Case Study Enron

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QUESTION 1: Introduction and Background
(Ashish Pareek – H14017)

Case 2.1

In our study we have tried to analyse the famous bankruptcy case of Enron. The AOL framework would help us analyse what really went wrong and to synthesize our findings. The Enron case is more than a decade old, and despite the recent global recession, does not fail to highlight the misuse of management control at large corporate houses. The Sarbanes Oxley Act or SOX as it is popularly called was an outcome of this debacle. Several other cases of financial misrepresentations were uncovered after the Enron fallout which eventually led to the collapse of large firms like Worldcomm. It was a watershed moment in the history of world finance as it was the largest corporate
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Because corporate executives and organizations are both economic and social institutional forces, their responsibilities to the public are large and go beyond the sanctions of law and demands of competition. In serving each other, they must strike at some unity that goes beyond a mere melding of self-interests to sharing of socially responsible values and ideals. It is the responsibility of a firm to ensure that social values are upheld & any observed deficiencies are aptly removed. On the contrary, Enron as a whole utilised lack of sanctions at the time to exploit public for their selfish goals. In her responsible position, Sherron should have better understood her duty to the society with the unique information she stumbled…show more content…
Opportunism is "seeking self-interest with guile" (Williamson 1985) or seeking "self-interest unconstrained by morality" (Milgrom and Roberts 1992). Enron’s peculiar positioning & the context at that particular period allowed top management to throw morality, virtues & ethics out of equation & barge ahead with their cunning strategies. The false promises with inflated revenues & associated corruption targeted towards taking advantage of the situation to their corrupt

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