The Failed Corporate Culture of Enron - 4805 Words

The Failed Corporate Culture of Enron High risk accounting, inappropriate conflicts of interest, extensive undisclosed off-the-books activity, excessive compensation Ââ€" these are some of the headings of the report prepared by the U.S. Senates Permanent Subcommittee on Investigations titled The Role of the Board of Directors in Enrons Collapse. (Permanent Subcommittee on Investigations, 2002) In February, 2002, Enrons former Chief Executive Officer Jeffery Skilling had testified before members of the Senate Commerce, Science and Transportation Committee that Enron was a financially sound company the day he resigned in August 2001, just months before the companys financial implosion. But the Enron debacle has, as the Houston†¦show more content†¦The winners have been consumers, who have paid lower prices, and investors, who have seen competition force the power suppliers to become much more efficientÂ…. Under the old regulated model of delivering gas and electricity, customers were offered a one-size-fit s-all contractÂ…. Enron pioneered contracts that could be tailored to the exact needs of the customer. To do this, Enron unbundled the classic power contract into its constituent parts, starting with price and volume, location, time, etc., and offered customers choices on each one. Again, consumers won. Enrons investors did too, because Enron earned the surplus typically reaped by inventors. Arguably, Enron is the embodiment of what economist Joseph Schumpeter called the process of Creative Destruction. But creative destroyers are not necessarily likable, pleasant folks, which may be part of Enrons problem today. (Bodily and Bruner, 2001) Skilling has been described as Enrons chief visionary, head cheerleader, and internal compass, a brilliant strategist and creator of the in-your-face Enron culture. At the same time, many inside the corporation thought him a terrible manager, impulsive and immature. Touting the value of intellectual capital over solid assets, Skilling sought to imbue the 250 or so young MBAs Enron hired each year with the belief that they were the best and that they were on a mission to open markets across the globe in the face of entrenched,Show MoreRelatedThe Corporate Culture Of Enron1474 Words   |  6 Pagesthe corporate culture of Enron contribute to its bankruptcy? The Enron Corporation was an energy trading and utilities company that eventually failed due to the discovery that Enron was hiding large debts and losses in financial documents. â€Å"Through its subsidiaries and numerous affiliates, the company provided products and services related to natural gas, electricity, and communications for its wholesale and retail customers† (Ferrell, Fraedrich Ferrell, 2015, p. 486). A company’s corporate cultureRead MoreUniversity of Phoenix Organizational Culture1133 Words   |  5 PagesOrganizational culture can be defined as the system of attitudes, beliefs and values that are collectively expressed in support of organizational structure. Organizational culture is a pattern of shared basic assumptions that dictate the behavior of individuals within an organization. Culture determines which practices are appropriate and which are not, effectively developing standards, guidelines, and expectations for individuals within an organization. Although they work hand in hand, there isRead MoreEnron : The Leading Factor That Had Enron Into Its Demise Essay1608 Words   |  7 Pagesfactor that had Enron into its demis e 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 attentions, only added fuel to the fire in terms of Enron’s competitive culture. As a consequenceRead MoreWhy Enron Failed So Miserably1119 Words   |  5 Pages Analysis 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 financialRead MoreFailure Of Responsible Management : Enron Corporation1645 Words   |  7 Pageswhich failure of responsible management. The Enron Corporation is an example, because Enron event is the typical case for organization failure of responsible management In the end of 2001, Enron scandal has been disclosure, Enron stock prices slumped, and its financial tricks was exposed. The Securities and Exchange Commission (SEC) began survey of company s records. Enron’s auditor ‘Arthur Andersen ‘destroys relevant documents. (Ailon, G. 2011) Enron was bankruptcy in December 2001, and became theRead MoreEnron Scandal Reaction1483 Words   |  6 Pages The documentary film, Enron: The Smartest Guys in the Room It is a story about the greed in corporate America  that is always exposed after the fact. The  film examines the 2001 collapse of Enron.  At the time of the collapse, Enron  was the largest bankruptcy in history. The Enron story is one of money  and politics, which are two areas that embody the culture of big business in America. The film does a great job  of illustrating the laissez-faire culture that allowed Enron to rise to  prominence whileRead MoreWhy Enron Collapsed?1143 Words   |  5 PagesWhat are the reasons why Enron collapsed? * Investments Enron dealt in energy. According to Infinite Energy, the first and main cause of Enrons collapse was failed investments. Enron invested money in fiber-optic networks, a power plant in India and water distribution in the United Kingdom, to name a few. While a company the size of Enron could afford occasional losses, the mounting, failed investments added up and created a plethora of debt. * Hidden Losses Infinite Energy states thatRead MoreCorporate Culture Of Enron And Bankruptcy1327 Words   |  6 PagesIntroduction The case study is about Enron and about their biggest failure that lead the company towards bankruptcy. Enron got bankrupt to the extent that was no point of returning back and reversing its wrong doings. The only thing that the company had to think about was how to return the losses of its creditors. Enron Corp. was left with $12 billion in assets which was to be distributed among more than 20,000 creditors. Around 80% of creditors of Enron backed the long-awaited reorganization planRead MoreEssay on Enron: Questionable Accounting Leads to Collapse705 Words   |  3 PagesENRON: QUESTIONABLE ACCOUNTING LEADS TO COLLAPSE CRYSTAL RUFF GLOBE UNIVERSITY ABSTRACT This paper summarizes the article listed in reference that reported on the demise of Enron and the contributing factors that led to the financial downfall of a great company. The roles of the corporate culture, Enron’s financial staff, and even the chief financial officer are all to blame for the events that lead to the finality of the company that resulted in bankruptcy. While Enron boasted aboutRead MoreThe Organization Behaviors Of Enron Essay1390 Words   |  6 PagesThe Organization Behaviors of Enron Introduction Enron is considered America’s largest corporate failure in history and is a story about greed, fraud, and human tragedy. In 1986, Houston National Gas and Internorth, a natural gas pipeline company, merged to create Enron with Ken Lay as the chair and chief executive officer (CEO). Lay transformed the company into a high tech global operation that traded water, energy, broadband, and electricity. In less than a year, problems arose of fraud and