This website uses cookies to ensure you have the best experience. Learn more

Enron Scandal Essay

970 words - 4 pages

A
CASE ANALYSIS
Of

Enron
SUBMITTED IN PARTIAL FULFILLMENT OF
MBAC422: Business & Society
Case 2
BY

RAHUL DADA
2011H149219

UNDER THE SUPERVISION OF

Prof. Anil K Bhat
&
Dr. Sarvesh Satija
Management Department

BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE
PILANI, RAJASTHAN – 333031

1

Introduction
Enron Corporation was an American energy, commodities, and Services Company based in
Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately
20,000 staff and was one of the world's leading electricity, natural gas, communications, and
pulp and paper companies, with claimed revenues of nearly $101 billion in 2000. Fortune named
Enron ...view middle of the document...

Chief Financial Officer Andrew
Fastow and other executives not only misled Enron's board of directors and audit committee on
high-risk accounting practices, but also pressured Andersen to ignore the issues.

What Went Wrong at Enron?
Ken Lay was different. A hands-off manager and a business visionary, he saw opportunity in the
rapid deregulation of energy markets in the United States and around the world. He attracted
subordinates who wanted to seize these opportunities. Of these, the two most influential were
Rebecca Mark and Jeff Skilling.
Mark was a strikingly beautiful and charming woman. Her business wardrobe included fur coats
and stiletto high heels. Aggressive and accustomed to getting her way, her nicknames came to
include "Mark the Shark" and "Hell in High Heels." Like Lay and Kinder, Mark had come to
Enron from Houston Natural Gas. At Enron during the late 1980s, she worked in the electric
power division, learning how to negotiate international power generation projects in a market
that was just beginning to attract investors. One important deal was a gas-fired electricity
generating project at Teesside in Northern England. Lay was impressed with Mark's style and
facilitated her advancement in the firm.

2

Enron managed to hide millions in dollars in debt and losses through unlawful accounting
practices. They hide these losses under their many subsidiaries, often in foreign countries. In
event of the fraud being exposed, Enron’s stock crashed but few of the management members
managed to bail themselves out by selling the stock when it was still at a high. The investors and
employees were left high and dry to face the loss of their investment, pension and retirement
amounts. There are many criminal investigations and cases registered for Enron executives.
These executives have been known to receive hefty bonuses just before the collapse of Enron.
Other accounting scandals like WorldCom and Xerox were brought to light further reducing
...

Other Essays Like Enron Scandal

Case: 9 Enron Essay

969 words - 4 pages conflict of interest that drove his company into bankruptcy and gave birth to the greatest financial scandal of the time. 2. Did Enron’s bankers, auditors, and attorneys contribute to Enron’s demise? If so how? None of the scandals that took place at Enron would have been possible without the support of their attorneys, bankers, and auditors. Enron’s lawyers, Vinson & Elkins’, wrote opinion letters supporting the legality of many of

Enron Business Law Essay

516 words - 3 pages Assignment #1- Enron Corporation Tikia L. Almon Professor Zara Sette Business Law July 24, 2011 The Enron scandal, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world. In addition to being the largest bankruptcy reorganization in American history at that time

Enron: Corporate Culture

3797 words - 16 pages conventional consist of stage 5: social contract orientation, following by stage 6 universal ethical principle orientation (Dellaportas et al, 2012). In the case of Jeffery skilling was Chief Executive Officer (CEO) of Enron Corporation from year 1990 to 2001. Jeff was found to be responsible for a multitude of criminal activity instrumental in the scandal itself and as well as for losses being take place by Enron scandal. The Kohlberg’s theory

Fall of Enron

994 words - 4 pages individuals in an organization it is the culture needed to be created by the leaders of an organization in order for a business to grow long-term. Our business regulatory system has attempted to prevent future misconducts for the protection of society by creating transparencies so that we are not faced with another Enron. The Sarbanes and Oxley Act were created based on the Enron Scandal which, helps to protect investors from the possibility of

Ethics Paper

922 words - 4 pages look back at the accounting scandal at Enron, from an ethical perspective, the company which the media portrayed was the last straw that broke the camel's back. Enron was a large energy, commodities and services company, marketing electricity and natural gas, and providing financial and risk management services around the world (Cunningham, Lawrence 2002). Enron Corporation was created in 1985, shortly after the federal deregulation of natural

Enron Collapse

607 words - 3 pages do some wrong thing. In the result, the company is broken. Arthur Andersen, an auditor and consultant, was convicted of obstruction of justice for shredding documents related to its audit of Enron, resulting in the Enron scandal. However it is disregard of law. After all the social would found Enron’s problem. Another organisational factor is Enron’s strategic. Enron’s leader comes up with a way to rise price of stock. In fact, companies

Enron Movie Review

1270 words - 6 pages activities, information and communication and monitoring. Based on the documentary several control issues were observed. They were: * During the Enron oil scandal aka the Valhalla scandal there was significant misappropriation of monies. In this particular situation instead of reducing risk lay encouraged traders to keep gambling more. Traders gambled away all of Enron’s reserves and this was covered up by Muckleroy who was able to bluff the market by

Business Failure

1050 words - 5 pages Enron was an energy marketing corporation that suffered severely from a serious financial scandal, which involved Enron and its accounting firm. The scandal consisted of the discovery of highly irregular accounting procedures and practices which took place during the 1990s. These irregular accounting procedures and practices included the manipulation of stock prices as well as loans to shareholders. As a result, this caused Enron to abruptly

Unethical Practices

1077 words - 5 pages into Chapter 11 bankruptcy in December. More than six months after a criminal inquiry was announced, the guilty parties have still not been brought to justice. The Enron scandal has far-reaching political and financial implications. A chorus of outraged investors, employees, pension holders and politicians are demanding to know why Enron's failings were not spotted earlier. And the US Justice Department is thought to be trying to charge

Demise of Enron Corporation® and Worldcom®

654 words - 3 pages , acquisitions, long distance rates, and cutting edge technology in the communications industry. It achieved an unprecedented success that would soon unveil accounting fraud, scandal, and shameful demise. But in 2002 Enron and WorldCom were exposed as corrupt organizations, run by fraudsters that had lined their pockets with tens of millions of dollars and destroyed $240 billion dollars worth of investor's money (BBC News, 2012). Major Factors that

Examine a Business Failure

1156 words - 5 pages communications companies, with claimed revenues of nearly $101 billion in 2000. The end of 2001 revealed that the reported financial condition was sustained substantially by institutionalized, systematic, and creatively planned accounting fraud, known as the Enron Scandal (EPSA, n.d.). On December 2, 2001, Enron filed for bankruptcy under Chapter 11 with assets of $63.4 billion, it was the largest corporate bankruptcy in U.S. history along with the

Related Papers

Enron Scandal Essay

681 words - 3 pages Enron as an ethical dilemma can only be described as a travesty. The violations of ethical code and moral obligation ceased to exist while the company was alive. A tremendous contributor to the scandal is Arthur Anderson, who was Enron’s outside auditor since 1985. Arthur Anderson was able to hide major losses from Enron. Many projects that had failed through Enron seemingly went unnoticed as they were covered up by Anderson. Not only was this

Case Study Enron Scandal

763 words - 4 pages The Enron Scandal Case Study FACTS OF THE CASE Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Enron's predecessor was the Northern Natural Gas Company, which was formed during 1932, in Omaha, Nebraska. It was reorganized during 1979 as the main subsidiary of a holding company, Inter-North which was a diversified energy and energy related products company. During 1985, it bought the

The Enron Scandal Essay

3076 words - 13 pages In 1930, Northern Natural Gas, a Nebraska-based gas pipeline company was founded and thus began The Enron Corporation as one of the worlds's leading energy companies. In December 2001, Enron filed the largest corporate bankruptcy claim in United States history. The company's collapse led to investigations of both Enron and Arthur Andersen, an accounting firm employed by Enron. Investigators were alerted to charges that Enron deliberately

Enron And Organizational Behavior Essay

1504 words - 7 pages it’s good to understand the past so it doesn’t get repeated, so nobody is a victim of this type of scandal again. My review on this book is that it is a good read and I’ve heard about Enron in the past, I have never really understood it or what happened. This book makes it easy to understand what Enron did and how it did it. I highly recommend this book to anyone wanting to know about Enron, businesses, corruption, greed, organizational behavior