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

Examine A Business Failure Essay

1156 words - 5 pages

Examining a Business Failure

In order to succeed in today’s evolving global market, organizations must adopt business principles and practices of knowledge sharing, shareholder protection and ethical business practices. Many business crimes are committed because the companies apply pressure to managers and employees to produce results. Economic pressure is responsible for much business crime. Business ethics is important to a company’s future and the tone at the top (management) is crucial to modeling ethical behavior, and if, the top of the hierarchy disregards corporate ethics so will everyone else.
Failure of Enron
Enron was the United ...view middle of the document...

Most of the profits and revenue were the result of deals with special purpose entities (limited partnerships which Enron controlled). Falsifying financial reports allowed Enron to drive up the price of its own stock. Evidence is available that Enron’s subsidiaries engaged in sham trading among them to drive up the price of electricity, and Enron traders arranged power supply deals with California that gave the appearance of creating power congestion, generating fraudulent fees when Enron then appeared to take steps relieving the nonexistent congestion. The large profits made during the crisis were partially hidden by manipulating Enron's financial reserves (Wikipedia, 2009).
Compare and Contrast Contributions to Enron’s Failure
Leadership, management and organization contribution to Enron’s failure: Enron created offshore entities that was used for planning and avoidance of taxes, raising the profitability of a business providing ownership and management with full freedom of currency movement and anonymity that allowed the company to hide loses making Enron look more profitable than it was, while corporate officers created the illusion of billions in profits as the company was losing money. Executives worked on insider information and traded millions of dollars worth of Enron stock with the help from insiders at Enron whom knew about the offshore accounts that were hiding losses for the company. CFO, Andrew Fastow led the team which created the off-books companies, and manipulated the deals to provide himself, his family, and his friends with hundreds of millions of dollars in guaranteed revenue, at the expense of the corporation for which he worked and its stockholders. Enron executives sold their stock but investors were told to buy the stock because the price would continue to climb. The executives were secretly unloading their shares as the price began to drop.
Kenneth Lay, CEO, issuing statements and making appearances to calm investors assuring them Enron was headed in the right direction. Lay has been accused of selling over $70 million worth of stock to repay cash advances on lines of credit; he sold another $20 million in the open market and his wife, sold 500,000 shares totaling $1.2 million. News of Enron's millions of dollars in losses they had been hiding went public and the stock price fell to below one dollar. Former Enron executive Paula Rieker has been charged with criminal insider trading and sold that stock a week before the public was told what she already knew about the $102 million loss.
Workers who audited the company's books for Arthur Andersen, the big accounting firm, received instructions to destroy all audit material, except for the most basic work papers. This practice continued over a period of several weeks even after the first...

Other Essays Like Examine a Business Failure

Ldr531 Wk 2 Essay

984 words - 4 pages The Business Failure One time telecommunications giant, WorldCom, went bankrupt in July of 2002 in the midst of an 11 billion dollar accounting fraud scandal. According to Markkula Center for Applied Ethics (2006), “WorldCom lost $48.9 billion (including a $47 billion write-down of impaired assets). Consequently, instead of a $10 billion profit for the years 2000 and 2001, WorldCom had a combined loss for the years 2000 through 2002 (the year

Busn115 Final Exam Study Essay

2315 words - 10 pages –334) * Connect an effective business plan to the stages of a start-up’s lifespan, including funding sources over time. (p. 124–125 and 130–132) * Compare and contrast some common implications of various start-up strategies. (pp. 122–123 and 132–134) * Distinguish the concept of moral hazard from the proper connection between risk and reward. (p. 5) * Analyze the risks of new business failure and how these risks may be mitigated

Enterprise Risk Management: Product Liability

1032 words - 5 pages Enterprise Risk Management: Product Liability Enterprise Risk Management: Product Liability Introduction The purpose of this document will be to examine and identify tort risks identified in the Product Liability video. Team B will identify the potential tort risks portrayed in the video, examine a particular tort case using the 7 step process, and discuss business risk mitigation and management to prevent damages from situations

Refreshing Documentation In Business

1234 words - 5 pages document. Backing this information up is absolutely critical for business continuity in the event of equipment failure or building disaster. BackBlaze, a leading cloud storage provider, has maintained detailed data on their more than 25,000 hard drives. They found that 5% failed within the first year, an additional 12% fail by the fourth year, and 50% fail within six years (Beach, 2013). In the past a series of tape backups with a complicated

Unit 7 Assignment 1: Risk Management in a Business Model

4054 words - 17 pages customers from large non-market related losses (e.g., firm failure, misappropriation, fraud, etc.); and * to protect the firm and its franchise from suffering adversely from reputational risk. Depending on the size of the organization the risk management function may range from a single risk champion, a part time 'Risk Manager', to a full scale risk management department. The role of business function sin the management of risk should include the

Small Business Failure

697 words - 3 pages “A Study of Small Business Failure” Presented To: Dr. Roosevelt Ratliff, Jr. Action Research Facilitator By Shanika Williams ORGANIZATIONAL MANAGEMENT Cohort #34 In Partial Fulfillment of the Requirements For the Degree of Bachelor of Science TABLE OF CONTENTS I. INTRODUCTION…………………………………………………………………3 Description of the Problem………………………………………………………..…4 The Purpose of the Research…………………………………………………………7 The

Acc 220 Final Project

1065 words - 5 pages financial aspect of my business and will be able to make informed business decisions or create budgets as needed. I like the idea of knowing every aspect of my business. I would not want my business to fail as a result of another person’s failure or lack of knowledge. Before going into business, I think having an education in budgeting, internal controls, and cash management is necessary. If a good accountant is found, he or she can

Aarkstore - Blepharitis - Pipeline Review, H1 2015

1660 words - 7 pages strategies to gain competitive advantage. It strengthens R&D pipelines by identifying new targets and MOAs to produce first-in-class and best-in-class products. Note*: Certain sections in the report may be removed or altered based on the availability and relevance of data for the indicated disease. Scope - The report provides a snapshot of the global therapeutic landscape of Acute Heart Failure - The report reviews key pipeline products under

Cultural Changes in Doing Business Oversees

1735 words - 7 pages goal. The US business environment also embodies that an employee’s primary obligation is to the organization they belong to, because employees can be easily terminated for failure to perform job standards assigned by the organization. The US system is also based on competition, which is believed to stimulate high performance employees and generate a successful business. Many companies build its foundation and success on innovation, hard work and

A Decision

1571 words - 7 pages that even though a project management is not adequate, failure is not always imminent. Failure also depends on the subjective nature of the organization adoption of new technology. The probability of the project being not being failed due to lack of project management methodology is .35. Posterior probability according to Bayes’ shows us the probability of CRM implementation failure given project management methodology is already in place. The

International Business: Is the World Flat or Spiky and the Implications This Has on Singapore

1723 words - 7 pages pre-conceptions, prejudices, and stereotypes and improve effectiveness of operations involving multi-cultural dimensions (Wertsch, 1991). Cultural differences influence our behaviour and ultimately our skill and competence in this area results in the success or failure of communications. This paper aims to examine both the problems and causes of cultural differences and recommend cross cultural strategies management can apply to minimise or

Related Papers

Examining A Business Failure Essay

1265 words - 6 pages Examining a Business Failure G. L. Ivie University of Phoenix Organizational Leadership LDR/531 Rodney Walton, M B A. March 18, 2012 Examining a Business Failure This paper is a brief examination into how different variables both dependent and independent in relation to various theories of organizational behavior played a significant role in the failure of the once profitable and prominent Swiss Air Airline company. It provides

Examining A Business Failure Essay

876 words - 4 pages Examining a Business Failure University of Phoenix LDR/531 – Organizational Leadership On July 19, 2002 WorldCom the number two long distance provider filed the largest bankruptcy ever in U.S. history with its $41 billion dollar debt load, and more than $107 billion dollars in assets. WorldCom’s profits began to decrease in 1999 when businesses reduced budgets on telecom services and equipment. Bernie Ebbers the former CEO of WorldCom

Examining A Business Failure Essay

994 words - 4 pages LDR 531 May 16, 2011 Mary McDonald Abstract In 1983, the company that would become WorldCom started in a small town in Mississippi. Twenty years, billions of dollars, and numerous mergers and acquisitions later, WorldCom filed for bankruptcy protection after a large scale accounting scandal was discovered and the CEO, Bernie Ebbers, drove the company in a tailspin. His unethical business dealings led to over 5100 people losing their jobs

Changing The Ais Essay

609 words - 3 pages best practices and lessons learned involving implementing accounting information systems. However, in order to appreciate what IBM and others are proposing, we need to apply lessons learned to a real-life situation involving the failure to implement an accounting system properly. For this assignment, research the Internet or Strayer databases for information related to a real-life accounting information system failure and best practices, as well