ENRON CORPORATION

Enron Corporation



Enron Corporation

1. Describe how Enron could have been structured differently to avoid such activities

Enron business, called America's most innovative business for six consecutive years by treasure Magazine, was the world's premier power company. Enron was formed in 1985 by a amalgamation of Houston Natural Gas and InterNorth, engaging the transmission and circulation of electrical energy and gas all through the joined States, but majority of its development was due to the pioneering trading and promotion of power and connection bandwidth commodities as well as its associated risk administration derivatives (Columbia electrical devices Encyclopedia, 2009). Under new authority Kenneth Lay and Jeffrey Skilling, Enron adopted an hard-hitting development strategy. To 'seal the deal', they chartered Andrew Fastow as CFO and it was he, that assisted to conceive the complex economic structure for Enron (Reinstein & Weirich, 2002).

One could say that Enron started to fall as soon as the company moved its aim from regulated natural gas domestically to international power, water and broadband communications - as these were volatile and dodgy hedging transactions (Reinstein & Weirich, 2002). Engaging in these risky transactions, endowed Enron's supply to rise but when these three new localities went tart, the stock fell as well. Enron's administration did not disclose these deficiency and liabilities on their economic records neither to the investors of the corporation (Reinstein & Weirich, 2002).

Despite Enron being called the most innovative and having alleged annual income of one hundred billion dollars, Enron disintegrated in 2001. This paper will recognise the administration and authority flops which led to the untimely demise of Enron company, as well as how the malfunction of this association could have been predicted. In supplement, it will also display how correct organizational behavior of administration and authority could have impacted the structure of Enron in a more affirmative light.

2. Discuss whether Enron's officers acted within the scope of their authority.

Robbins & Judge (2007) define organizational behavior as a study “that investigates the impact that individuals, groups and structure have on behavior within organizations for the purpose of applying such knowledge toward improving the organization's effectiveness….” (Robbins, et al, 2007 p. 34). Organizational behavior can help develop an effective environment in an organization; the organizational behavior model states that there are three levels of analyses that affect organizational behavior (Robbins & Judge, 2007).

These levels are the individual level, the group level and the organizations systems ...