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Enron

Enron. Rebecca Gamboa Carole Gutierrez Maria Fernandez Joanne Gutierrez Case study. Company Motto. “Respect Integrity Communication And Excellence”. E N R O N. Early Beginnings. Formed in Omaha, Nebraska 1932 Known as Northern Natural Gas Company

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Enron

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  1. Enron Rebecca Gamboa Carole Gutierrez Maria Fernandez Joanne Gutierrez Case study

  2. Company Motto “Respect Integrity Communication And Excellence” E N R O N

  3. Early Beginnings Formed in Omaha, Nebraska 1932 Known as Northern Natural Gas Company Reorganization led to a holding subsidiary of InterNorth 1985 Merged with Houston Natural Gas CEO Kenneth Lay changes the name to Enron Headquarters is relocated to Houston, Texas

  4. The fifth largest • company in the United States. • One of the world’s leading energy distributors. • Stated revenues of 111 billion dollars.

  5. Employment: Approximately 22,000 employees

  6. Principle Assets of Enron

  7. Promising Future Ahead!

  8. Fortune magazine 1996 -2001 “America’s Most Innovative Company” S T R E N G T H S

  9. Scandal of 2001.

  10. W EAKNESSES

  11. Chance of Redemption?

  12. Opportunities Merger of two natural gas pipeline company’s – Houston Natural Gas & InterNorth Bandwidth trading was $36 million, more than gas & electricity combined in 2000 Energy trading gave great profits in 2001

  13. Unsuccessful Attempt.

  14. Threats • Tried to monopolize the broadband trading • Modified balance sheets • Forced telecommunication companies to accept their trading model • Pressure to hide debt • Accounting irregularities • Confrontation & Impatience

  15. Enron’s long-term debtdeclared : $13 billion Real Debt: $38 billionHidden debt: $25 billion CommunicationProblem

  16. Present Solution & Recommendations

  17. Solution/Recommendation 1 Structured communication with their competitors. Brief communication allows healthy competition. Create propositions for diverse industry players and competitors.

  18. Solution/Recommendation 2 Accounting representatives should have followed the guidelines of the Generally Accepted Accounting Principles (GAAP ) rather than violating them. Compliance with the guidelines would have allowed for appropriate assistance to help.

  19. Solution/Recommendation 3 Each department within the corporation could have tried to maintain better communication with each other and human resources. Ensure the best interest of the shareholders and employees whose pensions were invested in the corporations stock.

  20. Conclusion Main area of concern stemmed from the falsified financial documentation. Correct information might have prevented the falling out of this booming trading corporation and its practices.

  21. References Cunningham, Gary E. and Jean E. Harris. (2006). Enron and Arthur Andersen: The case of the crooked E and fallen A. Global Perspectives on Accounting Education Volume 3. http://gpae.bryant.edu/~gpae/Vol3/Enron%20and%20Aurhur%20Andersen.pdf "Enron Scandal," Encarta Online Encyclopedia 2009. Retrieved on October 29, 2009 from http://encarta.msn.com Enron scandal. (2009, October 28). In Wikipedia, The Free Encyclopedia. Retrieved 19:14, October 30, 2009, fromhttp://en.wikipedia.org/w/index.php?title=Enronscandal&oldid=322529264

  22. References Continued • Ferguson Niall, The Ascent of Money, Video http://www.pbs.org/wnet/ascentofmoney/featured/watch-the-two-hour-the-ascent-of-money/24/ • McLean, Bethany. (2006). Is Enron Overpriced?http://money.cnn.com/2006/01/13/news/companies/enronoriginal_fortune/index.htm?postversion=2006011818 •  Schwartz, Andrew. (2003). Enron's Missed Opportunity: Enron's Refusal to Build a CollaborativeMarket Turned Bandwidth Trading into a Disaster. UC Berkeley: Berkeley Roundtable on the International Economy. Retrieved from: http://escholarship.org/uc/item/0k61f1nb • Wikipedia: Enron http://en.wikipedia.org/wiki/Enron

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