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The Enron Corporation Scandal Yolanda M. Allen Business Law I/LEG 100
Strayer University
Instructor: Prof. Bryan Smith
20 August 2011

The Enron Corporation Scandal Describe how Enron could have been structured differently to avoid such activities.
The origins of Enron started with the merger of Kenneth Lay’s company, Houston Natural Gas with InterNorth, a Nebraska-based pipeline company in 1985. Initially, from the beginning, Enron began to show some cracks in its structure, as the company started acquiring huge amounts of debt during its foundation, and as a result of the deregulation of gas pipelines, it no longer had exclusive rights to its own pipelines (Thomas, C.B., 2002). To solve Enron’s credit and revenue problems, Kenneth Lay, CEO hired Jeffrey Skilling, who eventually became the company’s Chief Financial Officer to the CEO in 1996. Almost overnight, Skilling turned Enron into a major market middleman for energy that would dominate the trading market. After many years of seemingly huge successes, more cracks began to appear in the Enron crown. In the final analysis, the conspiracy of Lay, Skilling and others led to the collapse of the company due to fraud, false reporting of revenue, shoddy accounting practices and a general disregard for virtually every tenet of business ethics.
Building a robust ethics infrastructure that is self-sustaining, by composing a sound code of conduct that supports the top level, and communicating it to all employees, and assuring compliance with the Code of Ethics (Nakayama, 2002). Corporations that are open about their ethical standards and conduct seem to be more trustworthy than those who stay silent. Some issue an annual report of their ethics accomplishments and the challenges they faced. Other corporations openly post their vision, values and codes of conduct on their web sites for public...

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