Enron the Fallen
Professor: Karina Arzumanova
LEG100014VA016-1116-001Business Law I
July 24, 2011
Describe how Enron could have been structured differently to avoid such activities.
Enron’s leaders had the work ethic of only fighting for themselves and if others got hurt it was no big deal hurting. Enron had that it’s a dog-eat-dog thinking. This type of thinking would, in the end, be the demise of Enron. Enron focused on short-term gains. The accounting tactics of Enron were degraded by no small terms. Enron was full of demoralized people throughout several departments with growing their personal finances their ultimate goal. They projected many years of financial ...view middle of the document...
Enron could have done many other things that would have shown Enron cared about their ethical standards such as hiring auditors periodically to do an external audit of the accounting statements.
Discuss whether Enron’s officers acted within the scope of their authority.
Enron’s officers did not act within the scope of their authority. The actions of Enron were unethical and dishonest which allowed them profit over their members and stakeholders. Due to the actions of the officers they were no longer in the scope of their authority. Alliances were formed because people of the same level were in control. The employees were afraid to report the dishonest acts of their superiors in fear of causing more chaos. Management deliberately structured the affairs of Enron to create false financial statements of growth, misled their employees, investors and the general public of its financial affairs. The auditors of Enron accepted the financial structure that was enforced by its management. Enron’s directors and officers failed to adequately perform their duties in protecting the investments of its shareholders economically, legally and ethically. Enron gave its inexperienced managers too much authority which caused the company to fail poorly.
Describe the corporate culture at Enron.
It takes organizational and corporate culture working hand in hand to make a corporation work. Corporate culture determines which practices are appropriate and which are not. This develops standards, guidelines, and expectations for individuals within an organization. For years the Enron Corporation was spending big and even when the warnings about the shaky finances began to surface, no one at Enron saw any reason to change. The company had to be better and flashier in everything it did. On Secretaries’ Day, Enron celebrated with gifts of Waterford Crystal and the company set aside $1.5 million for a Christmas party. The company’s spending reflected a go-go corporate culture. Former employees said top executives cast traditional business controls out the window. Top officers, who insisted they were unaware of financial details and did not pay attention to conflicts, let executives sit on both sides of multimillion-dollar deals. Corporate culture cannot be...