The History Of Enron

Enron was the world 's biggest and richest company in the late nineteen-nineties. It 's net value reached 70 billion dollars over the course of a decade and crashed and burned in a single year of savage media coverage and brutal criminal investigations. It 's important to understand how individual arrogance, the corporate recklessness, and U.S. greed collaboratively cost the biggest economic scandal of its kind. Enron was founded in nineteen eighty-five by Kenneth Lay as a natural gas company in the Pacific Northwest. Around that time the energy markets of the US were being deregulated, that is transitioning from government control to free-market. Lay hired visionary Jeffrey Skilling. Under his leadership, the company moved to Houston, Texas

The company stock price was plastered over the walls of the building. Enron executives created the performance review committee which periodically graded the company 's employees and fire the lowest portion without further consideration. Enron 's culture became cut-throat and unforgiving; rewarding those who took risks and bent the rules. As Internet companies grew more popular in the late nineties Enron launched Enron online, an energy trading e-commerce site, which was largely successful. Enron also used this platform to launch high-speed trading services for bandwidth, advertising, and even weather, those all failed and put Enron in debt. However, Enron was able to write these losses office games by using a new system called mark-to-market accounting. With traditional accounting, a company is valued off its past transactions, with mark-to-market accounting, companies are valued based on the present and a future potential. Enron abused it and recorded profits from recently signed contracts and recently built factories even though they were not actually returning profit

However, there are more questions to ask than were answered by the court case. Were the executives making moral decisions? Whose fault was it; the individuals, the company culture, or the system of capitalism as a whole? What were the most nuanced causes of Enron 's failure? Throughout Enron 's history, Lay hired people who were willing to take risks until the line. The people he formed his team with, Skilling, Fastow, and more, we 're only concerned with making money and nourished to cut-throat survival-of-the-fittest culture that encourages employees to break the law. Skilling created a wild risk-taking environment by often taking dirt-biking and racing trips in exotic far out places. More often than not, the men were hospitalized for near-fatal injuries from collisions and crashes. These stories became urban legends at Enron and the team of men was soon idolized as macho men who knew no limits. Recklessness and risky behavior began to be seen as a positive, and led to an unhealthy company culture. The culture created by the executives led to incredibly immoral decisions by many of the lower-tier