We watched the movie of Enron Scandal on Tuesday during Global Ethics class. I have to say, humans, indeed, can have really nasty minds. It is quite incredible to see how Lay, Skilling, Fastow, and other shareholders can be so smart at manipulating the truth; however, they used their smartness in the wrong way. This is also why they were destined to fail, sooner or later.
I still remember what Ishmael said about Takers being greedy and their ultimate goal is to control the whole universe. In Enron's case, the company itself is a huge Taker. The ultimate reasons of why they bankrupted are because of pride, arrogance, intolerance, and greed. They will do whatever they need to do to make profits. The part of Enron shutting down electric power in California struck me the most. Enron shut down the electric power in California to make profits while many Californians suffered because of Enron. Also, and the conversation between two investors is simply nasty! Despite all the swear words in their conversation, I felt very disgusted by their attitude... How can people say such things like that? How can people make profits out of people's suffrage without feeling guilty or ashamed? They must know their actions are unethical, however, they did not stop it. There was no way for them to stop the actions because of greed.
I believe the Enron Scandal put businesses in the US and around the world on alert. Under free trade marketing, there is only agreements but not laws. It is easier to manipulate details under those agreements. Those agreements are like the Law of Aerodynamics. It is important for businesses to follow the Law of Aerodynamics to have a fair play in trade markets. Or else, the business will crash like a plane that is not made according to the Law of Aerodynamics.
So, how did the trail go in 2006? What are some effects of this bankruptcy?
- Ken Lay guilty of all six counts against him; Judge Sim Lake finds Lay guilty of four counts in separate personal banking fraud trial. The jury finds Jeff Skilling guilty 19 of the 28 counts against him. Ken Lay died of a sudden heart attack on July 5, 2006 before the final sentence was made. (source)
- Enron sold its last business, Prisma Energy, in 2006. In early 2007, it changed its name to Enron Creditors Recovery Corporation. Its goal is to pay off the old Enron's remaining creditors and wind up Enron's affairs. (source)
- Both Wall Street Journal and Business Week calculated the direct loss of Enron bankruptcy: about 40billion and 90 billion USD. The loss is equal to nine times the loss of 911 Terrorist Attack (about 10 billion). The impact is not only limited to economical aspect, but also damaged US investor's confidence.
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Just another thought of my own: the Enron case made me think of the Lehman Brothers bankruptcy. Although the Lehman Brothers bankrupted because of mortgage crises; however, it still has huge impact on the economy around the world. Over 25,000 employees of Lehman Brothers became unemployed. I felt unbelievable that a leading company like Lehman and Enron can collapse in only a short period of time! Both of them are indeed human tragedies.
3 comments:
I like the way you use the Law of Aerodynamics as a metaphor for the game rules in the business field. Just like you mentioned, no matter how tricky or devious those Enron leaders may be, if they don't have a fair play in trade marketing, they will crash eventually.
Similar to you, I also find the conversation between the investors disgusted and wrong. It reminds me one of the scene in the Disney movie "The Incredible," where the boss of the insurance company were yelling at Mr. Incredible because he was doing what was right, instead of cheating on his costumers.
You mentioned that the Enron Scandal put businesses in the US and around the world on alert. I also think it made people all around the world alert too (alert about what they are investing in).
Wow, I totally forgot about the laws of aerodynamics!! I like your connection there!!
Great post! I think that the people in Enron were some of the smartest people in the room because they'd never have been able to get away with what they did if they weren't. I agree with you on that. I can't really offer any suggestions, I think that your post was excellent as it is!
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