduce the likelihood of future Enron‐like managerial malpractice. Finally, three positive action steps are recommended to improve managerial integrity capacity and remedies are proposed for victimized Enron stakeholders.