The Rise and Fall of Energy Giant, Enron Essay

1540 Words 7 Pages
The Rise and fall of energy giant ‘ENRON’


The main aim of this essay is to analyse business ethics in the context of the Enron scandal. Enron scandal became notorious for violating ethical standards.
There are several business motives involved in the rise and fall of Enron. In today’s world, adopting ethical standards is a must for a company to protect shareholder’s interest. Even though the rules of playing business are obvious, still several companies adopt short cut mechanisms which work way against ethical standards. With that being said, let us take a look at the backdrop of Enron’s bankruptcy.
Birth and stardom of Enron
‘Enron’ was an American energy company formed by the merger of two pipeline companies namely, Intermonth and Houston Natural Gas (HNG) in 1985. Post-merger, Ken lay, 42 year old chairman of HNG became the CEO of Enron. Each division of the company later operated autonomously. The employees were given the freedom to determine their own bonus and salary plans. Immediately after becoming CEO, Lay hired Mckinsey and co to create an innovative financial product. By 1992, Enron became the North America’s largest seller of natural gas. Moreover, its gas contracts had an EBIT of $122 million, which was the second most contributors to the company's net income. In November 1999, Enron created Enron Online, a trading website to handle its trading business in a better way.
Post that, Enron diversified its business in variety of fields. The…

More about The Rise and Fall of Energy Giant, Enron Essay