Monday, May 25, 2020

Enron Stakeholders - 1700 Words

BA 215 Spring 2007 Enron Stakeholder Assignment Enron was a dream come true for a lot of people, but it was also a nightmare waiting to happen for many more. I am going to examine the collapse of Enron from the management perspective. The three examples of Enron behaving badly that I am going to study are the incidents in Valhalla, the electricity trading in California and the conflict of interest between Andy Fastow and his special purpose entities (SPE). These are just a few cases that led to the failure of the Worlds Leading Company. In 1985 Houston Natural Gas merged with InterNorth, of Omaha, Neb., to form Enron and Ken Lay was named chief executive officer. The company was basically a producer of natural gas and had†¦show more content†¦The theory of deregulation of electricity in California was a model one, but the truth was California was being robbed. Enron electricity traders were manipulating the market strategies to extract more money from the state. These strategies, most were technically legal, were given catchy names and encouraged new ideas throughout the traders. Enron traders were creating, and then relieving, phantom congestion on Californias electricity grid. They were also involved in megawatt laundering, in which Enron bought power in California, resold the power out of the state and then bought the power back and resold it back into California, allowing Enron to avoid price caps meant to secure down costs (4). The electricity traders are also guilty of limiting the supply of energy by asking power plants that provide electricity to California to shut done for a specified period of time so they could take advantage of the shortages. All the while President Bush is refusing to step in to do anything stating the energy crisis will work itself out. Finally, in the summer of 2001 the Federal Energy Regulatory Commission (FERC) stepped in to try and alleviate the energy crisis. FERC imposed soft price caps, and the entire power market collapsed. Electricity prices dec reased and sanity returned to the market because the federal government showed they were willing to intervene, and that was what the market had been waiting for. AndyShow MoreRelatedEnron Stakeholders Essay1634 Words   |  7 PagesEnron Stakeholder Assignment Enron was a dream come true for a lot of people, but it was also a nightmare waiting to happen for many more. I am going to examine the collapse of Enron from the management perspective. The three examples of Enron behaving badly that I am going to study are the incidents in Valhalla, the electricity trading in California and the conflict of interest between Andy Fastow and his special purpose entities (SPE). These are just a few cases that led to the failure ofRead MoreKey Stakeholders Affected By The Collapse Of Enron1065 Words   |  5 PagesList 5 key stakeholders affected by the collapse of Enron? Explain briefly how each stakeholder was affected. a. Stockholders at first reaped tremendous gains from their investments in Enron stock, because the company’s value rose a lot of quicker than market averages throughout the late Nineteen Nineties. In 2001, because the stock value folded, investors lost $70 billion in value. Each individual and institutional shareholders were hurt. Significantly blasted were Enron workers whose 401(k) retirementRead MoreAgency And Stakeholder Theories To The Enron Debacle6344 Words   |  26 PagesBusiness and Society Review 110:1 59– 76 Applying the Agency and Stakeholder Theories to the Enron Debacle: An Ethical Perspective Blackwell Oxford, Business BASR  © 0045-3609 O 1 110 BUSINESS CULPAN riginal 2004 Center UK Article and and Publishing, and TRUSSEL Society for SOCIETY Business Ltd. 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The ethical dilemma that Kenneth Lay and Jeffrey Skilling faced w as whether to let their stakeholders know how poorly the company was doing, or to hide the debtRead MoreThe Collapse Of Enron Corporation1787 Words   |  8 Pagesthere somewhere.† -Daniel Henninger, The Wall Street Journal The collapse of Enron Corporation has created many discussions about the structure of corporate governance. The question of this essay first calls to examine some of the strengths and weaknesses of the shareholder model of corporate governance and how the fundamental principles of this model were instrumental in the disintegration of Enron. In particular, I will discuss Deakin’s article about the third position addressing howRead MoreThe Enron Scandal Of Enron Essay1458 Words   |  6 Pagesevent that took place in our economy was the Enron Scandal, which happened in late 2000 and lasted into the following year. Those who were involved in this incident directly such as CEO’s Ken Lay and Jeff Skilling thought what they were doing was not wrong and that they were able to get away with making millions falsely (Seabury, 2008). However, this was a serious crisis situation and many people were affected through the process as well as their money. Enron was valuing themselves at a higher priceRead MoreInternal Control and Home Improvement1928 Words   |  8 Pagesstores throughout United States, Canada, Mexico operating with more than 234,000 employees (Lowe s home improvement, 2012†). Stakeholders are individuals, groups, or organizations that have a stake in the business. Stakeholders are categorize into two types: internal or external. Internal stakeholders can be owners, managers, and employees. External stakeholders can be suppliers, lenders, and customers (Worthington, 2009). Human Resource (Safety) There are many safety rules in Lowe’s HomeRead MoreEthical Codes Of Conduct Are Secondary Thoughts1531 Words   |  7 PagesEnron, WorldCom and Bank of Credit and Commerce, just to name a few, runs chills up and down the spines of, well, just about everybody. These scandals swirled around several large businesses, and hinged on unethical practices – unethical accounting practices, specifically. The idea of ethics is a hot button these days in all genres. In fact, universities and colleges are including ethics in the curriculum of every discipline instead of offering an ethics major, per se (Kanaiah Kumar, 2009).

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