Enron And Its Innovative Growth

Good Essays

Natanel Tzion
Professor Hershkowitz
Auditing 301
January 7, 2017

Enron Scandal
• The rise of Enron and its innovative growth:
After a merger in 1985, between two relatively small regional companies Houston Natural Gas Co., and InterNorth Incorporated, Enron Corp was formed. Enron Corporation became one of the biggest energy, and service company across the united states. Following this merger, Kenneth lay, who was at the time the CEO of Houston Natural Gas, also became the CEO of the newly formed Enron Corp. With his savvy skills already adopted in the smaller regional natural gas company, Kenneth Lay, was ready to label Enron into the energy trader and supplier powerhouse. This dream of turning Enron into natural gas resource was …show more content…

The first of these improvements was that Enron invested in over seas companies. The main target of investment was overseas energy companies. The second strategy of maximizing profits was the shift from energy, to being known as a company which acted as an investment firm. This operation was headed by Jeffrey Skilling who went to Southern Methodist University, and received his MBA from Harvard University. He had a great touch when it came to business. He was able to run these operations by making profits from certain products Enron traded, and these products were traded through what was mentioned above the “gas bank”. Seeing success in these operations, Skilling looked to expand Enron Capital & trade department and did so by hiring Andrew Fastow, who became one of the key figures in Enron off Balance sheet special purpose Entities.
After the merger, seeing that Enron is running with growing profits, Enron decided to take its first hack at an overseas company. This company was based in England and was commonly known as the Natural Gas Power Plant, which at the time provided electricity to up to 3% of England’s electricity demands. After the acquisition in England, Enron co. expanded its assets overseas to countries such as Brazil, Bolivia, Germany, France, Turkey, and many more. These locations were the newly developed division named Enron International which began its operations. These divisions were growing in rapid pace

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