The Collapse of Enron

Topics: Enron scandal, Enron, Audit Pages: 3 (1019 words) Published: January 31, 2013
1. Who were the stakeholders involved in, or affected by, the collapse of Enron? All stakeholders were, obviously, affected by the collapse of Enron. However, several of them were critical, especially those being considered as market stakeholders such as suppliers, creditors, employees, and stockholders. These mentioned stakeholders seem to be Enron’s most recognizable as the essential contributors to its organization. They dared of giving up an available alternative in order to take a risk with Enron in hoping of some benefits in return. But once its bankruptcy has happened, these mentioned stakeholders were in a severe case. For instance, its employees would lose their job and became unemployed, this, in turn, could eventually effect on Enron’s non-market stakeholders in term of unemployment rate. Its creditors and suppliers would also experience a huge depressed from their balance sheets. In the case of creditors, a large sum of money would be gone, both principle and interest that they could have gained. This same situation would also happen to Enron’s stockholders, all their investments would not return any single bits as dividends. However, Enron was an energy industry, due to its bankruptcy; a better environment could be seen, this positively affected the local communities.

2. Considering all aspects of the case, what factor or factors do you believe most contributed to the collapse of Enron? The collapse had many causes. Enron made failed investments in fiber-optic networks, a power plant in India, and water distribution in the U.K. Top executives in the company are accused of unethical behavior. The SEC is investigating shady deals in which they allegedly enriched themselves, and formed partnerships designed to hide $500 million in losses. These are serious problems, but corporations have survived worse, and Enron could have been fixed with new management committed to reform. The fatal blow was the collapse in the price of energy and the sudden end...
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