Enron's Scandal Of Corporate America

1713 Words Jul 2nd, 2016 7 Pages
Enron had been the darling of corporate America: it was voted its most innovative company, adviser to US Government, a Fortune 500 top ten player, backed by the world’s biggest banks and rated by the top market analysts (Tonge, Greer, & Lawton, 2003). While it is shocking to hear about ethical scandals from big corporations, this paper discusses the major reasons and lessons learnt from Enron’s scandal. Enron’s scandal wasn’t caused by few “bad apples” but the organization’s culture, as set by Enron’s leadership, was the main driving force toward unethical behavior (Kulik, O 'Fallon & Salimath, 2008). However, it didn’t take one party to destroy this great structure; many parties were responsible for it starting with its leadership, then its auditors, and the entire US financial system that consequently learnt the lesson and have made major changes that seem to be effective nevertheless continuous follow up and close monitoring is still necessary to avoid having another Enron in the future.
Factual Background
Formed in 1985 from a merger of Houston Natural Gas and Internorth, Enron Corp. was the first nationwide natural gas pipeline network. Over time, the firm’s business focus shifted from the regulated transportation of natural gas to unregulated energy trading markets (Jickling, 2002) which was perceived to be innovative outstanding business strategy that increased profits by about 90 billion over 10 years (Jickling, 2002). Enron leaders were crazy about generating…
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