Technology

Company Overview

Enron, a Houston-based energy enterprise created by Kenneth Lay, evolved itself
throughout its sixteen years existence from an insignificant gas pipeline concern to the
world's biggest energy-trading company (both off and online). Enron has established an
interstate and intrastate natural gas pipeline firm with roughly 37,000 miles of pipe. Enron
was primarily recognized for pioneering market trading in energy, enabling energy to be
exchanged similarly to other commodities such as oil (Ferrell, Fraedrich, and Linda, 2017).
Enron was long seen as the star of the stock market. It witnessed a stratospheric ascent and
placed 22nd on the Fortune's 100 most outstanding firms list in America in 2000. The
corporation has offices across the globe, including Europe, South America, Japan, and
Australia. Furthermore, Enron established itself in the United Kingdom as the first foreign
business to commence building a power plant after privatizing the country's electric utility
sector.

With the energy industry's deregulation in the early 1980s, Enron's soared to
popularity as energy firms urged Washington to deregulate the company. Firms such as
Enron claimed that increased competition would benefit both companies and consumers.
Consequently, the US government started to relax limitations on who may create energy and
how it was marketed. New vendors came to the market, and competition rose. However, the
price of energy grew more erratic in the open market. Enron saw its opportunity to earn
money off of these variations. It decided to serve as an intermediary and assure consistent
rates. Encouraged by deregulation, Enron shifted to electricity to augment its natural-gas
operations. Furthermore, Enron wanted to invest in the water sector and hedge London
weather.

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Enron became a massive participant in the US energy sector, holding a fifth of all gas
businesses. Buoyed by the success, the corporation moved on to build markets in countless
energy-related goods. Enron started by providing corporations the ability to hedge against the
risk of unfavorable price swings in several commodities like steel and coal. Enron extended
its trading arm to include hedging against external variables such as weather risk by the end
of the decade. Enron was not the only firm in the game. Still, via its online trading arm,
Enron was becoming the largest on what was nicknamed Energy Alley (90 percent of its
profits came from trades) (Ferrell, Fraedrich, and Linda, 2017). The corporation began
growing globally, going into the water in the UK and electricity-generating in India.

Enron's "culture."

Enron's corporate culture was predicated on corruption and fraud, and the corporation
lacked a long-term, open, and trusting connection with its workers. Employees who raised
concerns about the company's procedures were disregarded or dismissed by the company's
management. The leadership of Enron was preoccupied with enriching itself at the cost of the
needs of its followers. In this way, the culture's foundation was built on the contempt for
ethics, with the primary emphasis on producing money

Enron spent heavily for many years, and the company's leadership did not see the
need to change despite repeated warnings about the company's suspect finances. Enron was a
striking business that threw costly parties for its workers to show off its wealth. Enron chose
luxury above established corporate controls, opting instead for a risky strategy. Enron's top
executives lacked knowledge of the company's financial intricacies, and conflict management
was low, leading to top executives occupying both sides of significant transactions, which
ultimately led to the company's demise (Banerjee & Barboza, 2021). Because of the

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company's rivalry culture, various divisions inside Enron competed against one another to
show off massive luxury at parties.

Enron had a winner-take-all mentality, which resulted in intense rivalry among its
workers for the opportunity to receive multimillion-dollar bonuses in exchange for their
efforts. The top management had to ensure that the company's stock price continued to climb,
which increased the dangers associated with the accounting methods (Stephens & Behr,
2021). The business's culture was centered on ensuring that Enron's image was one of a one-
of-a-kind corporation with an impeccable track record that would attract and retain


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