The Truth About Enron's Collapse Essay

1047 words - 5 pages

Introduction
Approximately 10 years ago, the truth emerged about Enron, one of the largest and seemingly most successful energy companies in the world until it collapsed and declared bankruptcy. What happened at Enron was due primarily to the ethical climate in business at the time; however, accounting frauds such as Enron are not new.
This paper will examine the charismatic leadership from a well-educated man who received both his bachelor and master degree in economic from the University of Missouri and earned a Ph.D. in economics at the University of Houston. Who would have thought someone so educated would have needed help making smart decisions.
Mr. Kenneth Lay, Founder and Jeffrey Skilling, CEO of Enron and a few of their other colleagues allowed greed to cloud their judgment that later ended with charges against them of conspiracy and fraud. In this research we will prove how bad decision making, greed, and lack of self-control eventually lead to the destruction of an empire. This paper will show leaders that lack ethics and integrity will not be able to endure the test of times. Regardless of their intelligence and savvy personality if a leader is prone to unethical behavior they will eventually give in to their own destruction. Unethical behavior verses doing the right thing will never equal success.
Corrupt leadership created by senior management creates an immoral organizational culture and it promotes unethical behavior by the subordinates. These types of behaviors eventually lead to over 20,000 employees losing their jobs, health care and savings.

Problem Statement
Greed, arrogance, and accounting fraud were a matter of inadequate or misleading stockholder information by the organization prominent business executives. Also, when Enron had a high concentration of their stock in their 401(k) but employees are forced to hang onto their shares for years this lead to destruction. Once Enron’s finances collapsed they replaced their operations with the illusion of success.
Background/History
In 2005, a documentary film was released called The Smartest Guys in the Room. This documentary film examined the collapse of the Enron Corporation, the criminal trials for several of the senior executives from the company and convictions. Enron ultimately failed for the same general reasons that lead to all bankruptcies: investments that proved too risky to service the debt obligations of the firm. Enron was to make only limited investment in some commodity supply chain and to use the information from the operation of these physical assets to create a wholesale market and risky-spreading instruments for the commodity, a model that required Enron to maintain sufficient equity capital and the ability to borrow to absorb the occasional loss of cash flow from its trading activities.
Enron was founded by Kenneth Lay a preacher’s son in 1985. The company was only two years old when the scandals began due to a couple of bad decision being made by...

Find Another Essay On The Truth About Enron's Collapse

The Truth About Dragons Essay

1060 words - 4 pages Dragons and dinosaurs, myth and fact, real and story- how do you separate the truth from fiction? You have heard of Cowboys and Indians, but how about Cowboys and Dragons or a snake-eating dragon from Egypt? Could there be another Nessie? This paper will bring up some interesting and often contradictory theories about Dragons. Starting with the thoughts of Evolutionists, then historical references and Biblical commentaries about dragons. This

"The Truth About Tweens" Essay

976 words - 4 pages "The Truth about Tweens" is an article dealing with issues facing children in the eight to fourteen age group. The article focuses on tweens' spending power, their insecurities and daily lives. The insets, "How Parents Can Help" and "The Age of Obsession", address the role of parents in the world of tweens.The beginning of the article focuses on the buying power of tweens, or 8 to 14 year olds. Marketers often target these "highly impressionable

The Truth about Depression

1788 words - 7 pages The Truth about Depression Depression: what is it? Is it really something you can control? How much does it really affect someone? Why do people suffer from depression? Several of these questions are brought to the attention of various professionals such as psychiatrists, psychologists, social workers, and physicians, but not enough people seek the truth. Depression is commonly viewed as a bad day; people either believe they have

The Truth About Forever

995 words - 4 pages “dark” (89) denotative~ with very little light, black, tinted connotative~ looming, scary The point of view in this novel shows Macy’s thoughts as she is speaking them, and uses words like I and me outside of dialouge. “And then I hit…” (89). Therefore, The Truth About Forever is written in first person point-of-view. The author probably chose to do this so that Macy could share her backstories and feelings directly with the readers, such

The Truth about Cannibalism

782 words - 3 pages The Truth about Cannibalism Typical Western thought directs people to examine the practices of cannibalism as savage and primitive. More often than not, this type of association exists because the people viewing the action are frightened and confused by that which they do not understand. In fact, some would even claim that, “cannibalism is merely a product of European imagination” (Barker, 2), thereby completely denying its existence

The Truth About Ciggarettes

687 words - 3 pages The Truth About Cigarettes Did you know that one hundred years ago cigarettes were illegal in fourteen different states? Back then the supreme came to a wise conclusion about cigarettes, "They possess no virtue, but are inherently bad, and bad only". Since then, there has been a lot of controversy surrounding cigarettes. An addictive product responsible for: lung diseases such as asthma and emphysema; many different types of cancer; premature

The Truth About Advertising

1619 words - 6 pages nothing (The Greatest Movie Ever Sold). While an overwhelming amount of advertising’s goal is to persuade consumers, despite all of the unnecessary elements of ads, they are vital to the economy. The truth about advertising is that its sole purpose is to create an economic advantage for a company by increasing their demand. Now, advertising may do that through carefully crafted persuasion, or cold hard facts, and that is where moral unrest may

The truth about steroids

1586 words - 7 pages “The truth about Steroids” “If steroids are illegal for athletes, shouldn’t auto tune be illegal for musicians?”(Unknown) Steroids were originally made for aging men who need assistance in building muscle mass and speeding the healing of injured muscles. Now the use of steroids is being abused by athletes and body builders who want to enhance their performance, and high school students who want to look bigger and better. Should steroids be

The Truth about THe Titanic

649 words - 3 pages history and people should know the truth about it and what really happened to the Titanic. Everything that people say about the titanic is almost 100% true. People say that the titanic was unsinkable but as we all know that was just a myth. “As the lifeboat pulled away we heard cries from people left on the boat.” Edith Brown Haisman. “ I was in lifeboat number 13. I always remembered that my father was waving to us and talking to a clergyman, the rev. Carter.” Edith Brown Haisman.

The Honest Truth about dishonesty

1280 words - 6 pages -esteem. This includes avoiding unacceptable thoughts and refusing to think about reality. When lying to ourselves we sacrifice our integrity and lose touch with the truth. This causes us to lose our ability to understand ourselves clearly, and we can mix up what is true and what is not true. Americans are an excellent example of people who lie to themselves daily. Every day we are living in a lie. Everyone in the United States says, and believes that

The Truth About Foster Care

4128 words - 17 pages own (Babbel, 2012). In a perfect family, a child would not be subject to the emotional pain of leaving their parents and living with strangers. Foster care illustrates how the perfect family is not strong enough to overcome their individual issues. In addition, if a child is adopted out of the system, they may fear being left to fend alone. TRUTH 8 If a child is adopted, he or she must fear about being left after they turn 18

Similar Essays

What Brought About Enron's Collapse? Essay

1074 words - 4 pages What brought about Enron's Collapse?What brought down Enron? Most X Americans would say that greed brought its demise. I would agree that greed did factor into the fall of Enron, once named "the most innovative company" but further investigation into the company and its business and accounting practices reveal more than greed. Mismanagement of huge proportions, disregard to organization, and financial irresponsibility are amongst key factors of

The Truth About Lawyers Essay

1742 words - 7 pages The Truth About Lawyers Society often looks down upon lawyers. This is because lawyers have a long past of not being the most honest people. A lot of attorneys use many deceptive practices when they are presenting a case in court. A lawyer will need to do this when they are defending a criminal who is either thought or known to be guilty of a crime. Lawyers will sometimes, but not usually, lie to help their client. Many more will

The Truth About Murder Essay

2301 words - 10 pages murderer in the dark alley way that we completely forget about the public murderer who sits in a fancy office making millions of dollars a year. The truth about murder is out there and the facts are not what an average individual would have expected. The truth is someone my like me, a young white male should be the most worried about being murdered and I should not trust the people around me especially my girlfriend. The truth is that although they

The Truth About Prostitution Essay

1123 words - 5 pages The Truth about Prostitution Prostitution is a major problem in the United States today. The way we treat these victims as criminals is simply unacceptable. Found in “Business Insider” a study of San Francisco prostitutes showed that as many as 68% of them have been raped and an astounding 82% had been assaulted. Also found on Business insider is a study conducted on the prostitutes in Colorado Springs which showed that prostitutes are 18X more