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Enron was the rising star of Wall Street. Its rise was meteoric and its fall was even more spectacular. Started in 1985 as a pipeline company in Houston, TX but under the tutelage of Chairman Kennith Lay and Chief Executive Officer Jeff Skilling soon grew to be a power house of energy trading and eventually expanded to include broad band technology, paper products, weather and other unrelated businesses. In 2001 the rising star was in trouble. Stories of mismanagement and poor accounting principles started to circulate and public confidence crumbled. One might ask why, what brought about Enron’s collapse? The down and dirty answer is poor management, corrupt upper management, and conventional business and accounting practices were responsible for the fantastic rise and fall of the energy giant. This statement describes the root cause of the downfall but far more detail is needed to really understand the whole story.
Enron started as a pipeline distributor of fuel in Houston TX. After deregulation of electrical power markets Enron expanded into an energy broker, trading electricity and other commodities. The company soon became the “middle man” or the broker between the wholesaler and the reta
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Below are additional random excerpts from the paper...
Much of the blame for the corruption is being laid on Ken Lay and Jeff Skilling but mass corruption of this scale cannot be done in a vacuum. Blame cannot be laid on the lower workers at Enron because of a system of decentralization and competition between the different sections of the organization. Many employees said they saw problems at the company but thought they were limited to their divisions.
Before Jeff Skilling took over the policy had been one of conservative cash outflow. After his rise to CEO the standard was “take profits now and worry about details later.” He “didn’t care about expenses or cash flow as long as revenue increased and margins looked good.” This led to a bonus program that was paid when the deal was cut not when profit was actually made. Many dealmakers gave into the temptation to over inflate projected income increasing their bonuses.
Later in 1996 when Jeff Skilling became CEO the pressure to succeed became even more intense. He instilled a rating system that pitted employees against each other creating a atmosphere of intense competition and the need to succeed at all costs including back stabbing fellow employees and inflating potential profits. This need to succeed fostered an atmosphere of elitism where the dealmaker was not a success unless they were “aggressive and ruthless”.
Some topics in this essay:
Jeff Skilling,
Ken Lay,
Houston TX,
Author Anderson,
Skilling CEO,
Mark Market,
Andrew Fastow,
ENRON CULTURE,
Wall Street,
jeff skilling,
Board Directors,
ken lay,
rising star,
ken lay jeff,
lay chief executive,
executive officer,
houston tx,
lay chief,
chief executive,
executive officer jeff,
cash flow,
officer andrew fastow,
leadership organization,
chief executive officer,
andrew fastow,
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Approximate Word count = 942
Approximate Pages = 4 (250 words per page double spaced)  |
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RELATED ESSAYS |
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Enron Was the failure of Enron the outcome of corporate megalomania (and if so what induces it?) or the consequences of wider political and economic factors? .... |
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Enron In 2001 Enron Corporation, energy and commodities trading company, became the largest company ever to file for Chapter 11 bankruptcy protection. .... |
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Enron The fall of Enron has forced many businesses to rethink their strategies on reporting their finances. Additionally, due to the variety .... |
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Enron The Enron scandal was the largest corporate financial scandal ever when it emerged. The effects of the scandal can still be felt rippling through the economy. .... |
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Enron Kenneth Lay, the ex-CEO of Enron took a small natural gas company, and created a financial powerhouse. In just a little over 15 .... |
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Enron .... Incorporation. With the merger they both combined to own around 40,000 miles of pipeline and shortly after they changed their name to Enron. .... |
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PROFESSIONAL ESSAYS |
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Enron: What Happened? Enron: What Happened? Recently The first question focuses on what happened to bring about Enron's collapse and bankruptcy. Enron's |
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The Enron Collapse Enron Corporation was once one of the world's largest electricity and natural gas traders. Enron filed for Chapter 11 bankruptcy |
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AGGRESSIVE ACCOUNTING, BIAS IN AUDITING AND ENRON AGGRESSIVE ACCOUNTING, BIAS IN AUDITING AND ENRON INTRODUCTION Accounting is sometimes called the "language of business". Accounting |
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ENRON: HOW THE COMPANY GOT INTO TROUBLE ENRON: HOW THE COMPANY GOT INTO TROUBLE THROUGH UNETHICAL PRACTICES Introduction The Enron case was a daily staple of television news for several weeks in 2002 |
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Decision Making at Enron LEGAL AND EXECUTIVE DECISION MAKING AND FALLOUT AT ENRON There is enough blame to go around concerning Enron's collapse. The major |
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Managerial Ethics: The Case of Enron The recor Managerial Ethics: The Case of Enron The record bankruptcy of giant energy firm Enron was a landmark failure of corporate governance, a failure shared by |
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