Enron Research Paper

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Pages: 9

Enron Research Paper
In 2001, the world was shocked by the demise of Enron, a multibillion dollar corporation that had thousands of employees and people that had affiliations with the company including The White House itself. Because of the financial chaos and destroyed lives and reputations this catastrophe left in its path, questions arose concerning how exactly it happened, why it occurred, and who was behind it. It is essential to understand how this multibillion dollar corporation rose to power and later imploded. Enron itself was born as the result of Houston’s Natural Gas and InterNorth, a gas based pipeline company from Nebraska in 1985. In the final analysis, the conspiracy of Kenneth Lay, Jeffery Skilling, and others, including
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Lay, Skilling, Causey, Fastow, and all of the other Enron executives made many insiders believe that Enron could not fail to grow and promoted the myth of its own invulnerability so effectively to the point where companies secured risky partnerships with Enron, thinking that the stock and company would never fail. “Corporate officers at Enron seemed at best to have been neglectful of their responsibilities for oversight, or, at worst, outright criminal and abusive in their levels of greed and deception.” This could have been prevented but Enron failed to create a sustainably successful corporate culture that included customer loyalty and satisfaction that would have balanced the company’s overemphasis on pure short term stock price. The company’s culture had changed to where it only paid cosmetic attention to integrity which was the responsibility of the executive officers and Board of Directors of the company. Enron also kept different division and business units separate from the others, and as a result, very few people in the organization had a “big picture” perspective of the company’s operations. Accompanying this emphasis on delegation were insufficient operational and financial controls, as well as having a distracted chairman, a compliant board of directors, and an ineffective staff of accountants. Even the company’s compensation