Provide critical arguments in support or against the statement that Essay

Provide critical arguments in support or against the statement that 'Leaders from Enron are accountable for its downfall as th - Essay Example Though the company seems to be very highly praised by outsiders but internally the company had a much decentralized decision making structure and financial control system which made very difficult for outsiders to get a clear view of the company activities and its operations (O’Rourke, 2007, p.199). This problem is not only due to the poor managerial performance but also due to the departmental issues which are involved in the process of ruining the ethical values and the principles of the company. The executives and the managers are the primary people responsible for the downfall of the company for not maintaining the corporate culture and transparencies in the business process. If the operational management team have worked in a proper manner in full force it could have been possible for Enron Corporation to escape the tragedy (Spedding & Rose, 2007, p.543). About the company Enron being one of the most innovative companies in America for six consecutive years and was ranked 7th on the fortune 500 companies. The Houston, Texas based firm was considered as one of the greatest energy trading companies of the world (Sterling, 2002, p.111). In the year 2000 the company reached its summit with above 19,000 people and approximately with a annual revenue of more than $100 billion. The mission statement of the CEO Kenneth Lay was not only to become the greatest company in the energy sector but also to become the world largest company. With the deregulation in the energy sector during 1980’s the business became very risky both for the customer as well as for the companies. At this critical situation Enron came with an indigenous solution of leveraging its large network of pipelines for the construction of the gas bank to act as intermediary in the transaction process which in turns lowers the risk in the market. Enron introduced a concept of buying and selling on a certain dates at a certain price with an extra premium to ensure safety against risk. The man behind this innovative idea came from the CEO and President of the firm Jeffrey Skilling. He then introduced many more products along with the gas bank. The products include various derivatives of energy and swap for Enron’s trading partners and stakeholders (Fusaro & Miller, 2002, p.31). These products give the option to the people to buy gas in the future at a predetermined fixed price which gives the company the opportunity to trade at a fixed price even when the market price is floating. This innovative strategy gave the firm immense opportunity growth irrespective of the market condition (Lawrence & Weber, n.d., p. 450-451). Rise of Enron With the new innovative way of business Skilling began to change the whole corporate culture of Enron. He recruited the best professionals from the industry to compete with the largest and most prestigious investment banks. With the immense growth and reputation for the outsiders the internal culture slowly transformed to a darker t one. With the harshest employee ranking system,