The rise and fall of Enron is a company that was lead to its own demise by it’s own leadership and ill business decisions. The motivational theories explained from the readings of Organization Behavior can correlate with the failure of Enron’s internal organization. Even though a company may appear to display successful business practices‚ the influence of leadership through management can ultimately lead the company to fail. Enron’s code of ethics prided itself on four key values; respect‚ integrity
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Income Manipulation: Enron’s rise and fall General Introduction “Rather fail with honor than succeed by fraud1.” The importance of values and ethics has always shaped the very fabric of human society. This was evident from the era in which the author of this quote‚ the famous Greek poet Sophocles‚ lived until modern times. In my opinion‚ the famous sayings “honesty is the best policy” and “the truth shall set you free” are invaluable and should be followed by everyone. This pertains
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Natural Gas‚became CEO‚ and the next year wonthe post of chairman. From the pipeline sector‚ Enron began moving into new fields. In 1999‚ the company launched its broadband services unit and Enron Online‚ the company’s website for trading commodities‚ which soon became the largest business site in the world. About 90 per cent of its income eventually came from trades over Enron Online. Growth for Enron was rapid.In 2000‚ the company’s annual revenue reached$100 billion US. Itranked as the seventh-largest
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level – why auditing? • Enron Auditing • Why do we have auditing? • Lemonade Stand Example Did ANYONE Do ANYTHING WRONG? CONCLUSION Did Anyone Do Anything Wrong? YES!! ENRON’S RISE 1985 – Internorth‚ based in Omaha‚ acquired Houston Natural Gas. 1986 – Changed name to Enron and moved to Houston. OLD ENERGY SYSTEM • Electricity • State-regulated monopolies. • Stable‚ but inefficient. • Natural Gas • Pipelines transported on fixed delivery routes with set prices. Enron Producers Pipeline
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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 electricity and other commodities. The Business of Enron Enron
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Austin Winsett Dr. Frances L. Ayers Accounting 5252-920 27 March 2013 The Fall of Enron: Mini-Case Analysis Summary: Enron was founded in 1985 as a natural gas pipeline company. In the 1990s‚ Enron emerged as one of the leading pioneers in the energy market by building its business around energy trading and international energy-asset construction. Their emergence in the energy-trading sector all started when Enron recognized that they could take advantage their position as the largest interstate
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Case: The Fall of Enron Enron was so admired prior until 2000; they grew to a powerful company. In 1985‚ Internorth acquired Houston Natural Gas to form HNG/Internorth‚ a natural gas pipeline company. This company was renamed to Enron. At the time of Enron’s creation‚ the U.S. gas market was in the middle of deregulation. In 1985‚ rules were established that allowed gas users to realize the cost savings by purchasing gas at spot prices and separately contracting with pipeline firms for delivery
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auditors and Enron and the existence of conflicts of interest. From 1993‚ Enron started to outsource its internal audit functions to Anderson. Besides‚ conflicts of interest gets aggravated when the cross-selling of consulting services by auditors increases a lot. And consulting fees to auditors are much lucrative than the audit fees. As a result‚ Enron could easily threaten Anderson to give a favorable opinions to the public and otherwise Anderson couldn’t maintain a good relationship with Enron. Most
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Q1- Who were the key stakeholders involved in‚ or affected by the collapse of Enron? How and to what degree were they hurt or helped by the actions of Enron management? Ans- The key stakeholders affected by the collapse of Enron were its employees and retirees. Stakeholders and mutual funds investors lost $ 70billion market value. Banks were also affected by the meltdown of the company. They included big banks like J P Morgan Chase and Citigroup. Not only the stakeholder and bondholder lose out
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Enrons Fall Kenneth Lay – CEO Auditors – Arthur Anderson Jeffrey Skilling – Consultant‚ Hired as a young consultant‚ as due to deregulation‚ Enron incurred massive debts. Jeffrey skilling was hired to come up with innovative new ideas. His revolutionary idea for Enron was to ‘create a gas bank in which Enron would buy gas from a network of suppliers and sell to a network of consumers‚ contractually guaranteeing both the supply and the price‚ charging fees for the transactions and assuming the
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