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Enron Case: The Collapse of Enron

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Enron Case
• Why did Enron collapse?
• Was it the business model or the management systems and processes which primarily caused the collapse?
• What internal and external factors that led to the collapse?
• What role did ethics play at Enron?
• Ultimately, what lessons should we learn from that case? Please explain.

Please use the case “Innovation Corrupted…Enron” (Harvard Business School case, no. 9-905-048).

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Solution Summary

The reasons for Enron's collapse are examined. Corporate culture and ethics in Enron and the lessons learned from Enron are analyzed. The solution is 944 words with 5 non-APA references.

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Enron Case
Enron Case
• Why did Enron collapse? Corporate culture is the primary reason of the fall of Enron.
• Was it the business model or the management systems and processes which primarily caused the collapse? The way the top leaders of the company have handled and managed their systems and processes may have caused the company's downfall but their business model of decentralization of its operations paving the way for more subsidiaries and shell corporations have allowed the company to hide their losses that would have had been halted if they were discovered early.
• What internal and external factors that led to the collapse? External factors could be the deregulation of Enron which was applied and granted to them by the government which allowed them to mask the company's real financial state. Internal factors include corporate culture, unethical working processes, lack of attention by the board of directors, conflict of interest, and dishonesty of management.
• What role did ethics play at Enron? The Code of Ethics wasn't fully addressed and the culture of the company doesn't depict their code.
• Ultimately, what lessons should we learn from that case? Please explain. There is a need for significant reforms in the accounting system to be followed and adhered by US corporations. Other aspects that need to be looked into: Corporate governance, auditing firm, organizational culture, code of ethics, etc.

The Enron Case and the Reasons Why Enron Collapsed
Reasons for the collapse of ...

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