Enron

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Running head: BUSINESS FAILURE

Enron Business Failure

LaToya Jones

University of Phoenix

Abstract

The company being analyzed in this paper will be Enron. Enron was involved in electrical, communications, pulp and paper, and natural gas. Regrettably in 2001 the company was on the brink of bankruptcy and even the offer to be purchased by Dynegy could not save the organization. Enron was in financial ruins when their stock dropped from $90.00 dollars per share to less than a dollar per share. As the organization crumpled a scandal was revealed involving the dealing between the accounting firm Arthur Anderson and Enron. While being investigated it was discovered that there were irregular accounting procedures done in the 1990’s which included the manipulation of stock prices. Another area that was revealed during the scandal was the management and leadership issues within Enron. In this paper I will identify the failures of the management and leadership of Enron, and how by using correct and positive organizational behavior and leadership within a management team would have effected the now disgraced organization (Chron, 2001).

Business Failure

The ENRON Corporation was a corrupt energy company based in Houston, Texas that went bankrupt as a result of committing institutionalized, systematic and well-planned accounting fraud. Since its fall, it has become a symbol of corporate fraud and corruption. Enron was an energy trading and communications company based in Houston, TX employing around 21,000 people by the middle of 2001. Careful accounting strategies allowed it to be listed as the seventh largest company in America, and it was expected to dominate the trading it had virtually invented in communications, power and weather securities. Instead it became the biggest corporate failure in history (Sourcewatch, 2001).

Within Enron the executive team wanted to establish an organization which would raise funds for their...