The culture at Enron was about obtaining monetary gain and this was supported and encouraged by executives. They promoted a culture of arrogance and made employees believe that they could take high risk with no consequences imposed. It was described in the documentary as the “survival of the fittest”. They put in place a peer evaluation that would cause staff to divide in order to survive. They referred the evaluation to “rank and yank”. This rewarded innovation and eliminated the ones viewed as weak. Each division was then forced to fire employees that ranked low in the peer evaluation. The competition for growth was not solely external, but internal among …show more content…
Merrill Lynch entered a deal with Enron where they would allow Enron to purchase the bank in 6 months slots with a 15% guaranteed rate return. The bankers contributed to the fraudulent manipulation of income statements. Merrill Lynch also assisted Enron in selling Nigerian Barges, which resulted in a $12 million earning, allowing them to reach their 1999 goal for that year. The bank also replaced an analysis they ran that could have save Enron, but because it would ultimately hurt the executives, they chose not to disclose.
Arthur Andersen responsibility was to guarantee accuracy with all financial bookkeeping and internal pecuniary. Andersen’s finding were used and trusted by investor and potential investors to gauge the health of the company. His company’s reports were valued and utilized to make investment decisions. Unfortunately, the repots held false information. In addition, there were conflicts of interest because some of Andersen executives seek out and obtained jobs in the Enron Empire. Andersen was able to easily manipulate reports knowing they would gain from both sides. …show more content…
Because of this, he would reassure potential prospects, but was obscurely ridding his share from the company. He was guilty of using internal information not available to the general public for his personal gain. He also falsified reports that were made public to mislead stakeholders about the poor condition of Enron.
Fastow was the CFO of Enron. He concealed a lot of money through the SPE projects. It was estimated that he was able to hide debt of over $1 billion dollars. He ultimately profited over $30 million from SPE partnerships to get returns that were written off as gifts from family members and investors. Fastow was successful in manipulating financial statements to hide losses, employee stock sales, and excessive expenses. Fundamentally, All of them contributed to the collapse of Enron for the same reason. They all had the greed desire of personal wealth. Although most of them have been persecuted, Pai escaped untouched.
Briefly describe the impact Enron 's corruption had on