Enron’s Stakeholder Impact Case Analysis Essay - 1725 Words

Introduction: Widely known as the champion of the energy industry, Enron is suddenly faced with a corporate crisis in the form of a scandal. This scandal involves not only Enron’s accounting practices but also its corporate governance and culture (Lawrence Weber, 2008). This report will recommend some potential strategies for Enron to move forward from the scandal. To do this, we must incorporate stakeholder theory, which â€Å"argues that corporations serve a broad public purpose; to create value for society† (Lawrence Weber, 2014, p 6.). This means that Enron must take responsibility for the scandal it created and take actions to regain its stakeholders’ confidence. To accomplish this, we will first identify and analyze Enron’s primary†¦show more content†¦They could decide not to file lawsuits and continue to support and help rebuild the company. This is not an easy task considering that the company broke their trust. Other significant stakeholders that deserve priority are Enron’s employees. The employees present threats to Enron in two ways: they can form coalitions to exercise their legal rights, and they can also leave the company. They will most likely sue the company as they have lost vast amounts of their retirement savings (Moscoco and Deans, 2002). The urgency in this situation matters a lot as some employees are reaching their retirement age. When it comes to employees leaving the company, it is important to note that these employees have the necessary skills and are essential for the business to succeed. Here is where we see the opportunity. How is Enron going to recover without them? That being said, Enron has to do something to retain its employees. Lastly, the third stakeholder is the U.S. government, especially the Securities and Exchange Commission (SEC). The U.S. government has tremendous legal and political power. They have the ability to sue, penalize, and create special regulations against Enron. Because the government’s interest is to protect the public’s interests, it is likely that the government will sanction Enron for its scandal (Lawrence Weber, 2014). Nevertheless, we still see a possibility for Enron to pull theShow MoreRelatedArthur Andersen: Failure to Report Accurately Essay1214 Words   |  5 PagesEnron Corporation has been accused of cooking the books and overstating company profits in its financial reports. In addition, Enron’s trading business adopted mark-to-market accounting, which meant that once a long-term contract was signed, income was estimated as the present value of net future cash flows, even though in some cases there were serious questions about the viability of these c ontracts and their associated costs. 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