Enron's Business Failure Paper

Topics: Corporate governance, Management, Enron Pages: 3 (1002 words) Published: September 26, 2010
Enron Business Failure Paper

Abstract

The following paper will explain the reason of why Enron as a company failed. It will compare and contrast the contributions of leadership, management and organizational structures to the failure.

Enron, was the worlds top electrical, communications, pulp and paper, and natural gas company. Unfortunately, in late 2001 the company started to unravel. Enron was on the brink of bankruptcy and even an attempt to be bought out by a smaller company called Dynegy, could not save Enron. The company was in financial ruin as their stocks dropped from over 90.00 dollars to practically nothing. A scandal was revealed that involved the companies own accounting firm, Arthur Anderson, and Enron. It was discovered that in 1990 accounting procedures were irregular, which included stock prices being manipulated. Looking into the background of Enron’s troubles, leadership and management issues were a part of this scandal. This paper will identify the failures of the management and leadership of this company, how correct and positive organizational behavior and leadership of the management team would have effected the configuration of the now disgraced company. (Chron.com, 2009)Enron’s Failure as a CompanyThe team of executives at Enron wanted to establish a company that would raise funds for the shareholders. In spite of this, the discovery of lower stock prices made the team take aggressive measures towards their accounting methods. In order to make the companies shares more pleasing, the team of executives counted on a boost of new capital funds and at the same time, cover up any risk to new backers. After Enron started the new accounting process, the necessity to continue the scam amplified with each financial year. Regardless, the company wanted to keep advancing forward. (TIME Magazine, 2009)The Failure of the Companies LeadershipDuring the duration of Enron, the corporation’s governance did not implement their responsibilities....

References: Chron.Com (2009). The Fall of Enron (2009). Retrieved fromwww.chron.com/news/specials/enronCNN Money.Com (2009) Enron On Trial. Retrieved fromhttp://www.money.cnn.com/news/specials/enron/Sarbanes-Oxley Act (SOX) (2009) The Sarbanes-Oxley Act 2002. Retrieved fromhttp://www.soxlaw.comTIME Magazine (2009) Behind the Enron Scandal (2002) Retrieved fromhttp://www.time.com/time/2002/enron
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