Essay about Enron: the Smartest Guys in the Room

Words: 1843
Pages: 8
Open Document
The purpose of this paper is consider three possible rationales for why Enron collapsed—that key individuals were flawed, that the organization was flawed, and that some factors larger than the organization (e.g., a trend toward deregulation) led to Enron’s collapse. In viewing “Enron: The Smartest Guys in the Room” it was clear that all three of these flaws contributed to the demise of Enron, but it was the synergy of their combination that truly let Enron to its ultimate path of destruction.
As in any organization, the executives ultimately drive company policy, practices and accepted behavior. The three key executives that led Enron down its fatal path were, Ken Lay, Jeff Skilling and Andy Fastow. Like most successful leaders they …show more content…
Even if this justification was not enough, Fastow, much like Ken Lay, could have used another rationalization from Gellerman. He most likely believed that since it was signed of on by the board and their accounting firm that the activity was within reasonable ethical and legal limits and that it was not “really” illegal or immoral.
With their own improprieties being internally justified, Lay, Skilling and Fastow paved the way for immoral behavior to run rampant throughout Enron. This resulted in associates at all levels approving of, and even modeling the behavior of their so called leaders. This created a flaw in the organization which contributed to furthering already great problems at Enron.
As with any company large or small, culture and ethics are shaped from the top down. Their adventuresome excursions hammered home the point that Jeff Skilling and Andy Fastow were risk takers. This risk taking behavior seeped into the very soul of Enron. It was no more evident than with the traders. Specifically, the company showed its employees that risk taking behavior was valued and would be rewarded. The traders took this idea and ran with it. Whether it was trading beyond their approved thresholds or creating artificial circumstances so they could have “arbitrage opportunities”, the traders did whatever was needed to make sure Enron’s stock price and their own wallets continued to
Show More

Related Documents: Essay about Enron: the Smartest Guys in the Room

Enron: The Smartest Guys In The Room

I watched both videos, but just a note: Enron: The Smartest Guys in the Room is on Netflix if you would like to watch a better quality video. There are a lot of "interesting" things about the Enron story, and I probably wouldn't use the word "interesting," "horrifying" seems like a better word. First, I cannot wrap my mind around the "mark to marketing" accounting concept. I am horrified that they were able to bank profits for an idea before they actually made any profits. Jeff Skilling did not…

Words 283 - Pages 2

Enron: The Smartest Guys In The Room

Enron: The Smartest Guys in the Room Enron's political impact was unprecedented. The CEO is a close personal friend of President George W. Bush, and his biggest campaign contributor. Enron officials clustered with Vice President Cheney to help compose the National Energy Policy. Enron made a mark in the market by getting paid in billions for ideas without realities. They were so unrealistic that even the CEO of the company made fun of the stocks for future ideas. The breakdown had numerous reasons…

Words 472 - Pages 2

Smartest Guys In The Room

Tarun Aswani Smartest Guys in the Room Essay The Enron scandal took a toll not only on the victims within the corporation, but on business and ethical operating procedures in general. At first, this scandal being with suspicious trading on oil market stocks. Enron founder, Ken Lay, wholeheartedly denies knowledge of these gradings after Enron’s reserve funds are depleted. This was the beginning on a slippery slope of wrongdoings by Lay. To cover up for himself, he cleared house of the illegal…

Words 346 - Pages 2

MGT1721 Films And Writing Assignment 1 Essay

period. Also look for other Financial Accounting aspects presented throughout the film. Enron: Smartest Guys in the Room This film can be accessed through a link posted to Blackboard. While watching this film, please pay special attention to the ethical issues presented and how accounting played a major role in the fraud that occurred at Enron. What were the consequences of this fraud? Enron: Bigger than Enron This film is on reserve under my name (Delano-Dykas) at the library circulation desk.…

Words 316 - Pages 2

The Smartest Guys In The Room By Bethany Mclean And Peter Elkind

Final Paper I have selected the non-fiction book named ‘The Smartest Guys in the Room’ written by Bethany McLean and Peter Elkind. The book is based on the The Amazing rise and Scandalous fall of the Enron Corporation. Enron Corporation was an American energy, commodities and service company based in Houston, Texas. Before its bankruptcy in December 2, 2001, Enron employed more than 20,000 employees and was one of world’s major electricity, natural gas, communications and pulp and paper company…

Words 3308 - Pages 14

Marketing Strategy Essay

Marketing Strategy Enron - The Smartest Guy in the Room Enron was once the seventh largest company in the world, they were even featured in fortune magazine as America’s most innovative company for six years in a row from 1996 to 2001, but somehow they allowed their greed and arrogance to get the better of them. Though they have been successful for many years, it took very little time for them to go bankrupt. Enron’s demise is a result of implementing outrageously unethical and unrealistic strategies…

Words 384 - Pages 2

Ethics In Marketing Essay example

lucrative unethical policy. One glaring example of this was the collapse of ethics at the corporate giant Enron, which was thoroughly explained in the documentary “Enron: The Smartest Guys in the Room” by Alex Gibney. Enron’s shareholders were being lied to regarding the value of stock by a dubious system called Mark and Market in which projected profits were reported as actual profit. This enabled Enron place stock worth at whatever they wished. This was a very effective way of keeping shareholders in…

Words 2029 - Pages 9

Essay about Enron Organization

The Business of Enron The Enron Corporation was created in 1985; its founder Ken Lay, had a PHD in economics, and assumed the position of the CEO then founded the board of directors as the Chairman. The company was based out of Houston, Texas and its main focus was the purchase and selling of energy, specifically electrical power. Ken Lay hired a gentleman named Jeff Skilling to be his Co CEO; he also became the president of the Enron board of directors. Skilling was a very intelligent man who got…

Words 2573 - Pages 11

Enron As The Stain On The American Business World

of the year” in 2000, to being the largest Chapter 11 filing in U.S. History to declare bankruptcy, Enron will forever be known as the stain on the American business world (Gibney, 2005). From the outside, it was Wall Street’s beautiful baby, a company that every CEO aspired to copy, on the inside though, it was an empty hole full of cheating, deceit, and selfishness. Even though the demise of Enron was over ten years ago, its impact on ethics in the business world is still remembered today. Enron’s…

Words 1888 - Pages 8

Mark Cuban Case Study

platform, but “Bubble” was premiered twice on HDNet (another subsidiary of 2929 Entertainment), the same night it opened in theatres on. Since then they have partaken in numerous day-and-date release. Some titles of such films are: “Enron: The Smartest Guys in the Room”, “The Architect”, “Flawless”, “Melancholia” and “Whitey: United States of America V. James J. Bulger”. This method has proved to be lucrative. Ramin Setoodeh and Brent Lang have been credited with pioneering day- and-date strategies…

Words 1567 - Pages 7