Lesson Zimbabwe Can Learn from Enron Saga
MIDLANDS STATE UNIVERSITY
FACULTY OF SCIENCE AND TECHNOLOGY
DEPARTMENT OF COMPUTER SCIENCE AND INFORMATION SYSTEMS
NAME MANDINIKA MAX
REG NUMBER R0432786
LEVEL 1:2
PROGRAMME MSc INFORMATION SYSTEMS MANAGEMENT
MODULE MIM 710 –E-CORPORATE GOVERNANCE
LECTURER MR T TSOKOTA
ASSIGNMENT 1
Question: What lessons can Zimbabwe learn from Enron?
Introduction
Enron Corporation was one of the world 's leading energy companies based in Texas, USA. Before filing for bankruptcy in the year 2001, Enron employed more than 20,000 people. Its revenue in the year 2000 was more than $100 billion. It was named as "America 's most innovative companies for six consecutive years by Fortune. Unethical and illegal business practices at Enron led to the creation of Sarbanes - Oxley Act of 2002.
What led to the fall of Enron?
Enron is synonymous with corruption and corporate fraud. The Enron Corporation was one of the largest companies which sold electricity and natural gas, distributed energy and other services like bandwidth internet connection and provided risk management and financial services to consumers the world over. This company became rich because of its initiative marketing and endorsement of power and communications bandwidth services and risk management offshoots. All these services were supervised by the operations management department but there existed other management departments which carried out half of their functions. Though these functions were purely executive in nature, there was lack of integrity, responsibility, creativity and control. The absence of these ethics led to the bankruptcy of the company. In other words, Enron ethics was ignored by the employees while working.
In an organization, the functions of the operations management department should consist of ethical values, integrity, competence and
FACULTY OF SCIENCE AND TECHNOLOGY
DEPARTMENT OF COMPUTER SCIENCE AND INFORMATION SYSTEMS
NAME MANDINIKA MAX
REG NUMBER R0432786
LEVEL 1:2
PROGRAMME MSc INFORMATION SYSTEMS MANAGEMENT
MODULE MIM 710 –E-CORPORATE GOVERNANCE
LECTURER MR T TSOKOTA
ASSIGNMENT 1
Question: What lessons can Zimbabwe learn from Enron?
Introduction
Enron Corporation was one of the world 's leading energy companies based in Texas, USA. Before filing for bankruptcy in the year 2001, Enron employed more than 20,000 people. Its revenue in the year 2000 was more than $100 billion. It was named as "America 's most innovative companies for six consecutive years by Fortune. Unethical and illegal business practices at Enron led to the creation of Sarbanes - Oxley Act of 2002.
What led to the fall of Enron?
Enron is synonymous with corruption and corporate fraud. The Enron Corporation was one of the largest companies which sold electricity and natural gas, distributed energy and other services like bandwidth internet connection and provided risk management and financial services to consumers the world over. This company became rich because of its initiative marketing and endorsement of power and communications bandwidth services and risk management offshoots. All these services were supervised by the operations management department but there existed other management departments which carried out half of their functions. Though these functions were purely executive in nature, there was lack of integrity, responsibility, creativity and control. The absence of these ethics led to the bankruptcy of the company. In other words, Enron ethics was ignored by the employees while working.
In an organization, the functions of the operations management department should consist of ethical values, integrity, competence and
References: http://www.ethics.org/resource/ten-things-you-can-do-avoid-being-next-enron http://www.econ.iastate.edu/tesfatsi/ The Quality of Corporate Financial Statements and Their Auditors before and after Enron (George J. Benston) Enron Corporation: News, Trial, and the History of the Scandal, Chron.Com Prof. Sue Ravenscroft, ISU, Enron Case Study, Notes George Benston et al., Following the Money: The Enron Failure and the State of Corporate Disclosure, AEIBrookings Joint Center for Regulatory Studies, Washington, D.C., 2003e