Case Study 2 Enron
How did the corporate culture of Enron contributed to its bankruptcy?
These leaders was motivated by greed, money and power. Enron was once one of the Top Fortune 500 Company. The culture of this company was to make profits and as the company gain momentum, many people join the bang wagon of deceitful practices and the demise grown amongst the upper management for Enron. However, the accounting method was question by the accountability of people for the organization including upper management. People have to understand that corporate America cannot be trusted to police themselves. Integrity was not a hiring trait imposed by Enron’s upper management. Even today, we face challenges that we learn from Enron but it was also a returning effect like in the house market fall. Just like Enron, the CEO and CFO become unethical which cause a tough problem for the community that they service and at times it a major effect. Even the hiring practice of working to terminate the bottom 20 percent of the workforce due to the lack of progress within 6 months.
Did Enron’s bankers, auditors, and attorneys contributed to Enron’s demise? If so how?
Every one of these people were involved and play a part to the downfall to Enron. However, the attorney for the company should be sued for malpractice due to the fact that they provide approval and opinion to decision made by the CFO and others. The attorney themselves open themselves up for liability and increased the power of Enron to continue to operate even when they company books were not correct. Since the attorney were invested were profiting from Enron, they too were needing to be policed. Enron was one of their top clients, they continue to bill Enron for their services. This Houston firm made millions in billable and remain quite. Merrill Lynch was also part of the demise. Although the role of the banker were limited but because of sale and profits they too covered for Enron. The one reason was when an analyst that exposed an Enron executive practice. Then Enron retaliated by keeping info from Enron to other stock offers. Furthermore the banker continue to have shady practices that caused more financial downfall.
What role did the company’s chief financial officer play in creating the problem that led to Enron’s financial