Enron Case Study

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STRATEGY 1: UNDERSTAND THE CULTURE AND DYNAMICS OF CONFLICT The company Enron was formed in 1985 after two natural gas companies, Houston Natural Gas and InterNorth merged together. Kenneth Lay, former chief executive officer of Houston Natural Gas was named CEO of Enron and a year later, Lay was assigned to the chairman of Enron. A few years later, Enron launched a website to allow customers to buy stock for Enron, making it the largest business site in the world. The growth of Enron was rapid; it was even named seventh largest company on the Fortune 500 list; however things began to fall apart in 2001. (News, 2006). In the third quarter of that same year, Enron posted an enormous loss of over $600 million in four years. This is one of…show more content…
The board of directors of Enron didn’t pay close attention to the business transactions between the companies that Enron did business with, because they were thriving and making money. The management team also hid the health of the company and the business operations. The culture of Enron was the primary reason of failure of the natural gas giant. The senior executives hid the company’s performances to protect their reputations because they themselves were failing. (SCU,…show more content…
In August of 2001, Watkins scheduled a meeting with Kenneth Lay to discuss the accounting practices of Enron, letting Lay know this misinformation will ruin the company. Sherron explained to him at that time, that Enron needed to come clean about potentially disastrous accounting tricks or face implosion. (NBC News, 2006). Kenneth Lay did not listen to Sherron Watkins or respond in order to avoid the failure of Enron and keep the conflict at a minimum. The senior executives had the insight because of the fabrication of their assets to sell so they wouldn’t lose as much money. There was absolutely no protection for the employees of Enron or the investors. The board of directors didn’t think it was their job to protect the employees and didn’t do a very good job of protecting the investors. (SCU, n.d.). Sherron Watkins, dubbed by Congress as the whistleblower of Enron, has made a career out of teaching others how to spot corrupt practices like the one at Enron. Watkins was also named Woman of the Year in 2002 by Time Magazine. (Watkins,

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