Enron Essay - 1885 Words

As Bethany McLean and Peter Elkind portray in The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron, there was a chain-reaction of events and a hole that dug deeper with time in the life-span of, at one time the worlds 7th largest corporation, Enron. The events were formulated by an equation with many factors: arbitrary accounting practices, Wall Streets evolving nature and Enrons lack of successful business plans combined with, what Jeff Skilling, CEO of Enron, believed was the most natural of human characteristics, greed. This formula resulted in fraud, deceit, and ultimately the rise and fall of Enron. Kenneth Lay created Enron in 1985 as a result of the merger of Houston Natural Gas and Internorth. Within a†¦show more content†¦Next came Californias rolling blackouts caused by Enrons traders. By turning the power off and on in California, they could control the price of electricity, essentially stealing peoples money. Because they could manipulate the price, they made hefty bets on it, and in turn made over $2 billion dollars for Enron. Just before the fall of Enron, the insiders sold off nearly $1 billion dollars prior to the annunciation of the bankruptcy of Enron. What caused so many executives and employees to behave in such a fraudulent way? As Skilling put it, the biggest motivator for humans is money. Enrons executives received large quantities of stock options, motivating them to manipulate earnings which would cause an increase in the stock price. The nature of Enrons executives also played a big role in influencing employees to display similar characteristics of aggression, arrogance, greed and dishonesty. Executives at Enron were known to take extreme dirt-biking trips to places like Mexico, where they could dangerously travel 1200 miles of rugged terrain. Stories of broken bones, stitches and flipping jeeps became legendary at Enron, and fed the macho personality of the employees. Top management gave its managers blank orders, to just do it (60). In turn, employees attempted to not only crush outsiders, but eachother. Skilling encouraged this behavior, saying he wanted them toShow MoreRelatedEssay on Enron975 Words   |  4 PagesThe fall of the colossal entity called Enron has forever changed the level of trust that the American public holds for large corporations. The wake of devastation caused by this and other recent corporate financial scandals has brought about a web of new reforms and regulations such as the Sarbanes-Oxley Act, which was signed into law on July 30th, 2002. We are forced to ask ourselves if it will happen again. T his essay will examine the collapse of Enron and detail the main causes behind this embarrassingRead More Enron Essay1056 Words   |  5 Pagesname to Enron. Around that time Washington was being lobbied by energy corporations to deregulate business and let companies set their own prices. 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