In sociology of deviant behavior we watched a documentary titled Enron: The Smartest Guys in the Room. This was filmed in 2005 and is about the company titled Enron. Now this company is one of the largest in the world for technology, energy, industry, and business. However there is a scandal revolving around this particular company. This scandal involves the top executives of the company getting away with millions of dollars while everyone else lost everything they may have earned before the scandal took place. In this case the other people are investors, as well as other employees.
The acts of deviance that are portrayed throughout the documentary are embezzlement, suicide, gambling, insider trading, and the whole ordeal that Enron created involving the entire state of California. These are all forms of privileged deviance, not underprivileged deviance. Many different aspects were mentioned throughout the documentary including white-collar crime; privileged deviance; constructionist theories explaining what was happening; techniques of neutralization that were used; how and why Arthur Anderson was involved; and prevention strategies that could be utilized in the future.
According to the textbook, white-collar crime is "defined approximately as a crime committed by a person of respectability and high social status in the course of his occupation (Thio 335)." According to the NIBRS a description of white-collar crime is given. "NIBRS provides for the collection of age, sex, race, ethnicity, and resident status information on the offend ers associated with an incident in which some descriptive information is known. The NIBRS data for 1997 through 1999 show white-collar crime offenders5 are, on average, in their late-twenties to early-thirties, which is only slightly older than most other offenders captured in NIBRS. The majority of white-collar crime offenders are white males, except for those who commit ted embezzlement. However, in comparison to offenders committing property crimes, there is a higher proportion of females committing these white-collar offenses" (Barnett 5).
The forms of privileged deviance that were evident in the documentary Enron: the Smartest Guys in the Room are embezzlement, fraud, and insider trading. According to the textbook, privileged deviance all these acts of deviance are considered to be white collar deviance. White collar deviance is occupationally related and is performed by a respectable high class and high status person (Thio 335). In the documentary, the high class people are the executives. The main executives involved with the scandal are Ken Lay, Jeffery Skillings, and Lu Pi. They were assisted by Andy Fastow, and Arthur Anderson.
According to Thio, there were three types of rituals that took place throughout the company of Enron. These rituals were called ritual of deceit, ritual of allegorical depictions, and the ritual of self-gain. The ritual of deceit is "the routine, common practice of concealing or perverting the truth for the purpose of misleading others" (Ulsperger 292). The Ritual of allegorical depictions is "using some fictional story and characters, such as a science fiction movie and its characters, to represent a real event and people" (Ulsperger 293). And finally the ritual of self-gain is appearing as "the form of the company showering employees with extremely generous compensations" (Ulsperger 293).
Some constructionist theories that can be applied to this documentary about Enron are the labeling theory, the legal reality theory, the Marxist theory, and the power theory. The labeling theory can be applied because the top executives of Enron were labeling the people who were of lower class than themselves as better off than anyone else in the company. "The meaning…that people attach to an act is much more important than the act itself" (Thio 34).
Meanwhile the legal reality theory can be applied because the executives took advantage of the state of California. They took advantage of California by causing them to continuously pay more money to keep their power going instead of having constant black outs. The thing is though that California already had enough power so they didn't need to undergo blackouts, Enron was just trying to make lots of money off of them. "The law in action shows that legal authorities are actually unfair and unjust, favoring the rich and powerful over the poor and weak" (Thio 41).
The Marxist theory is relating to "deviance and crime stem from the exploitative nature of capitalism" (Thio 49). This can be related to the documentary watched in class because of the California scandal. The final theory that can be used to talk about the documentary is the power theory.
This theory is "because of strong deviant motivation, greater deviant opportunity, and weaker social control, the powerful are more likely to engage in profitable deviancy than are the powerless to engage in unprofitably deviancy" (Thio 49). This relates to the documentary about Enron because the top executives of the company have way more opportunity to commit these crimes than anyone else in the company.
The evidence shown of the Sykes and Matza's techniques of neutralization in the documentary are when Skillings denied his responsibility for what had happened with Enron when it was in the process of making millions of dollars. This is an example of denying the responsibility (Thio 281). The other one that was evident in the documentary was denying the victim (Thio 281). This could be seen throughout the part with California and the blackouts when the people working for Enron were laughing about what was happening in the state. The last technique that could be seen in Enron: the Smartest Guys in the Room was claim of entitlement (Thio 284). This is when the top executives charged California more than it needed to because it felt like they could since they had more power over that particular state.
Arthur Anderson became involved with Enron because the company of Enron needed the assistance of an accounting firm. When the scandal took place at Enron it quickly became known that Arthur Anderson was also involved with what had occurred.
"Supervisors at Arthur Andersen repeatedly reminded their employees of the document-destruction memo in the weeks leading up to the first Security and Exchange Commission subpoenas that were issued on Nov. 8. And the firm declines to rule out the possibility that some destruction continued even after that date. Its workers had destroyed "a significant but undetermined number" of documents related to Enron, the accounting firm acknowledged in a terse public statement last Thursday. But it did not reveal that the destruction orders came in the Oct. 12 memo. Sources close to Arthur Andersen confirm the basic contents of the memo, but spokesman David Tabolt said it would be "inappropriate" to discuss it until the company completes its own review of the explosive issue" (Kadlec).
The consequences of the company's actions are that they immediately lost clients because of what they had done. The head Chief Executive Officer (CEO) of Arthur Anderson stepped down from his position. In fact the CEO admits what he did was wrong in an interview that took place. He said ""While my nature is to keep fighting to protect our people and our clients, the fact is that the improper shredding of documents took place on my watch - and I believe it is now in the best interests of the firm for me to step down from the CEO position," Berardino said in a statement late Tuesday"" (Beltran).
Being very conscious of what the public community thinks of them Arthur Anderson took an ad in the newspaper that said "Jan 8, 2002: …lists steps the firm has taken to correct problems concerning its handling of the Enron account" (CBS News). Another fact from the previous source was very interesting. "April 8, 2002:Taking a "painful" but inevitable step after suffering critical damage from its role in the Enron scandal, Andersen says it will lay off 7,000 employees as the 89-year-old accounting giant fights for its survival. The dismissals will pare its U.S. work force of 26,000 by more than a quarter," (CBS News).
Some prevention strategies that could be put into place to make sure this kind of thing doesn't happen in the future are to make sure they don't "audit shop" (di Stefano). Another thing that can be done is keep one constant set of management in the company rather than constantly changing (di Stefano). When thinking sociologically about prevention strategies it would be a good idea to if at all possible to remove the problem from the area of disturbance. Unfortunately since some problems cannot be removed other things must be done. In the way of thinking for a positivist thinkers would be most likely to assess the problems associated with what had occurred with Enron to be "a determined behavior" as well as a "observable object" (Thio 7). A way of describing any situation having a problem can use the objectivism and determinism. This is "deviance is an observable object in that a deviant person is like an object and thus can be studied objectively…deviance is determined by forces beyond the individual's control" (Thio 8). This However a constructionist thinker would be saying that the top executives of Enron are performing a voluntary act. This means that "human beings, because they possess free will and choice-making ability, determine their own behavior" (Thio 10).
So basically Enron caused all sorts of trouble throughout the United States, especially in California. The executives of this company did this just because they wanted to become richer than they already were, and with money they didn't technically have. They didn't care about how their actions were day-by-day destroying the lives of other people. However one employee had the guts to stand up to what was happening and accuse the top executives of Enron. This person was Sherron Watkins. "[By December 2, 2001, Enron stock had plummeted and the conglomerate declared bankruptcy.] That's when the congressional investigations started ... They were shocked that this Fortune 7 Company could spiral out of control. At least 13 different congressional committees held formal investigations into Enron's demise. One of them, the House Energy and Commerce Committee, stumbled across my memos to Ken Lay in a box of documents they had subpoenaed from Enron" (Watkins).
Works Cited
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Beltran, Luisa. "Andersen CEO Berardino resigns CEO of embattled accounting firm steps down in wake of Enron scandal, criminal indictment..." CNN 26 Mar 2002: n. page. Web. 22 Nov 2010. ..
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"Frame Source Anderson." CBS News. CBS News, 21 Nov 2010. Web. 22 Nov 2010. .com/htdocs/troubled_companies/framesource_.
Gibney, Alex, Dir. Enron: The Smartest Guys in the Room. Dir. Alex Gibney." Perf. Skillings, Jeffery. Mangolia Pictures, United States: 2002, Film. .com/m/enron_the_smartest_guys_in_the_room/.
Kadlec, Daniel. "Enron: Who's Accountable?" Time 13 Jan 2002: n. page. Web. 22 Nov 2010. .com/time/business/article/0,8599,193520,.
Thio, Alex. Deviant Behavior. 10 ed. Boston: Allyn & Bacon, 2010. 7, 8, 10, 34, 41, 49, 281, 284, 335. Print.
Ulsperger, Jason S. "Enron: Organizational Rituals as Deviance." Readings in Deviant Behavior. 'Ed'. Alex Thio. Boston: Allyn & Bacon, 2010. Print.
Watkins, Sherron. "Sherron Watkins Quotes." Think Exist. Think Exist, 2010. Web. 22 Nov 2010. /quotation/by-december-enron-stock-had-plummeted-and- .