History of Enron
Enron Holding was one of the well-known corporations in the United States. Its bankruptcy made it famous around the whole world, and the reasons for its fall are still under discussions of many people and educational institutions. The history of Enron began in the middle of the 1980s when two companies, InterNorth and Houston Natural Gas had to merge. In the year of its creation, 1985, the main and the only goal of the company was the production of energy and various energy-related products (“The Rise and Fall of Enron” par. 1). In a short period of time, Enron started its trading activities and turned from an ordinary energetic company into a kind of energetic bank that dealt with a number of activities connected with energy consumption, production, and distribution. In 1990, Jeff Skilling was hired to Enron (“The History of Enron” par. 3), and in 1996, this person became its President. According to the president’s initiative, the company tried to conquer the water utility market.
In 1998, the company bought Wessex Water and used it as the main water unit. More than 20,000 employees got a chance to work on Enron in different countries around the whole world. The necessity of electricity, natural gas, and appropriate communications put the company in demand. In 1999, the company launched one of the first global commodities trading websites that made Enron famous in the world. More organizations wanted to cooperate with Enron. Enron was also able to develop the political relations and supported the campaign of George Bush. The fact that Enron was defined by Fortune as “No 1 in quality of management” (Markham 3) provided the company with the rights to get involved in different activities.
In 2000, the incomes of the company were more than $100 billion. The success of the company was amazing. However, the company’s vice-president informed about the doubts concerning the latest accounting practices (Wu and Olson 12). Still, Skilling did not pay enough attention to this concern. The result was dramatic to the company. In 2001, the famous Enron scandal took place based on the fact that Enron gave false financial reports. The representatives of White House introduced their intention to support the collapse of Enron as the solution that created little risk to the economy of the United States (Fox 226). The corruption that spread in the company influenced the ways of communication and the desire of the employees to share information (Aven 982). It was an unexpected discovery that made a number of people re-evaluate their attitudes to the development of business.
Until the end of 2001, Enron lost more than $600 million. More than 4,000 employees were fired and deprived of the possibility to have pensions because of their direct dependence on Enron shares. After 15 years of its existence, the bankruptcy of Enron was the most unexpected news that changed the lives of many people. Though Fastow was blamed for the crimes in 2006, his incomes could hardly cover the losses the country and all stakeholders of the company suffered from. The blame of Skilling and Lay was also proved. Lay died because of heart attack, and Skilling had to respond to the crimes committed by the company.
In general, the history of Enron was one of the brightest examples of how a company could be developed and succeeded in a short period of time. At the same time, its history remains to be one of the most dramatic in the American economic world.
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References
Aven, Brandy, L. “The Paradox of Corrupt Networks: An Analysis of Organizational Crime at Enron.” Organizational Science (2015): 980-996. Web.
Fox, Loren. Enron: The Rise and Fall. Hoboken, NJ: John Wiley & Sons, 2004. Print.
Markham, Jerry, W. A Financial History of the United States: From Enron-Era Scandals to the Subprime Crisis (2004-2006). New York, NY: Routledge, 2015. Print.
“The History of Enron: Once a New-Economy Trailblazer, Now Beleaguered and Bankrupt.” NPR (2002). Web.
“The Rise and Fall of Enron: A Brief History.” CBC News (2006): n. pag. Web.
Wu, Desheng and David, L. Olson. Enterprise Risk Management Models. Lincoln, NE: Springer, 2010. Print.