Enron Corporation

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Describe how Enron could have been structured differently to avoid such activities. Enron could have been structured differently to avoid bankruptcy by putting safeguards in place and examining its ethical climate. They should have kept their original structure which was based on ideas of constructivism which encouraged employees to thrive and challenge themselves to achieve more. Enron chose to make changes within their organization by employing external members. Those members were given the authority to make financial decisions that affected the organization and its’ future. Enron’s management team lost sight of its fiduciary duty by trying to maximize its’ own profits quickly as opposed to those of the company. “Loyalty, obedience, and care are the hallmarks of the fiduciary relationship”(Bagley, C. E., & Savage, D. W. (2010). Managers and the legal environment: Strategies for the 21st century: Selected chapters: 2010 custom edition pg. 157 (6th ed.). Mason, OH: South-Western Cengage Learning). “An agent has a duty to act solely for the benefit of his or her principal in all matters directly connected with the agency undertaking”(Bagley, C. E., & Savage, D. W. (2010). Managers and the legal environment: Strategies for the 21st century: Selected chapters: 2010 custom edition pg. 157 (6th ed.). Mason, OH: South-Western Cengage Learning). Under the federal securities law, Enron was required to provide various disclosure documents to its shareholders and the members of the investing public when transactions were incurred. Enron should have disclosed complete financial documents to all parties involved in order to come up with a solution to save the company. Enron needed to have honest members and shareholders working within the company to ensure things were happening in a legal manner. Enron should have put safeguards in place and also hired internal auditors who were open and honest about their financial standings. The internal auditors would have ensured that...
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