The Rise and Fall of Energy Giant, Enron Essay - 1540 Words

The 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 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,†¦show more content†¦By late 1990’s, Enron was considered as one of the innovative companies around the world. Downfall: Though they were successful initially, their success was short-lived. When the company’s misrepresentation of its income statements and falsifying value of the equity the company shared came into limelight, the downfall begun. The downfall was huge. The company suffered heavy losses and also held liable for heavy debts. By 2001, the company filed for bankruptcy. This scandal shocked the entire nation. Moreover, it destroyed the financial life of several employees depended on the company. Most of them, who lost their job were nearing their retirement age. They lost all the benefits they earned so far then. Later, the company accepted its failure and agreed on the falsified accounts that profits that the profits were actually balanced out by loss and charges that were not recorded. Fall of stocks: The stock price fell from $90 per share to 26 cents per share in short span of two years. Because of this, the company decided to betray its employees, the pensions that these people had disappeared because most of them were invested in Enron stock. The real issue was present in Enron’s profits, as it was making none. Instead the company created the illusion that they were making a profit. When this came under limelight duringShow MoreRelatedEssay on THE FALL OF ENRON727 Words   |  3 PagesThe Fall of Enron The History Enron began as a pipeline company in Houston in 1985. It profited by promising to deliver so many cubic feet to a particular utility or business on a particular day at a market price. That change with the deregulation of electrical power markets, a change due in part to lobbying from senior Enron officials. Under the direction of former Chairman Kenneth L. Lay, Enron expanded into an energy broker, trading electricity and other commodities. The Business of Enron EnronRead MoreReasons for Enrons Business Failure1434 Words   |  6 PagesEnron - Reasons for Business Failure Abstract Various major companies in the past have witnessed unimaginable growth of their businesses, but some of them eventually had to succumb to downfall as their business models failed. Most of these businesses had been deemed as failures due to the management methods, leadership practices and flawed organizational structures. This research paper aims to focus on Enron, a large entity as a failed model of business. This would be achieved by discussing aboutRead MoreEssay on Enron975 Words   |  4 PagesThe fall of the colossal entity called Enron has forever changed the level of trust that the American public holds for large corporations. The wake of devastation caused by this and other recent corporate financial scandals has brought about a web of new reforms and regulations such as the Sarbanes-Oxley Act, which was signed into law on July 30th, 2002. We are forced to ask ourselves if it will happen again. This essay will examine the collapse of Enron and detail the main causes behind t his embarrassingRead 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 MoreThe Ethics Of Business Ethics757 Words   |  4 Pagesdecisions, and how to make ethical decisions are the guidelines for maintaining an ethical business environment. Businesses have full intentions to follow these guidelines for maintaining an ethical business. This is not always the case. Businesses fall short of these guidelines more than expected. Companies doing business in other countries are faced with a decision of whether or not to succumb to bribery. Offering, giving, asking, and receiving money or anything with value to receive anRead MoreEssay on Analysis of the Enron/Arthur Anderson Scandal1558 Words   |  7 PagesEnron and Arthur Anderson were both giants in their own industry. Enron, a Texas based company in the energy trading business, was expanding rapidly in both domestic and global markets. Arthur Anderson, LLC. (Anderson), based out of Chicago, was well established as one of the big five accounting firms. But the means by which they achieved this status became questionable and eventually contributed to their demise. Enron used what if often referred to as â€Å"creative† accounting methods, this resultedRead MoreThe Rise and Fall of Enron2970 Words   |  12 PagesThe Leadership of Kenneth Lay 5 Contributing Factors for Enron’s Debacle 7 Power Abuse 7 Fraudulent Accounting Practices 7 Employees and Board members 8 Investors Grief 9 Auditors and external regulatory agency 9 Conclusion 9 The debacle of Enron, led not only the company to bankruptcy but also its employees and shareholders. Unethical leadership and vested interests played a significant role in its imminent failure. Very few had the courage to challenge authority and leave when faced withRead MoreEnron Case2402 Words   |  10 Pages Imane Malihi Prof. Fred Friend BLW411/511 March 27, 2014 The Downfall of Enron Corporation â€Å"Ethics and integrity are at the core of sustainable long term success †¦ Without them, no strategy can work and, as Enron has demonstrated, enterprises will fail. That’s despite having some of the ‘smartest’ guys in the room.† by Richard Rudden. As the quotation states, ethics and integrity play a key role in the success of any corporation; through these principles, companies can ensure their complianceRead MoreEnron: An Ethics Case Study1834 Words   |  8 Pagesï » ¿Running head: Enron and Ethics Enron: An Ethics Case StudyEnron: An Introduction The previous decades have seen the birth and meteoric rise of several corporate giants such as Microsoft and Apple, both of which have all but become household names in this day and age. Neither achieved their level of success overnight, especially not since they have long been known to be in direct competition with each other. On the contrary, both of them have had their share of scandals and controversiesRead MoreAccounting System Failures and Enron2835 Words   |  11 PagesAccounting System Failures and Enron Introduction: The 1990s say the United States enjoying unprecedented economic growth This would be led largely by the enormous profitability experienced by swelling corporate entities and multinational conglomerates. And at the height of this period of economic dynamism, it did appear that these corporate entities were leading the charge toward a new national prosperity. Sadly, the decade immediately thereafter would prove much of this unbridled success to