Week 2.docx - (1 Mass blackouts increasing its rates for...

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(1) Mass blackouts, increasing its rates for electricity, and manipulating the energy markets were all in an effort to make more money. Enron’s main objective was to increase profitability by any means necessary. This may have included some unethical means to achieve this goal. Enron Energy Services used fear created by the blackouts to push large California businesses into more than $1B in long term contracts. Enron drove up prices and reaped vast profits in the state’s newly deregulated market. Energy traders from Enron bought power in California at lower capped prices, resold the power out of state and then bought it back in order to resell it to California at a huge markup. By selling California “out of state” electricity, Enron could circumvent price restrictions on power bought inside California. (2) Companies should always uphold the highest ethical standards, no matter what the cost. Companies are certainly obligated to its shareholders. However, an overemphasis on short term profit maximization
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