Enron Case Study

Essay by rthsk4University, Bachelor'sA+, April 2004

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Case Study Outline



I. Identifying the Problem

A. Symptoms Enron's problems

B. Problematic theories to Enron's problems

II. Root problems

A. Accounting Practices.

B. Roles of Key Players.

III. Analysis of the Problem

A. Causes of the problem.

B. Ethical Theories

IV. Alternatives

A. Alternative actions per different theories.

B. Corrective actions per theories.


Enron Corp. was one of the world's largest energy, commodities and services companies before its Chapter 11 bankruptcy filing, it marketed electricity and natural gas, delivered energy and other physical commodities, and provided financial and risk management services to customers worldwide. Based in Houston, Texas, Enron was formed in July 1985 by the merger of Houston Natural Gas and InterNorth of Omaha, Nebraska. Initially a natural gas pipeline company, Enron rapidly evolved from delivering energy to brokering energy futures as energy markets were deregulated. The company began marketing electricity in 1994 and entered the European energy market in 1995 (CNN.com).

What then went wrong with Enron, we will attempt to analyze.

Identifying the Problem

Enron is the story of the largest bankruptcy case in U.S. history thus far that has cost thousands of employees their jobs and their retirement. Enron, through a variety of accounting tricks relating to partnerships, inflated their profits and lowered their debt. They misled their employees investors and the general public about the company's financial condition. Once those off-the-book partnerships were exposed, the bottom dropped out, with Enron's stock plummeting from almost $80 to less than $1 a share. Enron executives reaped millions through these partnerships and by selling off stock before the demise, while Enron employees lost much of their retirement and investors lost millions (Enron 101).

The Enron Corporation was founded in 1985 and began as the first nationwide natural gas pipeline company. It profited by promising...