Enron Company’s History of Rise and Fall

Enron was formed in 1985 when two natural gas companies united; Houston Natural Gas and Internorth. It is an energy trading company located in Texas, United States. The outcome of the two combinations was a pipeline system that involves all places in the United States and later spread to other places. The board chairman was Kenneth Lay, and the Chief Executive Officer (CEO) was Jeffrey Skilling. With the great transition of the Enron company, it is needful to understand the operations and how success led to failure.

Enron was an energy trading company that worked with other stakeholders. The company employees were involved in stock options and bonuses. Their role was to build a bankruptcy risk management plan through their employees to acquire deals. They invented commoditizing of unique markets in water and transacted virtual assets, which involve approximately 80% of their whole balance. The employees were involved in creating deals with the stakeholders and finding clients to invest in the company. According to the chairman of the board, Kennet Lay, the company was guided by RICE; Respect, Integrity, Communication, and Exists (Mercado, 2011). They believed themselves to be innovators, and each day, they had new ideas for progressing their organization.

The Enron Company was involved in a scandal that made it fall. It had unclear trading since their balance sheet was hidden; not even the employees who worked towards those balance sheets saw it. The company leaders were involved in negative deals; they used their employees to do negative deals by tricking them using stock options and bonuses. Using the stock options and bonuses, the leaders gained profits using long-term profits of the money invested. The company was corrupt since they frequently raise their stock price and built power plants to hide their real image. Generally, Enron leaders were greedy and wanted quick money which led to their bankruptcy. Taking advantage of the energy crisis problem through deregulation, the company placed a high bet on prices.

Enron company was misrepresented by the leaders; the entire issue occurred when the two greatest deceits, Jeff Skilling and Andy Fastow, were in authority. They employed accountants and applied accounting orders to hide its operation from the public. Enron company concealed its balance sheets compared to other companies it made deals with. In most deals, they were involved in dealing with finances, especially savings of clients with a promise of high interest after some time. Their profit was determined by the time the money was invested, and great bonuses were rooted in profits and the selling of stocks. They attracted several people to invest in their sales. Through their employees, they networked with several clients and companies.

In the beginning, the company had a high vision with a clear description of what they are. They believed themselves to be innovators, and each day they came up with new ideas to promote the company. They were bold; every activity of the company was transparent and satisfying. The Enron company viewed themselves as ambitious; they face their goals with ambiguity. They were considered one of the greatest companies in the United States after becoming successful over a short time. However, towards the end, they had a bad reputation and fell. The company was considered greedy; they invested way more than they had and formed a partnership. Enron was misleading; they misled the regulators and investors. Additionally, when the employees were building deals, they created a different image of the outcome, misleading people.

The company was arrogant; they risked investing in more than what was present. Enron was on crack; after discovering their deals, it split; the leaders declined the break and gave a wrong impression. It was deceptive; they had a false impression on their employees and investors. The employees became rich quickly and were never questioned about the deep part of quick money. For instance, Brian was asked by Courtney about the change of lifestyle within a short time, but he had no answers (Mercado, 2011). Moreover, with the empty promises on investments, clients were convinced and invested.

The loss of jobs for Enron employees, Worldcom, and other accounting firms is disappointing. The employees were less involved in the activities of the companies, which made them fall. Through the scandal in Enron Company, they lost their reputation and fell. Some employees had invested in the company, and that made them have a great loss (Paulsen, 2002). I feel these companies should find a way of helping their employees after the loss. Short notice should be given to employees before being fired.

The case of Enron employees is an example of what employees go through. Most companies face similar challenges which adversely affect people’s life. The employee’s role and rights should be clear upon signing the contract before beginning to work. This will help avoid unfairness if the jobs are terminated. In addition, poor leadership in companies should be addressed. Organizations must consider transparency in organization and customer satisfaction without raising suspicions.


Mercado, N. (2011). The Crooked E – The unshredded truth about Enron (2003). YouTube.

Paulsen, S. (2002). Workers lose jobs, health care and savings at Enron. World Socialist. Web.

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1. BusinessEssay. "Enron Company's History of Rise and Fall." January 16, 2023. https://business-essay.com/enron-companys-history-of-rise-and-fall/.


BusinessEssay. "Enron Company's History of Rise and Fall." January 16, 2023. https://business-essay.com/enron-companys-history-of-rise-and-fall/.