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Journal of Business Ethics

, Volume 86, Issue 4, pp 463–471 | Cite as

What Plato Knew About Enron

  • Michele C. Henderson
  • M. Gregory Oakes
  • Marilyn Smith
Article

Abstract

This paper applies Plato’s cave allegory to Enron’s success and downfall. Plato’s famous tale of cave dwellers illustrates the different levels of truth and understanding. These levels include images, the sources of images, and the ultimate reality behind both. The paper first describes these levels of perception as they apply to Plato’s cave dwellers and then provides a brief history of the rise of Enron. Then we apply Plato’s levels of understanding to Enron, showing how the company created its image and presented information to support that image, and how the public eventually emerged from the cave to realize the truth about Enron’s actual accounting practices and financial state, which led to the corporation’s downfall. We find Plato’s allegory both useful in analyzing the relationship between Enron and the public and instructive about the power and moral responsibility of Enron’s executives.

Keywords

accounting fraud corporate image Enron ethics Kenneth Lay Plato 

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Copyright information

© Springer Science+Business Media B.V. 2008

Authors and Affiliations

  • Michele C. Henderson
    • 1
  • M. Gregory Oakes
    • 2
  • Marilyn Smith
    • 2
  1. 1.Queens University of CharlotteCharlotteU.S.A.
  2. 2.Winthrop UniversityRock HillU.S.A.

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