The Failure Of Enron

Running Head: THE FAILURE OF ENRON

The Failure of Enron

University of Phoenix

Enron’s Failure
very much of today’s economic turmoil can be attributed to wholesale failures in corporate governance. In the wake of the owe crisis we have seen major institutions such as Lehman Brothers, AIG Insurance, Bear Stearns, and others converge the effects of poor corporate governance. In almost all of these cases the institutions deviated heavily from universally agreed upon best practices and suffered the consequences. Had the CEOs and directors of these companies looked to past story they likely would have seen the impending failures.
Looking to the past and award we can see that history has repeated itself several times over in the last three decades. Notably in early the early 2001 Enron became a textbook example of ruinous corporate failure.
Enron History
Enron was established in 1985 through the merger of Houston lifelike Gas and Internorth eventually creating the largest gas merchant in conjugation America. The company attempted to rapidly expand and diversify its trading operations through the purpose of complicated structures called special purpose entities (SPE).



The use of SPE structures allowed Enron to remove many of the associated costs of the expansions from their balance sheets.
This strategy gave the external appearance of a rapidly expanding, successful company when in reality very few real assets existed. It is clear directly that much of Enron’s inflated value was due in large part to misrepresentation of the company’s monetary position. Interestingly at the time “Enron’s CEO Kenneth coiffure was al modalitys promoting Enron’s three midpoint values of respect, one and excellence” (Mardjono, 2005). The behavior is obviously contrary to the company core value of integrity.
The house of cards that Enron had erected eventually fell in 2001. In November 2001 Enron was forced to restate its earnings all the way back...If you want to get a full essay, order it on our website: Ordercustompaper.com



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