Training of management team and employees ensures a good understanding of the business and required expertise. The Smartest Guys Of The Room 1189 Words | 5 Pages. The diverse businesses involved in by Enron left no space for specialization and expertise hence creating organizational problems. Smartest Guys in the Room Case Study Introduction Enron: The Smartest Guys in the Room was a documentary film showing the real story of the largest business scandal in the U.S. where top executive officers in Enron Corporation squandered over one billion American dollars while the Corporation investors and employees lost everything. Reference for Business, 2011. This resulted to skyrocketing of the company’s stocks and Jeff Skilling was considerably named CEO of the company. 2004. For a limited time, find answers and explanations to over 1.2 million textbook exercises for FREE! Relativism theory of ethics dictates that there are no universal principles of ethics and that right and wrong must be determined by each individual or group. Majo Enron Scandal: The Smartest Guys in the Room 2 Comments / Case Study / 18th February 2020 This story is about how a prominent company with a remarkable share value got bankrupt within 24 hours. This was shown to shareholders so they can spend money and invest in Enron. Web. We utilize security vendors that protect and ensure the integrity of our platform while keeping your private information safe. The company’s source of income came from distribution of natural gas, electricity and other physical products. It was the seventh largest companies at the time. We can custom-write anything as well! 15 May. In addition to being the largest bankruptcy reorganization in American history at that, time, Enron undoubtedly is the biggest audit failure. What started as a pipelines company, was transformed by the vision of a McKinsey consultant, Jeff Skilling, who had the idea of. If you were a new employee starting your career at Enron and you learned of the framing tactics in this case study, what would you do? Finally, the shareholders of Enron were not allowed to vet the management of the organization (Markkula Centre for Applied Ethics 1). Smartest Guys in the Room. Course Hero is not sponsored or endorsed by any college or university. For full functionality of this site it is necessary to enable JavaScript. In the case of Enron, the management decided to introduce other trading activities like coal and water on top of the initial natural-gas business. Enron Natural Gas Pipeline Company was formed in 1985 as a result of the merger of Houston and Omaha, Nebraska’s and InterNorth, natural-gas companies. Barnett, Tim. Skilling’s vision was to transform Enron into a giant, asset-light operation, trading power, generally and his next target was trading electricity. Lay was lobbying Washington hard to. Enron’s power business worldwide created a global reputation for Enron. And hence the rights and wrongs are subject to interpretation (Barnett 1). The documentary 'Enron: The Smartest Guys In The Room' gives us a profound insight into the different backgrounds of the three protagonists in the Enron saga: Lay, Skilling and Fastow. A Justice-based theory of ethics is concerned with the perception of fairness of actions. Inexperienced and innocent employees who had dedicated their financial lives to Enron were surprised when Enron Corporation experienced prolonged fallout without their knowledge. Organization behavior theories relate to ethics that dictate how companies should be run. This case study on Smartest Guys in the Room was written and submitted by your fellow student. New York: Portfolio. So, on the back of his track record, Skilling, was appointed Chief Operating Officer by Ken Lay and he then embarked upon transforming the. Once this code of ethics is followed, smooth running of a company is guaranteed. Corporate governance and leadership solely relied on the state of mind, will power and personal relationships of management. The senior management at Enron did not receive extensive ethical training and as such did not have enough knowledge to arrive at concrete decisions. The company operated on corrupt and closely-guarded mismanagement by Enron executive officers. How to write a 4 page essay in one night. By 2000, Enron Natural Gas Pipeline Company had grown and dominated the North America natural gas industry and Jeff Skilling pioneered its expansion to a different range of products that included coal, steel, and water. As of such, managers and directors in such companies should be vetted before assuming management positions to ensure transparency and professionalism. deregulate electricity supply and in anticipation he and Skilling took Enron into California, Enron’s national reputation rested on the rapid expansion of its domestic business and its, steadily growing revenue and earnings from trading. For many years, philosophers have in literature stated and analyzed different theories that form the basis for ethics in business. In this case, egoism defines what is correct and what is wrong with respect to oneself. However, since this code is voluntary, top management in most cases ignore it and hence create organizational problems in a company. OHara, Marguerite. Enron The Smartest Guys In The Room 2 Harvard Case Study Solution and Analysis of Harvard Business Case Studies Solutions – Assignment HelpIn most courses studied at Harvard Business schools, students are provided with a case study. CASE REVIEW “ENRON: The Smartest Guys in the Room” Posted on August 12, 2013 by S Standard INTRODUCTION and BRIEF HISTORY This study guide presents the case of Enron Corporation, a major American energy trading company that went bankrupt in December 2, 2001 owing to the breaking out of its huge financial and accounting fraud scandal. 21 McLean, Bethany; Peter Elkind.The Smartest Guys in the Room. The company was not making profit so they decided to do “future value accounting”. Enron also used ghost companies to hide the massive company losses that later toppled the company. Lecture 11, White Collar Crime. In the case of Enron, the management put self first in the west coast where they leaped a lot of profits as employees lost their jobs while some lost their lives due to the artificial electricity demand scheme. The executive officers in Enron ignored the code of ethics and conspired, mismanaged and engaged in corrupt activities that crushed the company. In this paper, it analyzes the, reason for this event in detail including the management, conflict of interest and accounting, fraud. One of the largest ethical and legal business cases in a very long time has involved Enron. Enron, the Smartest Guys in the Room is a 2005 feature film suitable for senior secondary and tertiary students about how core values of groups can be eroded in business. This paper will focus on the business ethics issues at Enron that were raised from the documentation Enron: The Smartest Guys in the Room, from cognitive moral development to group norms, etc. Essentially Enron faked its bookkeeping to report profits that never existed. The three main guys leading the pack was Ken Lay, Jeffrey Skilling, and Andy Fastow. The Enron case has been extensively analyzed and reviewed in the business media; books and written case studies have been developed that provide substantial insights into this case of corporate malfeasance. It also featured insider accounts and fire-raising corporate videotapes audios, interviews with former Enron executives and employees, reporters, former Governor of California and stock analysts. This was followed by the death of Ken Lay the CEO, two months later. McLean and Elkind are credited as writers of the film alongside the director, Alex Gibney . "Former Enron executive pleads guilty".USA This documentary made for Enron is all about people who tried and […] Jeff Skilling declared the company’s earnings of $53 million dollars in a deal that yielded no profits. Introducing Textbook Solutions. Enron: The Smartest Guys in the Room: Study Guide We will write a custom Case Study on Smartest Guys in the Room specifically for you for only $16.05 $11/page. Markkula Centre for Applied Ethics. The idea of Enron dealing with all types of businesses both simple and complex made it impossible for employees to have the required expertise hence resulting to organizational problems. Mismanagement affects the employees, investors and the management itself. Selling Enron. Enron: the Smartest Guys in the Room: Documentary Film, Fortune (magazine), Bethany Mclean, Alex Gibney, Enron Corporation, California Electricity Crisis, Gray Davis, Independent Spirit Award for Best Documentary Feature. Chicago / Turabian - Author Date Citation (style guide) McLean, Bethany and Peter. The loopholes in the legal framework are used by the wise to defraud companies. The code of ethics details how employees, employers and company business should be transacted. Many companies like Enron have voluntary codes of ethics that prohibit executives from being involved in other business entities that do business with the company they are working for. Technological theories of ethics put more emphasis on the results of an action and can be classified into egoism and utilitarianism. Documentary Presentation: The Confessions, The Smartest Girls on the Screen – Most Educated Female Characters, Philosophy: The Puzzle of Identity by Gottlob Frege, Hominids as the Members of the Human Family, Enron Management Practices' Ethical Principles, Film analysis on The Inside Job Movie by Charles Fergusson, The World of Documentaries: Touching the Void and Bigger, Stronger, Faster, When the Levees Broke: A Requiem in Four Acts. Related Videos. It observes that standards of right and wrong may change with time and cultures. Independent Lens. Enron Corporation was highly affected by organizational problems to the point of a closure and bankruptcy declaration of their accounting firm. Utilitarianism theory, on the other hand, puts more emphasis on the overall amount of good that might be produced by an action or a decision. applying models used in the financial services industry to the deregulated gas industry. MAIN PLOT AND BUSINESS THEME DEVELOPMENT The documentary film, Enron: The Smartest Guys in the Room, is a story about the greed in corporate America that is always exposed after the fact. Enron: The Smartest Guys in the Room is a 2005 American documentary film based on the best-selling 2003 book of the same name by Fortune reporters Bethany McLean and Peter Elkind, a study of one of the largest business scandals in American history. IvyPanda, 15 May 2020, ivypanda.com/essays/smartest-guys-in-the-room/. The diverse business activities deny a company a sense of specialization and hence no mission. In 2006, the film was nominated for Best Documentary Feature and consequently won the Independent Spirit Award for Best Documentary Feature. IvyPanda. Chicago / Turabian - Humanities Citation (style guide) Enron: The Smartest Guys in the Room Enron was an energy company based out of Texas that was formed in 1985. A just action treats all fairly and consistently in accordance with the set ethical or legal standards. In due course it, had deals all-round the globe, from South America to China. The schemes and conspiracies developed by Enron’s executives were unethical and poor show of leadership traits. Beau Bassin: Alphascript Publishing, 2010. Web. Though Enron was applauded for being innovative, it had various organizational problems. Enron scandal overview The Enron scandal was a financial scandal involving Enron Corporation and its accounting firm Arthur Andersen, that was revealed in late 2001. Enron: the smartest guys in the room. Professor Sue Ganske. ENRON ETHICS AND LAW ESSAY. Smartest Guys in the Room White Collar Crime: Embezzlement another High Dollar Scheme The Smartest Girls on the Screen – Most Educated Female Characters Philosophy: The Puzzle of Identity by Gottlob Frege Hominids as the Members of the Human Family Discussion on the Greater Providence Deposit & Trust Embezzlement Case Enron Every corporate organization operates under its own set of code of ethics. Web. Meanwhile, Skilling accounting results put Enron’s earnings at 53 million dollars a deal with no profits (Independent Lens 1). If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. In this case, a company might decide to expand its business physically or across the borders. Public Broadcasting Service, 2011. Answer to 1-4 Short Paper: Enron Case Study Watch Enron: The Smartest Guys in the Room. Enron did not have a mission or a strategic plan, and that can be viewed as an organization lapse. External auditors are recommended in a public company to display the true financial position of a company. The fact that the law left considerable discretion to managers and executives to exercise their own business judgment about what was in the best interests of the company, enabled the executive officers of Enron to mismanage and practice corruption. The film is the inside story of one of history's greatest business scandals, in which top executives of America's largest company walked away with over 1 billion dollars while investors and employees lost everything. Additionally, Arthur Andersen’s accounting firm collapsed, the 2006 convictions of Ken Lay, Jeffrey Skilling and Chief Financial Officer, Andy Fastow also fell. "Smartest Guys in the Room." Ethics, Reference for business, Encyclopedia of business. This preview shows page 1 - 4 out of 7 pages. As a matter of fact, it took Enron 16 years to go from about $10 billion of assets to $65 billion of assets, and 24 days to go bankruptcy. Hence, the law can protect or be used to suit the highly ranked in a company. At the time of the collapse, Enron was the largest bankruptcy in history. HDNET FILMS, 2005. Because Enron was dealing with many cash transactions, entered into future contracts, and acted as a bank for many commodities, it was necessary for them to generate cash flows which they never did. "Smartest Guys in the Room." Copyright © 2020 - IvyPanda is a trading name of Edustream Technologies LLC, a company registered in Wyoming, USA. What’s your deadline? The movie is about a crime story and the bankruptcy of ENRON, one of the most successful and even considered as the 7th largest corporation in America, due to the fraudulent acts by the top management. Enron executives, like some other companies, were allowed to manage their own employee pension funds, which unfortunately, they messed up. They include the shared beliefs and shared values. This is IvyPanda's free database of academic paper samples. Cunningham, Gary and Harris Jean. An excellent book on Enron entitled “The Smartest Guys in the Room” is a great book to read, if you get a chance. Enron Case Review: The Smartest Guys In The Room 975 Words 4 Pages Prior to watching the movie "The Smartest Guys in the Room" and learning in class in depth about the Enron scandal and the counterparts that had hands in it I didn 't know much about it nor the effects it had on the way companies are regulated today. The database is updated daily, so anyone can easily find a relevant essay example. It cannot harm some to benefit others but treats all equally. Enron: The Smartest Guys In The Room. This leads in business being executed in any way and thus there is no perfection. IvyPanda. Similarly, many criminal accusations were prosecuted against several Enron company’s top executive officers. The organized structure and policy of Enron clearly did not prevent unscrupulous activities like the artificial electricity scheme (GUIDESTAR 1). TimeLine Theatre – Enron Study Guide 4 “The powerful lesson from Enron for me is the power of self delusion and how people rationalize and deceive themselves.” —Bethany McLean, Fortune Magazine reporter and author of The Smartest Guys in the Room, quoted in the documentary film The Smartest Guys in the Room p.153.ISBN1-59184-008-2 22 McCoy, Ke vin (2005-12-28). After viewing “The smartest guys in the room”, it is readily apparent that once this company stepped off the path it was doomed to self-destruction. However, rules were skillfully, cunningly and willfully ignored though they were in place. The film examines the 2001 collapse of Enron. ... Enron: The Smartest Guys in the Room, Director/Producer Alex Gibney, Magnolia Pictures, Documentary, (2005). Enron: The Smartest Guys in the Room was a documentary film showing the real story of the largest business scandal in the U.S. where top executive officers in Enron Corporation squandered over one billion American dollars while the Corporation investors and employees lost everything. would provide both parties with reliability and predictability regarding pricing and delivery. Many people invested in the company and with the increase in the range of products, and consequently, the number of employees had to be increased. The schemes demonstrated by the management were a sign of poor leadership, bad governance, greed for money, and self-centeredness. Enron, the Houston-based energy trading company committed systematic fraud over the course of several years before finally being subject to investigation. Enron Corporation was a leading commodity, and Service Company established in Houston, Texas. As a result, many California citizens experienced blackouts, and unfortunately, two people lost their lives while Enron’s West Coast desk pocketed huge profits. Introduction Although Enron went bankrupt and disappeared ten years ago, the impacts it has made on the ethical standards never faded In 1985, Enron was born. This act was well rewarded since Enron stocks skyrocketed to generate high revenues in a short period of time. Retrieved from https://ivypanda.com/essays/smartest-guys-in-the-room/. Senior management should at all times demonstrate good governance in a company where the interest of the company should come before personal interests. Why? Santa Clara University, 2011. IvyPanda. May 15, 2020. https://ivypanda.com/essays/smartest-guys-in-the-room/. Your privacy is extremely important to us. For this tenth anniversary edition, McLean and Elkind have revisited the fall of Enron and its aftermath, in a new chapter that asks why Enron still matters. The fact that Enron hired and paid its own auditors brought a conflict of interest into the legal and financial system which created an organizational problem. Utilitarianism will analyze the amount of good that can be derived from this action. The executive officers included Ken Lay, the CEO, Chief Operating Officer, Jeffrey Skilling, Chief Financial Officer, Andy Fastow and the Accounting Firm, Arthur Andersen. Their reliance on borrowed cash for their dairy transactions was not a good organization technique. Notes Receivable & Receivable Financing Answer Sheet.docx, note receivable & receivable financing questionnaire final.docx, COMSATS Institute of Information Technology, Islamabad, Collegiate High School At Northwest Florida State, Muhammad Ali Jinnah University, Karachi • SP 19, COMSATS Institute of Information Technology, Islamabad • MANAGEMENT MISC, University of Santo Tomas • ACCOUNTING 1A&B, Collegiate High School At Northwest Florida State • ECONOMICS 10042. Enron duly recruited him to run this business and he rapidly built up a major gas trading, During this time Enron was extending its pipeline operations into a wider power supply, business, initially in the USA and then on an international scale, completing a large plant at, Teesside in the UK and contracting to build a huge plant near Mumbai in India. Ceo, two months later of business being scammed away from enron the smartest guys in the room case study public they. 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