Enron Failure

1000 words, 4 pages

Intro Sample...

The failure of Enron Corporation became a symbol of the excesses of corporations during the economic boom of the 1990s in the United States. Once billed as “America’s Most Innovative Company” by Fortune magazine, Enron became one of the largest bankruptcies in U.S. history in December 2001. The company’s collapse resulted from the reporting of false profits, and by using accounting methods that failed to follow generally accepted procedures. Internal and external controls failed to detect the financial losses disguised as profits for several years. Enron's failure was a result of a breakdown of corporate structure and a failure of leadership. Without committed ethical leadership, ethical standards cannot be... View More »

Body Sample...

Leaders must offer clear and explicit signals, to avoid any confusion or uncertainty over what is and what is not acceptable conduct within an organization. The failure of Enron was a failure of leadership, management and organizational structure.
Enron’s management endorsed a high-risk, asset-light business and financial strategy. This strategy resulted in the illegal use of institutional investment money. If Enron’s balance sheet had contained a greater proportion of tangible and fixed assets, the firm may not have collapsed as it did, and the fixed assets could have been sold to meet its financial obligations. Enron’s top managers are responsible for poor business decisions and mismanagement of the corporation. Decisions that individuals and corporations make often have multiple, systemic effects. Often, individual decision makers underestimate the consequences that follow from their decisions.
Enron’s failure illustrates the need for a strong moral culture in corporations. Any company is susceptible to the failings of the individuals involved. The fundamental ethical foundation of moral reasoning and the desire to accomplish moral good in serving a customer needs to be present. In the case of Enron, the company's executives failed in their responsibility and accountability to shareholders and customers. There are many dangers when strong leaders without strong moral and ethical beliefs are place in power. In the case of Enron we see that once people align themselves with a company, and invest faith in its leaders, they are liable to lose their own sense ethical ...

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