Enon Debocal

Enron Debacle

Howard Austin

Allied American University

April 5, 2013

Author Note

This paper was prepared for Ethical Decision-Making for Business 354, Module 1 Homework Assignment taught by Diane Sykes.

The terrorist attacks on September of 2001, were not the only devastating hit that shocked the world that year. A month later in October the American Energy Company, Enron, based in Houston, Texas collapsed. At the time of the collapse, Enron was a multibillion-dollar corporation employing thousands of people and a multitude of affiliates, including the American Government. In this paper, the issues of what lead to Enron’s collapse by its top leaders undermining the foundational values in the company’s Code of Ethics will be discuss. It will also lay out how Enron’s corporate culture was a breeding ground for unethical decisions and actions. Furthermore, give insight on how investment backing contributed to financial blow that rocked the business world, and discuss if such an occurrence is on the verge of happening again.

Enron began in 1985, when Houston Natural Gas and InterNorth of Nebraska, combined forces, led by CEO Kenneth Lay. From the onset of Enron’s merger, they compiled enormous amounts debt and made poor business decisions in regards to policing its gas pipelines, losing exclusive right to its own product (Thomas, 2002). Lay in over his head, sought out finical assistance from a baking and financial consultant by the name of Jeffery Skilling. Skilling’s assistance help Enron turn the tides of fortune, earning him a permeate position with the Enron family. Eventually, Skilling helped Enron spread its wings and delve into other markets of trade such as, electrical and worldwide web commodities. These bold moves increased Enron’s stock by over fifty percent in just one year (What Really Happened.com). Enron continued this successful record of accomplishment for a few more years. To outsiders everything was going...