Enron Research Paper

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 appeared to be a successful and innovative company, but in reality was a company rooted in an organizational culture of corruption and greed. The five culture dimensions of stability, risk taking and innovation, attention to detail, outcome orientation, and aggressiveness are key to understanding how unethical behavior became such a problem at Enron.

The word “fraud” was magnified in the business world around the end of 2001 and the beginning of 2002. No one had seen anything like it. Enron, one of the country’s largest energy companies, went bankrupt and took down with it Arthur Andersen, one of the five largest audit and accounting firms in the world. Enron was followed by other accounting scandals such as WorldCom, Tyco, Freddie Mac, and HealthSouth, yet Enron will always be remembered as one of the worst corporate accounting scandals of all time. Enron’s collapse was brought upon by the greed of its corporate hierarchy and how it preyed upon its faithful stockholders and employees who invested so much of their time and money into the company. Enron seemed to portray that the goal of corporate America was to drive up stock prices and get to the peak of the financial mountain by any means necessary. The “Conspiracy of Fools” is a tale of power, crony capitalism, and company greed that lead Enron down the dark road of corporate America.

Many practices that demonstrated the domination of social control were present in the Enron case. The earliest scandal of the company was the oil scandal of 1987. An auditor manipulated earnings and gambled, however, when these digressions were presented to the board, trader’s were neither fired nor disciplined, and were even encouraged to “please keep making us millions” which established the notion of valuing money above all else within the company's culture. Ken Lay even asked how much he would lose if he had fired the rogue traders, no matter the legality of their actions. Values are derived from social contexts and clear signals from management, such as the failure to punish an employee for a particular action. (O’Reilly and Chatman 171) Therefore, when management signaled the company’s core value, the employees listened.

The story of Enron is truly remarkable. As a company it merely controlled the electricity, natural gas and communications sectors of the world. It reported (key word, reported) revenues over one hundred billion US dollars and was presented America’s Most Innovative Company by Fortune magazine for six sequential years. But, with power comes greed and Enron from its inception employed people who set their eyes upon money, prestige, power or a combination of the three. The gluttony took over sectors which the company could not operate proficiently nor successfully.

According to Johnson (2012) leaders are powerful role models, and policies will have a little effect if leaders do not follow the rules they set. In Enron case, corruption and ethical misconduct were deeply embedded in their business culture where profitability was more important than ethics. In this paper, I will address the factors that had led to the development of the culture of profit before principle at Enron. Also, I will create my personal code of ethics that will guide me in my professional and personal decision making and doing the right thing when faced with ethical challenges.

Enron’s ride is quite a phenomenon: from a regional gas pipeline trader to the largest energy trader in the world, and then back down the hill into bankruptcy and disgrace. As a matter of fact, it took Enron 16 years to go from about $10 billion of assets to $65 billion of assets, and 24 days to go bankruptcy. Enron is also one of the most celebrated business ethics cases in the century. There are so many things that went wrong within the organization, from all personal (prescriptive and psychological approaches), managerial (group norms, reward system, etc.), and organizational (world-class culture) perspectives. This paper will focus on the business ethics issues at Enron that were raised from the documentation Enron: The Smartest Guys

Headquartered in Houston, Texas, Enron was one of fortune 500 top companies ranking in at number 7 by 2000. During their 7 year tenure, Fortune named Enron one the Most Innovative companies 6 of those 7 years. Enron is known for its Natural gas and Electricity expanding a total of 36,000 mile radius. Enron formed as a merger of two companies. Houston Natural Gas, which concentrated on its production and exploration of gas to retail businesses during 1976 and by 1984, Houston Natural Gas, had reached sale and assists totaling a whopping $5.7 billon with profits of $123 million dollars. Formally known as Northern Gas Company back in 1930, the other merger was InterNorth. Northern Gas Company originated in Omaha, Nebraska. The merge begin when,

Enron’s ride is quite a phenomenon: from a regional gas pipeline trader to the largest energy trader in the world, and then back down the hill into bankruptcy and disgrace. As a matter of fact, it took Enron 16 years to go from about $10 billion of assets to $65 billion of assets, and 24 days to go bankruptcy. Enron is also one of the most celebrated business ethics cases in the century. There are so many things that went wrong within the organization, from all personal (prescriptive and psychological approaches), managerial (group norms, reward system, etc.), and organizational (world-class culture) perspectives. This paper will focus on the business ethics issues at Enron that were raised from the documentation Enron: The Smartest Guys

As Bethany McLean and Peter Elkind portray in The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, there was a chain-reaction of events and a hole that dug deeper with time in the life-span of, at one time the world's 7th largest corporation, Enron. The events were formulated by an equation with many factors: arbitrary accounting practices, Wall Street's evolving nature and Enron's lack of successful business plans combined with, what Jeff Skilling, CEO of Enron, believed was the most natural of human characteristics, greed. This formula resulted in fraud, deceit, and ultimately the rise and fall of Enron.

The corporate culture in Enron was poor, and had a direct influence on its management acting unethical. Enron’s destruction will be looked at through the lens of consequentialist, deontological and virtue ethical frameworks. The main point of reference for this essay is the documentary “Enron: The Smartest Guys in the Room”. In a Consequentialist ethical framework, decisions are made based on the results or punishments outweighing the costs (MAGILL 2017).

With Enron, the responsibility and blame started with Enron’s executives, Kenneth Lay, Jeffrey Skilling, and Andrew Fastow. Their goal was to make Enron into the world’s greatest company. To make this goal a reality, they created a company culture that encouraged “rule breaking” and went so far as to “discourage employees from reporting and investigating ethical lapses and questionable business dealings” (Knapp, 2010, p. 14). They insisted the employees use aggressive and illegal

1.     Ken Lay served as CEO and chairman and Jeffrey Skilling also served as CEO. They both were responsible for planning, organizing, controlling and leading the company. They set goals for the company and organized how they would be achieved. Kay’s role was as the figurehead and the leader. He also served as the spokesperson for the company and made many of the decision on the future of the company. As CEO’s they both possessed effective communication skills, where decisive, which was evidenced by their vision for the company and refusal to admit wrong even at the end, and visionary. Throughout Lay’s tenor the company continued to grow and prosper at a fast

Enron Corporation was an energy company founded in Omaha, Nebraska. The corporation chose Houston, Texas to home its headquarters and staffed about 20,000 people. It was one of the largest natural gas and electricity providers in the United States, and even the world. In the 1990’s, Enron was widely considered a highly innovative, financially booming company, with shares trading at about $90 at their highest points. Little did the public know, the success of the company was a gigantic lie, and possibly the largest example of white-collar crime in the history of business.

Through history there are men who choose to do great things among their fellow men. On the contrary their men who abuse the positions they hold and take advantage of those around them. Scandals such as Enron, give us the ability to learn from and make the proper implications we need to avoid accounting frauds. We will evaluate Enron: who was involved, the signs of the scandal and the consequences.

Enron is a very much reported story and a decent case to show how ethics drives a culture that pushes ethical limits and the components of good corporate governance. On December 2, 2001, the organization filed for bankruptcy protection is the biggest case of bankruptcy in the United States. This case also, shows just how much greed and dishonesty can lead someone even an organization to go against their own mission, vision, and values. The Enron Code of Ethics and its foundational values of respect, integrity, communication, and excellence obviously did little to help create an ethical environment at the company. In this editorial, the details of Enron’s case were reviewed and the major ethical issues involved in Enron’s scandal were analyzed. After analyzing the case various ethical violations were found, also, how perceptions can lead to great loss of financial stability. In the consequences of Enron’s bankruptcy filing, numerous Enron executives were charged with criminal acts, including fraud, money laundering, and insider trading. Additionally, many top organizations lost their reputation, faced fines and lawsuit, in helping Enron cover up their dirty