BUSINESS

Documentary on Enron

Documentary on Enron

The movie dealt with the story of the bankruptcy of the U.S. energy company, "Enron" in 2001, which is considered one of the largest U.S. companies that were bankrupt before the outbreak of the global financial crisis in 2008.

Enron Corporation now defunct U.S. Energy Company, complete the activities as a result of bankruptcy in 2001.The company's headquarters were located in Houston, State of Texas. During bankruptcy, Enron employed approximately 22,000 employees in 40 countries and is one of the leading companies in the world, in areas such as power generation, gas transportation, gas, communications, and pulp and paper production. In the non-manufacturing sector, company engaged in trading futures and derivatives businesses. It declared sales for 2000 amounted to about 101 billion dollars. Enron Corporation was formed in 1985 through the merger of InterNorth and Houston Natural Gas (BBC News, 2002, pp.a-2).

The film begins with a role of Kenneth Lay, who founded Enron in 1985. After two years of its founding, the company got involved in scandal of conducting activities with two traders who invested in oil markets in order to achieve consistent profits. The company's CEO, Louis Borget, was involved in diverting company's fund to offshore accounts. When auditors came to evaluate their scheme, Lay adopted the strategy to keep making millions in the company. However, traders were eliminated and fired when company came to know about the traders' fraud conduct of taking company's reserves and made the company bankrupt. When this situation was highlighted, Lay denied the fact by saying that he didn't know anything about this wrongdoing.

After this financial breakdown, Lay hired new company CEO Jeffrey Skilling to improve company's position in the market. Skilling adopted the strategy of applying market to market accounting, which was aimed at allowing the company to estimate potential profits on particular projects after signing the contract. He also applied effective management strategies which review and evaluate employees' performance and those who are low performers are fired in the end of the year. This created highly competitive environment (Ebert, 2005, pp. a-3).

The CEO started hiring lieutenants including J. Clifford Baxter, an executive and Lou Pai, the CEO of Enron Energy Sector, who then resigned from EEES after selling his stock. Because of his separate fund reserve from company's fund, Enron suffered 1 billion loss of money.

Enron's online dot com business called dot com bubble started booming ...