Enron, the natural gas provider turned trader of natural gas commodities and in 1994, electric, was once touted as the seventh largest company in America. Kenneth Lay, founder, began changing Enron from just a provider into a financial energy powerhouse. Lay took advantage of the dot-com boom of the late 1990’s by creating Enron Online, an internet trading platform. Internet stocks were valued at astronomical prices and were all the rage on wall street, who accepted the increasing prices as normal
The collapse of Enron was entirely related to the accounting practices adopted by the company. It is a number of these questionable, and in some cases straight out fraudulent, accounting practices that pertained to the most dramatic collapse of a major company in years. An analysis of some of these accounting practices brings to light the problems with the use of concepts such as mark-to-market accounting and the use of special purpose entity’s (SPE’s). To say that the collapse “seemed to be a
Introduction The book The Smartest Guys in the Room describes the Enron fraud case. Enron, the Houston-based energy trading company committed systematic fraud over the course of several years before finally being subject to investigation. Ultimately, the company was shut down and the principals were prosecuted. There is, in essence, no real ethical dilemma in the Enron case. A true ethical dilemma would have a "dilemma" component, whereas Enron was outright criminal behavior from the outset. Nevertheless
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
ENRON Corporate Culture Q1: Analyse the corporate culture at Enron and its management’s behaviour. Include in your analysis, the normative theory of ethics which you would consider most relevant in driving the decision making at Enron. Enron began by merger of two Houston pipeline companies in 1985, although as a new company Enron faced a lot of financial difficulties in the starting years, though the company was able to survive these financial problems (Enron Ethics, 2010). In 1988 the deregulation
purpose behind a code of ethics is to clarify a company or a profession’s policies, values, and priorities. These clarifications convey to others the behavior and conduct customers, stakeholders, and employees can expect from the organization. In the case of employees, it also sets standards that the employer expects the employee to reflect and uphold. As David Hildebrand stated in an article in the Canadian Appraiser, “Codes of ethics should set members apart from others, who may purport to provide
Enron: [Don’t] Ask Why During the year 2000, Enron was exceeding all expectations, its stock was through the roof, and the company seemed to be on top of the world. The next year Enron declared bankruptcy. So how did a company rise and fall so quickly? The key in analysing this question lies in Enron’s organizational culture, which is defined as “a shared meaning held by members distinguishing an organization” (Robbins and Judge, Essentials of Organizational Behavior, 269). During its prime
Enron, The Shadiest Guys In the Room When you ask young people about the Enron scandal today, most of them have not even heard of it. The fact of the matter is, it is very relevant to young professionals today. Enron is the most recent story of classic Wall Street greed and fraud. However it is still argued today by different stakeholders who are is responsible. This essay will take the viewpoint from multiple stakeholders to use the Enron Scandal as an example to further explain American corporate
Culture of Enron Before Enron bankruptcy it was one of America’s most powerful and successful energy companies. The company thrived and pushed to be number one no matter the circumstance, in this company’s case if it meant doing it illegally. Fraud accounting, auditing, energy trading, and illegal finance was the company’s downfall leading to corruption and most of all greed. Enron was aggressive and a competitive environment. The documentary was just not giving the name “The Smartest Guys in the Room
1. How did the structure of Enron impact the human behavior of those who were employed by the company? The organizational structure of Enron was a calculated one with a clique that was thought as being the “smartest” guiding the rest of the workers. It included Kenneth Lay: Chairman, and Chief executive officer, Jeffrey Skilling: President, Chief operating officer, and CEO (February–August 2001), and Andrew Fastow: Chief financial officer. With the leaders known to be wise and smart, the workers