Why Enron Failed So Miserably - 1119 Words

Analysis The reason Enron failed so miserably was due to the failure to meet the important ethical challenges and dilemmas in its corporate environment, the majority of the liability falls upon Kenneth Lay, the company founder, chief financial officer Andrew Fastow and Kenneth Lay’s successor Jeffrey Skilling. Enron’s CEO Mr. Lay failed to act responsible and also take necessary action, like for example when Fortune reporter Bethany McClean started inquiring about the validity of the financial reports provided by Enron, likewise with Jim Chanos, of Kynikos Associates also questioned the validity of the profits made by Enron despite their operating margins were very low and asked as to why Enron hadn’t provided a balance sheet to Mr.†¦show more content†¦Enron would leverage themselves by manipulating political donations, Mr. Lay was a top sponsor to the bush campaign in order for it to be treated favorably to an extent that federal officials would intervene in foreign governments to promote Enron’s plans. Enron’s senior management placed their loyalty to solely themselves above everyone else with an interest to the company, for example foreign governments, employees, contractors, customers. When Enron was in financial crisis, employees were prohibited from selling the shares whilst the senior members most notably Mr. Lay was selling his shares, The sense of betrayal was greatly increased due to the loss of their retirement savings and loss of their jobs The unethical behavior portrayed by Enron’s senior management was ultimately the result of greed and lack of control and proper oversight combined with, intense,competitive, result driven corporate culture that made it easier to ignore Enron’s codes of ethics that gave rise to manipulation of financial reports; hidden losses and SPE’s, suspicious partnerships. Adding to the employee stress was the organization evaluation system that forced employee to either find another position in the company or have their contract terminated and therefore employees were afraid to lose their jobs and followed unethical and illegal practices. Both collective and individual greed greatly impacted Enron’s corporate