Kenneth “Ken” Lay, the founder of Enron Corporation grew up from a poor family. His father was a Baptist ministry. Ken Lay works many jobs at the same time. He was aiming to make wealth for himself and for his family. From his childhood, he learned the value of hard work to earn a living and to achieve his ultimate goal (to be rich).
He actually did work so hard, been working with different companies and upgraded his skills and education in obtaining Ph.D. degree in economics. When he was at Enron, he displayed hard work and ambitions like when he was a child. Skilling states that he was only acting in the interest of the shareholders. His unethical behavior does not benefit the shareholders. If he was acting in the interest of the shareholders, he wouldn’t have deceived them. Showing wrong figures to show that the company is profitable to increase the stock value and let the shareholders invest more with Enron is a big deceive while in fact, the company was not doing well. His best interest was on how he can cheat more people to gain more money from their investments.
Ken Lay is said to have “wrapped himself in the cloak of moral rectitude”. This is the image of some people who holds moral virtue and rightness of principle of conduct. This behavior creates more trust as long as your actions back it up or at least appear to back it up. It’s definitely a way for people to feel close to you, trust you or relate to you. That was the image of Ken Lay when he was at Enron. Enron didn’t learn from the Valhalla scandal in 1987 because Jeff Lay was too confident when he said that Enron had been able to recover from that oil scandal that could have taken the company down and there was no significant adverse impact on the future profitability and success of Enron. He didn’t take action or punish the perpetrators. In fact, he defended the two traders at the heart of the scandal, even in the face of allegations that they had misappropriated funds, because they had generated millions for Enron.
The Business plan on Frito Lays Dips Dip Sales Company
Frito-Lay Inc. has a very profitable dip product line. This is not only a great deal now, but also has shown tremendous sales growth over the past few years. In 1981 their sales reached 30 million dollars, with the sales figures almost tripling by 1985, reaching 87 million dollars. However, this success brings the corporation into a very unique situation as well as bringing up a very good question ...
It was unethical because he himself as the leader of the company covered up the unethical practice of employees instead of punishing them so not to be followed by other employees. Mark to market accounting is the way of valuing assets based on how much they could sell for under current market conditions. SEC allowed Enron to engage mark to market accounting because it has been a part of Generally Accepted Accounting Principles in the United States. It allows a company to post future profits the day the bill was signed. The method was appropriate to increase profits, but Enron did not reinvest the profits which led to their demise. Richard Dawkins, the author of Skilling’s favorite book, “The Selfish Gene” explained that individual organism is a survival machine. Perhaps this idea was adopted by Jeff Skilling. He became selfish, thinking only about his personal interest. I believe that money is the primary thing that motivates people to become greedy and selfish. Because of the worldly things that nothing satisfies us, we keep on aiming for more.
The “Rank and Yank” was where they ranked their employees into categories of production. The employees give one another annual ratings, with the bottom 15% being fired. In such a cutthroat culture, it’s hardly surprising that Enron executives would sell off their own shares for fortune and prohibit underlings from doing the same, even when it became obvious that Enron stock was sinking faster. Executives engaging in extreme sports, there exists a high level of risk and danger in extreme sports, hence it is required that first people should think of his own benefit. At time of difficulties only the best remains. Both corporate culture of Enron is all about survival of the fittest. Just like the tragedy of Titanic, the rich people were saved first and the poor sank along with the ship. Just like in Enron, the executives made millions of dollars in stealing money from the shareholders and when the company filed bankruptcy, 20,000 employees lost their jobs and almost $7billion investment from the shareholders were lost. Wall Street analysts were willing to believe anything about Enron because Enron was one of the most widely hyped stocks of 2000, climbing 88.6 percent in an otherwise brutal market.
The Essay on Sole Trader Companies
Sole trader companies are the ones which are opened individually. For example, there is one person and he fascinated about doing business so he can invest money into the business and he has to do it by himself. It means he has to find out where can sources of finance come and how to control it because he must work by himself without shareholders. There are some sources of finances as follows: * ...
One analyst even defended his recommendation of Enron by comparing the company to one of the greatest athletes in modern history. They said Enron’s financial statements were difficult to understand and that an investment in the company required a huge leap of faith. Enron overextended itself by trading Internet bandwidth capacity and its partnership with Blockbuster to deliver movies on demand that dissolved shortly after it was formed. This contributed to Enron’s myth as it required a huge investment that never yielded positive returns. Warnings were ignored by Wall Street because they have no problem finding the bright side in a situation despite Enron has been in turmoil for months. The “useful idiots” in the movie were the investment bankers who “purchased” assets when they were actually making loans, which moved things off the books until Fastow “bought” them back. The investment bankers, the US financial institutions, and Arthur Anderson did not act as “checks and balances” to put a stop to the unethical practices at Enron. Enron’s executives used an apparently higher standard accounting firm, Arthur Anderson to mask their deception of profitability and fraud.
The primary value operating among the traders was greed, money, and how to make profits under any circumstance. The traders rocked the prices of electricity over the roof on the consumers’ accounts. Traders discovered that they could create artificial shortages of electrical power so they could push the prices of energy higher. “Good Trader” for Enron is to trade aggressively, a creative trader who can find any arbitrage opportunity. The traders never stepped back and asked themselves if what they were doing was ethical; it is in their long term interest; does it help them they totally defrauded California; does it advanced their goal to nationwide deregulation? Instead, they have pulled from every loophole they could to have get the profit from California’s misery. The unethical behavior of the traders does not benefit the company in the long run. One of the traders who was interviewed states he was never comfortable on the trading floor of Enron, and that he didn’t ask questions because he didn’t want it confirmed that what he was doing was unethical.
The Essay on The Enron Failure Company Responsibility Bankruptcy
I am going to be talking about the company that filed for the largest bankruptcy of all time, and that is the American energy company, Enron Corp and who was responsible for it. The reason I have decided to speak on Enron is because it was indirectly responsible for many other corporate collapses. This graph gives shows us how it effected other companies. Immediately after the bankruptcy, most ...
The traders lost their sense of morality. They tried to protect themselves from remorse. It was the vision of fat bonuses and Enron’s ability to exploit the darker side of the traders pushed them to do what they did. They only have two options; to leave the company or stay in the game. Enron is no doubt a perspective on the doomed corporation, but its assembly of people and evidence makes a compelling look at what can happen when our moral compass is discarded. Normal people can be led to do bad things because of greed and unethical culture of an organization. Enron is an aberration. It deviates from the normal way of business culture. Through history, most companies put money before ethics. Another scandal of this magnitude could happen again in the future because organizations are being run by a human beings who are susceptible to be tempt by greed and power.
