Enron and Risk Management
Enron is one company that did not practice good risk management following its reinvention of itself as a financial/energy trading giant. This paper will describe what happened to Enron and show how its problems could have been avoided using sound risk management regarding transparency and accountability.
Before Ken Lay gave Enron over to the new, "innovative" leaders Jeff Skilling and Andy Fastow, it had been a basic energy provider -- transparent and accountable. It had nothing to hide because it was doing nothing wrong and therefore it did not need opaque accounting practices. All that changed when Skilling came aboard and opened Lay's eyes to the "possibilities" afforded by mark-to-market accounting.
Enron's management team, led by Ken Lay, Jeff Skilling, and Andy Fastow, was a dynamic, powerful force, with a strategy that few understood but which, according to the books, appeared to be making everyone money hand over fist. The problem was that there was no transparency or accountability in the risk management strategy. Enron was changing as an organization, essentially moving from energy provider to finance, and leadership faced new ethical challenges as a result: how should it portray itself to investors and to employees? Enron's leaders (Lay, Skilling, Fastow) decided to embark on a Ponzi-like scheme which was misleading for investors and employees. Elkind and McLean (2013), for example,...
THE PEOPLE BEHIND THE RISE AND FALL OF ENRON Kenneth Lay being one of the pioneers of Enron from its establishment in 1986, had lead the way of Enron's emergence as one of the leading company in the U.S. And eventually to its collapse and declaration of bankruptcy on December 2001. Kenneth Lay held the position as the CEO and chairman of Enron from 1986 to January 23, 2002. Lay is
Former Enron employees reported that important documents continued to be shredded despite federal subpoenas and court orders, which prohibited the practice. The employees' condition was so severe that the word "enron" was coined to mean getting victimized or wronged by the company or boss. An "enronian" came to mean an employee or investor who suffers from corporate scandal or corruption through no fault of his or her own. It
2.3: Theme I: This study's first theme defines hedge funds and presents a synopsis of their history. 2.4: Theme 2: Ways hedge funds compare to mutual funds are noted in this section, this study's second theme. 2.5: Theme 3: segment denotes techniques hedge funds utilise in investing. 2.6: Theme 4: A number of ways rising and falling markets impact hedge funds, this section's theme links to the thesis statement for this thesis/Capstone. 2.7: Analysis:
Financial Statement Fraud Report - Enron Financial Statement Fraud Report: Enron The Enron case made the news when investors and employees realized that the company's accounting practices were not in line with what the company was actually telling them. Eventually, the dishonest accounting practices led to the bankruptcy of the Enron corporation and the dissolution of their accounting firm, Arthur Andersen (Foerstel, 2002). That accounting firm was among the five largest in
Therefore, corporations have had to change their viewpoints and start looking at the long-term consequences of their behavior, as well as looking at the bottom line. Businesses also have to be concerned because consumers have also become aware of environmental concerns, and many consumers are demanding earth-friendly products and have shown a willingness to pay more money to competitors who observe environmentally-friendly practices. Interestingly enough, this demand has given rise
likeability is effected by management in the international workplace. It assumes a phenomenological approach to the notion of likeability, and is based on the idea that likeability in management is fundamental to achieving "connectedness" among employees and to inspiring the drive needed to ensure an organization's success. By conducting a survey of employees and managers from every major business continent of the globe (Asia, Europe, America, the Middle East),
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