The Downfall of Enron - 1573 Words

Enron: The fallout from the accounting scandal Determine the primary factors that contributed to the downfall of Enrons financial practices Corporate managers are expected to maximize investor returns while complying with regulatory standards, avoiding principal-agent conflicts of interest, and enhancing the reputational capital of their firms (Patrick Shearer 2002). Before its demise, the energy company Enron was envied for its burgeoning balance sheets. However, gradually it emerged that its profits were based in sand. Through the use of creative accounting, Enron mislead shareholders, employees, regulators, and the media about its financial solvency. A combination of aggressive accounting, off-balance-sheet deals and brow-beating of employees and advisers, allowed Enron management to create a virtual company with virtual profits (Hill, Chaffin, Fidler 2002). For example, Enron bolstered profits by booking income immediately on contracts that would take up to 10 years to complete, quite literally counting its chickens before they hatched (Hill, Chaffin, Fidler 2002). In fact, many of these contracts were highly spec ulative, given that they were dependent upon the assumption that the energy market in the state would be deregulated something for which Enron had no assurance. In those cases, Enron forecast when the states would deregulate those markets and then projected what prices would be under the currently nonexistent deregulated market (Norris Show MoreRelatedThe Downfalls Of Enron, By Han, Henry959 Words   |  4 PagesThe key factors or critical issues presented in the case are the downfalls of Enron, which originated out of Houston Texas by Han, Henry(n.d.). He was one of the highest paid Chief Executive Officers in 1999. This organization was aware of the first gas pipeline company that implied known worldwide. The company covers the world’s leading electricity innovations, personnel management, and risk management processes. Also, further studies the company s dramatic failed complex issues that the forcedRead MoreEssay about The Downfall of Enron1734 Words   |  7 Pagesprop er ethics, it is representing not only itself in a positive manner, but its partners, shareholders, and clients as well. On the other hand, when an organization partakes in unethical activities, all parties are negatively affected. The collapse of Enron is a major case of unethical conduct in the corporate world, because the circumstances surrounding the firm’s chaotic plunge where so scandalous that it left â€Å"creditors wrangling over Enrons skeletal remains† (Helyar) long after the company had seenRead MoreEnron And Its Impact On Enron s Downfall Essay1492 Words   |  6 PagesAbstract recent collapses of high profile business failures like Enron,Worldcom,Parmlat,and Tycohasbeen a subject of great debate among regulators, investors, government and academics in the recent past. Enron’s case was the greatest failure in the history of American capitalism and had a major impact on financial markets by causing significant losses to investors. Enron was a company ranked by Fortune as the most innovative company in the United States; it exemplified the transition from the productionRead MoreOrganizational Culture : The Smartest Guys Of The Room1649 Words   |  7 Pagesorganization’s core values are both intensely held and widely shared. After viewing Enron: The Smartest Guys in the Room, it is obvious that Enron had not only an organizational culture that was strong, but one that was extreme and aggressive. This aggressive and strong organizational culture discouraged both teamwork and ethical behavior and in the end it only plagued Enron until it eventual ly collapsed under its downfall. The aggressive organizational culture started with Enron’s founder, Ken Lay, andRead MoreThe Rise and Fall of Energy Giant, Enron Essay1540 Words   |  7 PagesThe Rise and fall of energy giant ‘ENRON’ Introduction: 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 mechanismsRead MoreEnron Case : An American Energy Company1604 Words   |  7 PagesENRON CASE Introduction â€Å"Organizational behaviour is a field which deal with the study of human behaviour with respect to individuals, structure and group of organization† (kinicki 2012). The study of organizational behaviour came in to importance to have an positive effect to the organization. The reflective essay focuses on the organizational behaviour concepts which lead to the downfall of Enron Company on 2001. Enron is an American energy company which is based on Texas. The company was run byRead MoreThe Collapse Of Enron And Enron1365 Words   |  6 PagesTwo organizations that will live on in infamy in the business world are World Com and Enron. These names are synonymous with the largest corporate scandals in US history. Their failure to live by ethical and moral codes resulted in bankruptcy, large financial losses to employees and shareholders as well criminal penalties. Additionally, these deviations from ethical behavior from several related parties shined a light on the account ing profession and resulted in several changes in the industryRead MoreJaclyn Givens. Kathy Osburn. Management 101. 5/8/17. The1400 Words   |  6 PagesJaclyn Givens Kathy Osburn Management 101 5/8/17 The Enron Era â€Å"Just as character matters in people, it matters in organizations,† says Justin Schultz, a corporate psychologist in Denver. The Enron scandal had a big exposure in 2001 confirming the big secret to the increase in billions. In July 1985, Enron formed the merger of Houston Natural Gas and Omaha-based Inter North. The Enron corporation was an American energy company based in Houston Texas. The corporation’s catastrophe in 2001 signifiesRead MoreEnron : The Leading Factor That Had Enron Into Its Demise Essay1608 Words   |  7 PagesThe leading factor that had Enron into its demise revolves around the notion that, â€Å"companies are often so concerned with appearance and damage control that they are unwilling to engage in the degree of examination required to root out the entrenched causes of trust violations† (Hurley, Gillespie, Ferrin Dietz, 2013). The historical performance of Enron’s rising share prices, coupled to the constant positive media at tentions, only added fuel to the fire in terms of Enron’s competitive culture.Read More Deception, Fraud, and the Collapse of Enron Essay1394 Words   |  6 Pagesand the Collapse of Enron Introduction From America’s 7th most valuable company in December 2000, to a company in ruins by early 2002, Enron has been involved in one of the most incredible reverses of fortune ever. With shares riding high on Wall Street at $84.87 on the 28th December 2000, and awards such as â€Å"America’s most innovative company† from Fortune Magazine 6 years running, and â€Å"Energy Company of the Year† from the Financial Times also in 2000, it looked as though Enron were promising to