Scribd Logo
Upload

Welcome to Scribd!

  • 51 views

    Running Head: Enron 1

    Uploaded by

    imran5705074
    1) Enron was formed in 1985 through the merger of InterNorth and Houston Natural Gas. CEO Kenneth Lay rebranded it as an energy trader and supplier. 2) Several factors could have prevented Enron's failure, including improved financial governance and controls, ethical decision making, transparent commodity markets, effective hedging practices, and financial literacy training for employees. 3) If Enron had implemented proper financial management, decision making, hedging practices, and financial literacy education, it could have succeeded as a major energy company and avoided collapse.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Running Head: Enron 1

    Uploaded by

    imran5705074
    51 views4 pages
    1) Enron was formed in 1985 through the merger of InterNorth and Houston Natural Gas. CEO Kenneth Lay rebranded it as an energy trader and supplier. 2) Several factors could have prevented Enron's failure, including improved financial governance and controls, ethical decision making, transparent commodity markets, effective hedging practices, and financial literacy training for employees. 3) If Enron had implemented proper financial management, decision making, hedging practices, and financial literacy education, it could have succeeded as a major energy company and avoided collapse.

    Original Description:

    www

    Original Title

    ENRON-1 (1)

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1) Enron was formed in 1985 through the merger of InterNorth and Houston Natural Gas. CEO Kenneth Lay rebranded it as an energy trader and supplier. 2) Several factors could have prevented Enron's failure, including improved financial governance and controls, ethical decision making, transparent commodity markets, effective hedging practices, and financial literacy training for employees. 3) If Enron had implemented proper financial management, decision making, hedging practices, and financial literacy education, it could have succeeded as a major energy company and avoided collapse.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    51 views4 pages

    Running Head: Enron 1

    Uploaded by

    imran5705074
    1) Enron was formed in 1985 through the merger of InterNorth and Houston Natural Gas. CEO Kenneth Lay rebranded it as an energy trader and supplier. 2) Several factors could have prevented Enron's failure, including improved financial governance and controls, ethical decision making, transparent commodity markets, effective hedging practices, and financial literacy training for employees. 3) If Enron had implemented proper financial management, decision making, hedging practices, and financial literacy education, it could have succeeded as a major energy company and avoided collapse.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 4

    Running head: ENRON 1

    What could we have done better about Enron.

    Name

    Institutional affiliation
    ENRON 2

    What could we have done better about Enron?

    Enron was a merger between InterNorth and Houston Natural Gas. It was formed in 1985 (Chen,

    2019). Kenneth lay who was the CEO of Houston Natural Gas, became the CEO of the corporation and

    immediately rebranded it into an energy trader and supplier. The primary importance of a merger is to

    improve the financial position of the merging companies. Initiating proper financial control and

    management, ethical decision making, adequate hedging practices and also giving proper financial

    literacy to the employees could have prevented Enron from failing.

    Several things could have been done about Enron scandal. According to Lagace (2008), there

    should have been improved governance and proper control and management of finances in the

    organization. In her work, Lagace also stated that the firm should have employed ethical decision

    making and should have also implemented good administrative practices that could have prevented

    moral drift and reckless gambling. Also, the management should have ensured fluid and transparent

    markets for their commodities, i.e. natural gas, that was affected by highly insufficient delivery systems.

    Hedging could have been another good option for the corporation to prevent its failure, but its hedges

    were not real because it was hedging with itself. If the firm could have only applied these practices, it

    could have succeeded as a significant energy trader and supplier.

    There are also other ways that could have led to the betterment of Enron. According to Mack

    (2011), the Enron employees should have given proper financial literacy education, this could have

    helped them to gain knowledge about diversification. The organization should have also tried to use

    variable prepaid forward contracts: by agreeing to sell a certain number of shares at some point in the

    future. With basically proper financial management by the firm, the company could have achieved a lot

    in the market which could have been increased sales leading to increased profits.
    ENRON 3

    For any company to succeed it should ensure that all the practices are put into use by the

    management and also the employees. This can be achieved by initiating proper financial control and

    management, good decision making, proper hedging practices and also giving proper financial literacy to

    the employees. With all the said practices put into use, Enron could have improved it’s financial position.

    What could be the present position of Enron if it could not have failed?
    ENRON 4

    References

    Chen, J. (2019, Sep 3). What was Enron? Investopedia. Retrieved from

    www.investopedia.com/terms/e/enron.asp

    Mack, R. (2011, May 25). How the Enron disaster could have been avoided. HuffPost. Retrieved from

    www.google.com/amp/s/m.huffpost.com/us/entry/206026/amp

    Lagace, M. (2008, Jul 7). Innovation corruption: How managers can avoid another Enron. Working

    knowledge. Retrieved from www.hbswk.hbs.edu/item/innovation-corruption

    You might also like