Comm101 Tutorial1 Essay

List 5 key stakeholders affected by the collapse of Enron? Explain briefly how each stakeholder was affected.

The top managers operated in a corrupted fashion They did not even try to produce a positive symbolic management within the organization. Thus, the failure of the company was also the reflection of their moral failing. As a matter of fact, not only there was an aggressive and arrogant culture, but managers were mainly driven by corruption, and greed. They had no space for ethics; their main goal was trading for financial gains. Managers at Enron did not focus on long term goals. Moreover, they did not take care of their shareholders. Executives had neither an open relationship nor a shared vision with their employees. Instead, they were only interested in enriching themselves; according to their philosophy any situation could bring profits, even though this might involve crossing ethical lines. Indeed, the culture of pride, arrogance and greed at Enron made executives look for whichever solution in order to get more and more profits. Because executives wanted to benefit themselves first, all the decisions they took in the board room were made on the only account of how they could earn more. For all the above-mentioned reasons, operational and financial controls were inadequate,

Enron: The Smartest Guys in the Room Based on my observations of the movie, I think that the major cause of the downfall of Enron was quite simply greed and pride. Once the company started growing and the money was pouring in none of the top executives wanted to stop the train. When Jeffrey Skilling was hired it was under the pretense that a mark to marketing accounting system would be used. This system would basically allow Enron to project long term earning on multiyear contracts as current income. Once Skilling got the door opened the earnings reports could be manipulated at will.

3. What role did the company’s chief financial officer play in creating the problems that led to Enron’s financial problems?

Numerous factors impacting Enron lead to perceived solutions exacerbating the issues and escalating the magnitude of fraud perpetuated. As time progressed Enron faced increasing competition while simultaneously enduring the effects of the beginning of economic recession. The above issue increased the pressure on executives to continue posting performance numbers despite the reality of outside

On the surface, the motives behind decisions and events leading to Enron’s downfall appear simple enough: individual and collective greed born in an atmosphere of market euphoria and corporate arrogance. Hardly anyone—the company, its employees, analysts or individual investors—wanted to believe the company was too good to be true. So, for a while, hardly anyone did. Many kept on buying the stock, the corporate mantra and the dream. In the meantime, the company made many high-risk deals, some of which were outside the company’s typical asset risk control process. Many went sour in the early months of 2001 as Enron’s stock price and debt rating imploded because of

Infinite Energy states that the second and most shady reason for Enron's collapse was the hidden losses within the company. The company allegedly enriched itself and formed partnerships specifically designed to hide $500 million in company losses. Because these losses were

Enron failed largely due to the unethical practices of its executives (Johnson, 2003) Primary motivators is known to have been greed amongst managers and their subordinates, most of whom seemed to have been in a race to receive larger

The first leading cause to Enron’s downfall was the systemic failure of the Securities and Exchange Commission. According to the Senate Governmental Affairs Committee, security regulators, rating agencies and investment-bank analysts all failed to

At some point, Enron executives use the deregulation of Californian energy market to raise the price of electricity, getting other company to join in action and make skyhigh profits. At the end, all these illegal, unethical actions they had done snowballed and they could not stop because once they could not hide their debts, and government institutes started to suspect, they are left with nothing to protect themselves. They took a high risk road to profit, followed a strategy of ‘win at all cost’ so it will later come back at them. Throughout company’s history, its culture had been an unethical one, with staffs from executives to accountants to associated firms having joined in their strategies and performed underhand actions. The environment was set for them to success in their scams because they brought in people and company having the same mind set. As for personal values, they executives only cared about themselves and whoever on their side. The financial executive, like Fastow even stole money from the company for himself and it was 40 million dollars. They pocketed millions of dollars so they did not pay much attention to what would happen to their employees once this scam was taken out of the dark. After Enron bankrupted, their employees had nothing in return, not even pension money and shareholders, with the stock price of the company being lower than a sing dollar, lost everything. In conclusion, what happened at

I have described the ethical and governance issues of the Enron scandal that took place in 2001. In this paper, there is information about the way things went the way it did with the Enron scandal. They hide a lot of documents pertaining to how their profits increase so rapidly. It also includes the close link Kenneth Lay had with George Bush. The investigators had some help with what happened in the scandal of Enron.

Enron was the model for rapid growth in the 1990’s but part of the culture and ethics of Enron was disturbing. Falsified documents, cutthroat competitiveness among employees and accounting schemes that hid the truth of the company’s indebtedness were just a few examples of the lack of business ethics within the organization. Perhaps a more virtuous management team could have saved Enron from collapse.

Some organizational theories could explain the Enron’s failure. Looking at the organizational structure and management of Enron, The structures were flat before the bureaucratic structure developed, then the bureaucratic structures developed in order to increase control. There were vertical structures where there was high level of control and according to theories the organizational circle is moving back to flat structure. In Enron Corporation, internally it had such a highly decentralized financial control and decision making structure that made it impossible to get a clear view on the corporations ' operations and activities. Along with a

To understand the contributing factors leading to the ethical meltdown at Enron, one must first understand the cultural norms of the organization, because, organizational culture according to Al Saifi (2015) is the centerpiece in describing and implementing the organization’s goals. Cultures according to Johnson (2015) are a combination of things that one can see and things that one cannot see, but, are in the minds, and in the form of ideas, feelings, and belief (p. 381). When an individual joins an organization, they already have a set of principles that come along with them; but, the organizational culture in which they are going tends to have a significant effect on the actions and performance of these individuals (Al Saifi, 2015). Most of the individuals involved in the Enron case are described as people who would have done exceptionally under different circumstances or in other organizational cultures (A Conversation About the Documentary 'Enron: The Smartest Guys in the Room,' 2012). However, the culture of profit making at all cost, which is the dominant culture at Enron, transformed the actions of these employees, forcing them to act unethically. Upon my evaluation of the video "A Conversation About the Documentary 'Enron: The Smartest Guys in the Room,'" I was able to identify the following elements within the culture of Enron that contributed to the moral downfall of the organization; these are the elements of greed, arrogance, and superiority.

The management of the company is obviously one of the main reason for the failure of Enron because they fooled the accounts. The first great lesson to be learned from what has happened is that the fake budget, which is already severe for unlisted companies, becomes for those listed, which can have devastating effects on the efficiency and functionality of financial markets. Then when the company started to loose, the top executives of the company, have had time to sell their shares before the crack, making huge profits.