Another section of Enron’s business practice that is definitely not ethical is their accounting methods. In a technical aspect their accounting methods were fine, but this was only because of a loophole. Andrew S. Fastow was described as a financial whiz kid because of these loopholes that he knew how to take advantage of. Some of these things that he, and Enron, were able to take advantage of were the setups of special purpose entities. They would setup these special purpose entities and have either their friends or employees to invest in these special purpose entities so that Enron my say that their debts and liabilities are actually under the special purpose entities and not of Enron.
This made it look like Enron didn’t have as much debt as it should have had. A second practice in the accounting methods that were not ethical was their manipulation of their revenue. What they did was to make either their earnings more or inflating their stock. They would make sure that any potential deals that could make money in the future they wrote down in the books in the present, which is not a good accounting practice. Also they used sham swaps with other companies that would buy products and services with each other to make it look like they where making sales and money, when in fact that all they did was trade some assets and wrote a sale. All of these practices lead to a healthy stock price in Enron, which they needed so that they may borrow more money from creditors.
The Essay on Your Ideas to Make Mumbai Special
RESUME NAME : KRISHNENDU P. DEY (AMIT) FATHER’S NAME : Shri. Provash Dey DATE OF BIRTH : 2nd February, 1965 PRESENT ADDRESS : Krishnendu p. Dey Vanshika Appt. Room No. 403, Lane No. 5 , Dilip Nagar Tin Batti, Nani Daman Daman – 396 210. CONTACT NO. : Res + 022-24592068 Cell :- 9624481764 E mail :- [email protected] PERMANENT ADDRESS : Bhagirati Chawl, room No. 1, Near Sadguru, Shivneri Nagar, ...
All the borrowing from the creditors just put Enron in more debt. The practice that Enron did violate the human right to be informed, is not just, and just didn’t have good utilitarian reasoning. They did not inform the shareholders, the employees, and the creditors about their practices or what the real picture was. The practices in accounting was not fair because they were not really working with money they actually had and kept doing business when other businesses in their position would, and should, re-evaluate how their business is run. The benefits and costs were not fairly distributed, this is because while most everyone that dealt with lost money in Enron when it collapsed the top management won out because they new what was going to happen so they sold massive amounts of shares of the company. Overall Enron didn’t solve any ethical dilemmas and they had unethical practices. social responsibility means that a corporation should be accountable for any of its actions that people, their communities, and their environments. Enron fell victim to the iron law or responsibility because they were not socially responsible for their actions.
In the long run Enron lost its power in the world from being one of the most powerful companies to a company that had shares worth less than one dollar and having their bonds turn into junk bonds. Enron was not able to forgo profits and take on losses so the social impact they had seriously hurt all other their stakeholder. Enron was not able to responsibly balance economic, legal, and social responsibilities. The three responsibilities of businesses, and of Enron, are Econimic responsibilities to its stockholders, its social responsibilities to carious stakeholders, and legal, firms must abide by the laws and regulations governing the society. The only thing Enron wanted to excel in where their economic responsibility and this reflected in insisting on results and know particularly caring how they were obtained. Sure Enron made sure the stock were up and stayed up and this made their stockholders happy, but this came at a price to everyone.
The Business plan on Management Ability Business Company Corporations
With the growing number of corporations taking over small businesses, and the belief that becoming a proprietor is associated with being wealthy, one must decide which type of business to become involved with. There are several differences between these two types of business. A corporation is a business organization having a continuous existence independent of its members (owners) and power and ...
Enron was not able to handle the legal responsibility this was due to the accounting methods that they practiced. The accounting methods that Enron practiced did not abide by the laws and regulations governing U.S. society. Laws and regulations are enacted to ensure socially responsible conduct by businesses. Enron went around the law to ensure their revenue at the end of the day. Enron’s legal responsibility was low while their economic responsibility was relatively high.
They wanted to make money but they where doing it the illegal way, and because of this their social responsibility was just terrible. In the end of the company no matter what was done all the illegal actions were catching up to them and this showed to the world how irresponsible Enron was. They were not socially responsible to any of their stakeholder. The stocks fell and their company went into bankruptcy, many people lost money. Employees lost their jobs and life earnings, and because Enron was a huge company the end of Enron had a ripple affect. All other companies that worked with Enron lost business and they might have had to cut back on costs. Customers lost because they didn’t have the services of Enron, a company that deals with electricity, water, broadband, pulp, paper, and lumber.
Creditors had to write off loads of bad debt because Enron would not be able to pay it back. Companies should take a look at Enron’s approach to business and learn that you need to responsibly balance all three responsibilities of business to have a successful business in today’s world..
