The Collapse of Enron: Managerial Aspects

The Collapse of Enron: Managerial Aspects

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Executive summary What I said. It is not the conclusion that the true about Aspects. You check out this article for home elevators what you need to know is Aspects. Aspects Its revenues made up Us 9(4) billion, assets equaled () billion, and the number of employees reached more than 30,000 people in 20 countries nearby the world. While Enron Corporation was so extremely praised by the outside observers, internally it had extremely decentralized financial control and decision-making structure, which made it practically impossible to get coherent and clear view on corporations' activities and operations. Of course, the question was not exclusively due to poor managerial performance, all the departments of the corporation were complicated in the ruining corporate ethical values and principles, but executives and managers bear primary responsibility for the absence of corporate culture, clear responsibility and transparence of the company. If operations administration worked properly, in its full force, and if it was given possibility to work in such a way, there could be a opening of escaping the tragedy. Enron Corp brief history Enron Corporation was one of the largest global energy, services and commodities company. Before it filed bankruptcy under lesson 11, it sold natural gas and electricity, delivered power and other commodities such as bandwidth internet connection, and provided risk administration and financial services to the clients nearby the world. Enron was based in Houston, Texas, and was founded in July 1985 (though company with Enron name emerged still in 1930 (Swatz, Watkins, 2003)) by the merger of InterNorth of Omaha in Nebraska, and Houston Natural Gas. Enron company fast advanced from merely delivering power to brokering power futures contracts on deregulated power markets. In 1994, the company started to sell electricity, and in 1995, it entered European power market. By the middle 2001, Enron employed about 30,000 people globally (McLean, Elkind,2003). Questionable accounting methods and techniques provided Enron with possibility to be listed as seventh largest United States company and was imaginable to dominate the store which the company virtually invented in the communications, weather and power securities (Bryce, 2002). But instead the corporation became the largest corporate failure in the global history and an example of well-planned and institutionalized corporate fraud. Enron became wealthy due to its pioneering marketing and promotion of power and communications bandwidth services and risk administration derivatives, along with such innovative and exotic items as weather derivatives. In 1999, Enron launched an initiative of buying and selling access to high-speed Internet bandwidth, and also Enron Online was launched as a Web-based trading site, development Enron e-commerce company. In 2000, the reported revenues of the company made 1 billion. It had stakes in practically 30,000 miles of gas pipelines, whether owned or accessed 15,000 miles of fiber-optic network and had stakes in global operations on generating electricity (Thomas, 2002). In the result, for five years in a row, from 1996 to 2000, Enron was named "America's most innovative Company" by Fortune magazine, and headed the list of Fortune's "100 best clubs to Work for in America" in 2000. Enron reputation was undermined by rumors on bribery and political pressure with the objective of securing contacts in South and Central America, Philippines and Africa. The Enron was blamed to use its connections with Clinton and Bush administrations to express pressure in their contracts. The events were followed by a series of scandals animated irregular accounting methods bordering on fraud which complicated Enron and Arthur Andersen accounting firm and led Enron on the verge of undergoing the largest bankruptcy in economic history in November 2001 (Emshwiller, Smith, 2001). Since Enron was all the time thought about a blue chip stock, the bankruptcy was a disastrous and unprecedented event in the global financial world. Enron's downfall was specific when it was found out that a essential share of its profits resulted from deals with so-called special-purpose entities, dinky partnership under control of Enron. It resulted in the possibility of not reporting many of the company's losses in its financial statements. The final plan of Enron's bankruptcy included creation of three new businesses which would be spun off the company. The reorganization process started in 2003 with the creation of three clubs - CrossCountry Energy, Prisma power International, and Portland general Electric. CrossCountry power was sold to Cce Holdings L.L.C., with the money to be used for the refund of the debts, while Prisma power International and Portland general electric should emerge as independent clubs descendant of Enron (Swatz, 2003). Operations administration scope of functions To understand the reasons of this bankruptcy and the level of managerial implication in the quality performance of the company, particularly that of operations management, it is essential to figure the main functions of operations administration and impact it should have of functioning of the organization. The essential task of operations administration is efficient transformation of inputs into "desired outputs" of the company (Shafer, 1997). The outputs are traditionally understood in manufacturing and profit-making context within the organizations. But recently it has been recognized that operations administration is a discipline which is not dinky with such narrow functions; it can be deployed in practically any area where the society aims at achieving its objectives (Barnett, 1996). For instance, non-profit or public sectors have to learn to optimize their internal operations and processes in the situation of dinky resources; assistance clubs come to end that by reappraising their delivery process they can revolutionize and significantly enhance their arrival to manufacturing clubs and their marketplace. Robin Wood (2001) gives the example of such operations administration implication in Daewoo company, which understood that it can specialize and differentiate its product by adding specific bundle of benefits to its product which includes additional supporting services. Operations sector is the heart of these changes that are made by prominent clubs to enhance their performance and increase buyer base. The survival of commercial company depends on quality of the society to focus and shape its operational resources to meet the expectations of its stakeholders: customers, employees and shareholders, expressed in organizational strategy (Russel, 1995) . Irrespective of economic sectors the company operates in, the quality of operations administration of this company to fulfill those above-mentioned tasks depends on their understanding that it is essential to make trade-offs. They cannot avoid the situation of working under constraints and have to understand their capabilities and constraints to contribute essential inputs into strategic decision-making process animated additional resources of the organization. Operations managers in the organizations are not empowered to make strategic decisions, but they play prominent role in shaping the organization's strategy and conduce to the strategic thinking ( Pasternack, Viscio, 1998). Operations managers should be able to translate strategic aims and objectives into clear operational objectives and actions and to implement, organize and enhance the products of the company themselves and the processes of their delivery. They have to know how changes incorporated to external factors influence the performance and how changes in one aspect of the operating theory influence other aspects. Also, operations managers need to know how technological changes impact organization's quality of delivery, and to concentrate their conclusions into strategic process (Peters, Waterman, 1982). Therefore, the heart of operations thinking includes the quality to think dynamically and systematically across time and space (Miller, 1998). Also primary tasks of performance management, new perspectives and objectives emerge connected with the emergence of new trends and developments of operations management, such as total quality management, shop floor control, global contribute chain management, manufacturing planning software, and others. Total quality administration has come to be one of the most prominent developments of the operations management. The quest for higher level of products and services quality is caused by the globalization of markets, on the one hand, and increasing litigation over assistance or product failure. The relationship in the middle of quality and store share performance is doubtless. Those firms that fail to understand the issue of quality find themselves on the lowest of their business hierarchy. A essential share of the responsibility for quality standards rests on the operations manager. Global contribute chain administration is an additional one very prominent component of operations management. The world cheaper is becoming more global than ever. Looking for lower output costs, more flexibility and local risk reduction, clubs are seeking to outsource and yield services and products on global scale (Heizer, 2004). performance managers are responsible for fulfilling the task. Task administration is yet an additional one task of the operations administration department. performance managers bear responsibility for numerous projects which range from essential capital projects to specific ones such as installation of new data system. Effectively managing projects involves fulfillment and delivery them in timely manner and within the budget (Stevens, 2001). In a word, operations administration is essential component of the organization, since it fulfills numerous prominent functions of the company. Operations manager handles daily running and functioning of the organization. The implication of poor managerial performance for the collapse of Enron Corporation Now it is essential to find out and analyze whether operations administration of Enron Corp performed all the functions mentioned above and what was the quality of their activity. The Enron did have operations administration department, which, according to their valid source, fulfilled the following functions: setup accounts and forewarn utilities, branch bargain from customer, verify the format of invoice, setup invoice data transfer, test algorithms of invoice and file replacement to the customer, decide the reporting requirements of the buyer (Enron power Services, 2000). As it is seen from the source, the functions of very operations administration branch are very limited. There are other administration departments which accomplish the functions of operations administration stated above: operations installation management, commodity management, power asset management, financial operations, and capital management. Though, most of functions performed by these departments, according to the source, are purely menagerial and lack integration, systematic vision, responsibility, control and creative aspect. Also dinky scope of functions assigned to operations administration in Enron Corporation, an additional one prominent point concerns the quality of their performance and comprehensive corporate culture and climate created within corporation. As it was mentioned above, ideally, the functions of operations administration contain creating ethic values, integrity, competence and clear responsibility within the organization. Enron's administration failed to comply with these tasks. Read the full version of this article here. I hope you get new knowledge about Aspects. Where you'll be able to offer use within your life. And above all, your reaction is passed about Aspects. Read more.. The Collapse of Enron: Managerial Aspects.

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