Enron 's Culture Project : Enron

1589 WordsFeb 23, 20177 Pages
Miranda Vehlewald Enron Ethical Culture Project Part 1: Enron’s Culture Enron started out as a dominant culture. Kenneth Lay and Jeffrey Skilling had a vision of how they wanted the company to be and where they wanted it to go. When Lay put Skilling in charge, he made it his mission to hire the best traders, recruiting them from the best schools and other companies. They gave employees corporate rewards like concierge services and a company gym. As the company grew larger, the culture began to take a turn for the worse. Enron demonstrated a few cultural dimensions such as high risk-taking, outcome orientation, and aggressiveness. Skilling established the Performance Review Committee which was an extremely harsh ranking system. It was…show more content…
With the rating system, employees were so paranoid about losing their jobs, that they made any kind of deal they could to post earnings, even if it was only beneficial in short term. They began to turn their backs on each other through increased secrecy and competitiveness. With mark-to-marketing accounting, Enron created the markets that determined the values of their assets. When Enron signed contracts, they immediately reported their estimated earnings and made up numbers. Skilling and Fastow overestimated asset values so it was more attractive in the market, bringing in more earnings. When Andrew Fastow became in charge of the SPEs, things got more complicated and he began to use them in an unethical manner. He used SPEs for assets that were falling in value so they could be kept off Enron’s books. He began to run controversial SPEs himself, which paid him millions of dollars in management fees. He also went against accounting principles when he increased notes receivable and shareholders’ equity. At the beginning of Enron’s existence, ethics and integrity were important to the company. They had a code of ethics and mentioned integrity as one of their principles of human rights. That began to change when Ken Lay hired Jeff Skilling to be put in charge, who in turn hired Andrew Fastow. Skilling and Fastow were only concerned about
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