Case Study of Enron’s Fall
Case Study of Enron’s Fall Enron, once one of the leading companies in the United States, experienced one of the most notorious corporate collapses in recent history. The fact that Enron was, indeed, corrupt is no question. The question is, however, who is to be held morally responsible for Enron’s wrong doing. Along with figuring out who is to be morally responsible for Enron’s ethically wrong doings, it is essential to explore the systemic, corporate, and individual issues presented within the Enron case. That is exactly what this paper is going to do. First, I will provide a summary of what exactly occurred in the Enron case. From there I will show the systemic, corporate, and individual issues presented. After exploring the issues, I will then show why Jeffrey Skilling, Kenneth Lay, and Andrew Fastow are to be held morally responsible for the fraud committed by Enron. The paper will come to a conclusion by summarizing all that is presented within the paper. It is common knowledge that Enron is arguably to biggest corporate collapse in recent history. It is not common knowledge, however, what exactly happened within Enron that lead to its demise. Kenneth Lay founded Enron in 1985 when he configured the merging of two natural gas companies. Enron continued to grow by acquisition, leading to large amounts of debt. Lay hired Jeffery Skilling in 1989 to head the company’s finance department. Skilling devised a way for Enron to be the middle man for many commodity markets, when added together Enron traded over 1,800 unique products. Skilling hired Andrew Fastow in 1990 to help run the financial department. In conjunction with Fastow, Skilling came up with a way to make Enron’s profit appear greater than it actually was, by overvaluing the long-term value of Enron’s contracts, and reporting the overvaluation as profit. Skilling eventually became the President and COO of Enron, with Fastow being named the CFO. Enron continued to incur more debt,