ENRON CORPORATION

Enron Corporation

Enron Corporation

recount how Enron could have been organised differently to avoid such activities?

Answer

In past 5 years, the plethora of articles and books has been released, dealing with ethical business practices. Balancing books: The crooked E, is an article by Anita Peltonen, which examines Enron's practice of kiting (Illegally benefiting from altering amount of money or time represented by checks that are in transit between deposit and payment, or credit card purchases that are between purchase and payment. For example by depositing and drawing checks between accounts at two or more banks)their stock price and hedging (Hedging the cash commodity using the different but related futures contract, often done when there is no futures contract for cash commodity being hedged).

Another Enron article entitled, Jeff Skilling: Enron's Missing Man; The CEO who created its in-your-face culture has been largely absent from inquiry, by Wendy Zellner, explores Skilling's (Ex CEO of Enron) involvement in Enron scandal. The following quote from sums up content of article by providing damming testimony against his character: "He implicitly and explicitly pushed subordinates to break laws as the heavily indebted Enron scrambled to hide years of bad investments to keep its crucial credit rating." (Zellner, 2002)

In an article entitled big Kozlowski; CEO's under fire, lavish lifestyles and irrefutable greed of today's CEO's are exposed. The main target is Dennis Kozlowski, former CEO of Tyco. The author of article states that Kozlowski will be remembered by Americans as: "the bald guy with $6,000 shower curtain. And, say, $15,000 dog umbrella stand. Ditto for now infamous $2.1 million birthday bash that Kozlowski, former CEO of Tyco, threw in Sardinia for his wife's 40th birthday. It featured the giant cake with exploding breasts and an ice sculpture of Michelangelo's "David" dispensing Stoli through an appendage that in more modest times would've been covered by the fig leaf." (Varchaver, 2002)

This article makes it clear that CEO's today are living lifestyles normal people couldn't possibly fathom, and at whose expense?The investors and their employees. This pressure falls on accountants to make earnings acceptable so that they don't lose their jobs, and their bosses can fund their ridiculous lifestyles.

An article in Business Week entitled, Enron: Let US Count Culprits, takes an in-depth look at key individual responsible for illegal activities that transpired at Enron. Their primary target is Jeff Skilling, and they emphasize that blame for scandal belongs on his shoulders.

Discuss whether Enron's officers acted within scope of their authority. Describe corporate culture at Enron?

"Skilling, the former McKinsey & Co consultant and Harvard Business School grad, tried to craft Enron as the new kind of virtual trading giant, operating outside scrutiny of investors and regulators. Enron's numerous partnerships were shrouded in secrecy, tucked away off balance sheet. They were used to shift debt and assets off books while inflating earnings. The chief financial officer ran and partly owned two partnerships, the clear conflict of interest. Enron leveraged itself without the reality check by any outsider." (Business Week, 2001)

In the Business Week article entitled, ...