Enron - The Corruption 1 The Corruption of Enron Fred...

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The Corruption 1 The Corruption of Enron Fred Johnson University of Phoenix
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The Corruption 2 The Corruption of Enron Enron was constructed in 1985 with the merger of InterNorth, an Omaha-based natural gas pipeline company and Houston Natural Gas, a Texas-based company. Enron evolved into a gas trading company taking advantage of the deregulated pipelines to increase significantly the overall profits for the corporation. Enron was even ranked in the top of Fortune 500 companies. Leadership was proven to be corrupted in late 2001 when Enron reported over a $600 million loss in the third quarter and over a billion reduction of shareholders equity. During the Enron trial, most of the managers exercised his or her rights of the Fifth Amendment (Sridharan, 2002). Enron leaders made poor business decisions and mismanaged the corporation’s funds for the company that resulted in the fall of the major corporation. Leadership in Enron theorized that the success of the company relied on reporting financial growth by eliminating debt and increasing the shareholders equity. This theory will prove profitable for Enron, and any other corporation, if the financial records are accurate, business ventures are ethical, and all policies and procedures are adhered to in the best interest of the corporation. Enron’s theory of building a successful, long-lasting company supported by hardly any real assets was a risky decision by leadership under the management of former Chief Executive Officers (CEOs) Ken Lay and Jeffrey Skilling. According to Newsweek
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This note was uploaded on 04/14/2011 for the course MGT 521 taught by Professor Klamm during the Spring '10 term at University of Phoenix.

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Enron - The Corruption 1 The Corruption of Enron Fred...

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