Enron Essay

2404 words - 10 pages

Enron: An American Accounting ScandalAbstractEnron, a budding company of the 1990's seemed to have everything going for it. Touted by Wall Street analysts as the next blockbuster company that would generate hundreds of millions of dollars in earnings. By creating an innovative energy trading platform, Enron rocketed to the top of their industry. Just as things were starting to peak, the greed of needing to outperform their own previous earnings, Enron stretched their investments to the limits and then created an elaborate accounting scheme to hide the losses. Specifically, mark to market and special purpose entities became the two "drugs of choice" used to hide substantial losses from their balance sheets and inflate their earnings. Eventually Enron's circle game ended with criminal convictions for many and the accounting profession was faced with taking a hard look at where there standards went wrong.Greed"Successful people are always looking for opportunities to help others. Unsuccessful people are always asking, "What's in it for me?" (Tracy, 2001) In the 1990's an emerging way to do business, based in the virtual world of the internet, was building to enormous proportions. One such business, Enron, was taking full advantage of these new and exciting, not to mention uncharted business opportunities. Enron was an energy company created in 1985 with the merging of Houston Natural Gas and InterNorth. Ken Lay, the then CEO of the Houston based gas company retained his title with the newly formed Enron. Mr. Lay was a pioneer of sorts during this time of American history when corporate America was fighting to deregulate the Energy business at the state level. More specifically Mr. Lay had his eye on California. His efforts along with others in the fight led to this state's deregulation of energy in 1996. The vision here was to create a business of trading energy (wholesale) similar to the way stocks are traded on Wall Street. Enron saw an opportunity of making a fortune in this new and emergent market. They started trading energy in California and almost immediately an unprecedented amount of black-outs started occurring. Enron was manipulating the loopholes in the states energy statutes and began ransoming energy at up to an 800% increase in costs. ("The California crisis:," 2001)Enron seemed to be on the cutting edge in this market. They continued their vision with additional expansions in the energy trading market, flanking with international projects such as a building project of a power plant in India in 1993. (Perry, 2001) Enron also created a subsidiary company called Enron Broadband Services, which partnered with Blockbuster, to bring videos to homes via the Internet. By the middle of the 1990's Enron was positioning to be one of America's darlings with a bright and profitable future. Many times however, things are not as they appear."Enron grew rapidly and moved into areas it believed fit its basic business plan: buy or develop an asset,...

Find Another Essay On Enron

Enron Essay

3201 words - 13 pages www.ccsenet.org/ijbm International Journal of Business and Management Vol. 5, No. 10; October 2010 Published by Canadian Center of Science and Education 37 The Case Analysis of the Scandal of Enron Yuhao Li Huntsman School of Business, Utah State University, Logan city, U.S.A E-mail: wyl_2001_ren@126.com, carolee1989@gmail.com Abstract The Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an

Enron Essay

1120 words - 4 pages Integrative Case – The Downfall of Enron Part I 1.     Ken Lay served as CEO and chairman and Jeffrey Skilling also served as CEO. They both were responsible for planning, organizing, controlling and leading the company. They set goals for the company and organized how they would be achieved. Kay’s role was as the figurehead and the leader. He also served as the spokesperson for the company and made many of the

Enron Failure

1252 words - 5 pages The Enron Company began in 1985 when, Internorth, a pipeline company based in Omaha Nebraska, bought Houston-based Houston Natural Gas. At the time the distribution chain of natural gas was highly regulated by the government. Enron and other companies rallied against this and soon the distribution was deregulated. As this was taken place slowly, the natural gas market became more efficient, but also much less predictable. Because of the market

Enron Stakeholders

1708 words - 7 pages Enron Stakeholder Assignment Enron was a dream come true for a lot of people, but it was also a nightmare waiting to happen for many more. I am going to examine the collapse of Enron from the management perspective. The three examples of Enron behaving badly that I am going to study are the incidents in Valhalla, the electricity trading in California and the conflict of interest between Andy Fastow and his special purpose entities (SPE

Enron Ethics

1727 words - 7 pages This article tries to show how the company's culture had profound effects on the ethics of its employee? And particularly in this case: how did Enron lose both its economical and ethical status? This question makes the Enron case interesting to us as business ethicists. Enron ethics means that business ethics is a question of organizational "deep" culture rather than of cultural artifacts like ethics codes, ethics officers and the

Enron Scandal

2766 words - 12 pages Overview of the Corporation Enron is a global energy corporation that was formed in 1895 in Omaha, Nebraska when Inter North acquired Houston Natural Gas (Lee, 2014). Although Enron was founded in Nebraska, the corporation decided to relocate its headquarters in Houston, Texas. Kenneth Lay who was Chief Executive Officer (CEO) of the Houston Natural Gas corporation was chosen as the CEO of the Enron Corporation and Jeffery Skilling was selected

enron overview

1569 words - 6 pages Enron Corporation From Wikipedia, the free encyclopedia The Enron scandal, revealed in October 2001, 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 undoubtedly is

Enron Scandal

739 words - 3 pages 1 1. Enron was valued at $2.3 billion when it was formed in July 1985. On August 23, 2000, its stock was at $90 per share and it had a market capitalization of $65.9 billion. Explain the major business practices that created such dynamic growth in the price of the stock.Enron used many different tactics to inflate their stock prices. The one that sticks out to me is when they signed a 20-year contract with Blockbuster. Early in the contract

Enron Collapse

527 words - 2 pages The collapse of Enron is a horrible tragedy for the workers and investors participating in the growth of the corporation. So much miscommunication and so many lies combined to make one of the largest scams in the history of our world. It contained large amounts of corruption plus the greed of already wealthy millionaires. I cannot get into this tragedy into great detail, because very few individuals actually know how to tell lies apart from the


716 words - 3 pages The Fall of Enron The History Enron began as a pipeline company in Houston in 1985. It profited by promising to deliver so many cubic feet to a particular utility or business on a particular day at a market price. That change with the deregulation of electrical power markets, a change due in part to lobbying from senior Enron officials. Under the direction of former Chairman Kenneth L. Lay, Enron expanded into an energy broker, trading

The Fall of Enron

1041 words - 5 pages The film Enron: The Smartest Guys in the Room was a great film loaded with examples of unethical behavior with Enron being an unethical corporate culture. The film portrays the rise and fall of Enron, one of the most corrupted corporations this country has seen. Enron had started off as a promising energy company with a vision to do good which quickly turned sour when top executives torn the company down while stealing millions of dollars from

Similar Essays

Enron Essay

3061 words - 13 pages The Enron Bankruptcy Chapter 11 Reorganization Todd Haberly May 8, 2002 BUSA 405 Prof. Macdonald 2 On December 2, 2001, Enron Corp. filed the largest bankruptcy in U.S. history. The Enron bankruptcy is also quickly becoming the most infamous and highly publicized bankruptcy case in history. Mismanagement, poor business and accounting procedures, and plain greed all factored into the complicated collapse of Enron. The house of cards, so-to

Enron Essay

977 words - 4 pages The fall of the colossal entity called Enron has forever changed the level of trust that the American public holds for large corporations. The wake of devastation caused by this and other recent corporate financial scandals has brought about a web of new reforms and regulations such as the Sarbanes-Oxley Act, which was signed into law on July 30th, 2002. We are forced to ask ourselves if it will happen again. This essay will examine the collapse

Enron Essay

1053 words - 4 pages In 1984 Ken Lay became chairman and Chief Operator of Houston Natural Gas. It quickly doubled when it bought Florida Pipeline Company. The next year in 1985 Houston Natural Gas merged Internorth Incorporation. With the merger they both combined to own around 40,000 miles of pipeline and shortly after they changed their name to Enron. Around that time Washington was being lobbied by energy corporations to deregulate business and let companies

Enron Essay 504 Words

504 words - 2 pages range, while secretly unloading their shares as they knew the opposite to be true.As executives were selling off their shares of stock, the price continued to drop. As the price dropped, investors were told to continue buying stock or hold steady if they already owned Enron because the stock price would rebound in the near future. Kenneth Lay's strategy for responding to Enron's continuing problems was in his appearance. As he did many times, Lay