Why Enron Failed So Miserably

1119 Words Jan 13th, 2016 5 Pages
The reason Enron failed so miserably was due to the failure to meet the important ethical challenges and dilemmas in its corporate environment, the majority of the liability falls upon Kenneth Lay, the company founder, chief financial officer Andrew Fastow and Kenneth Lay’s successor Jeffrey Skilling.
Enron’s CEO Mr. Lay failed to act responsible and also take necessary action, like for example when Fortune reporter Bethany McClean started inquiring about the validity of the financial reports provided by Enron, likewise with Jim Chanos, of Kynikos Associates also questioned the validity of the profits made by Enron despite their operating margins were very low and asked as to why Enron hadn’t provided a balance sheet to Mr. Skilling, during a conference call, both of these instances were downplayed by Mr. Lay and Mr. Skilling as being unethical and even going as far as verbal abuse to any criticism.
Another factor that has to be taken in consideration is the relationship that Enron had with both of its employees and external stakeholders was riddled with inconsistencies. Top executives were paid £55 million in bonuses though on the other hand average employees were forced to invest their retirement plans in Enron’s stock and then during pivotal moments when the stock was in free fall, they were prohibited to selling their shares, thus ultimately led to loss of $2 billion pension fund due to false assumption of the true value of Enron’s stock, these…

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