Enron Employees Enron Corporation Is Term Paper
- Length: 5 pages
- Subject: Business
- Type: Term Paper
- Paper: #18870296
Excerpt from Term Paper :
Former Enron employees reported that important documents continued to be shredded despite federal subpoenas and court orders, which prohibited the practice. The employees' condition was so severe that the word "enron" was coined to mean getting victimized or wronged by the company or boss. An "enronian" came to mean an employee or investor who suffers from corporate scandal or corruption through no fault of his or her own. It means going to work on a particular day and getting informed by the manager that the company was out of business and that one's service was no longer needed. It meant receiving the bad news without warning and with no severance pay (Wikipedia, Cable News Network).
Displaced Enron employees stood to learn from their experience that working for a large and seemingly stable company, which promises a lot of incentives and benefits and offers security, is not an assurance that it will deliver what it promises or offers. The larger the company, the greater the expenses it makes in order to survive or stay on top. Employees need to realize that their company has other loyalties to sustain. Enron had political ties to sustain and these ties needed large sums of money. Enron was embroiled in rumors of bribery and political pressure to secure contracts in Central America, South America, Africa and the Philippines. Special mention should be made about the controversial $3 billion contract with the Maharashtra State Electricity Board in India where Enron officials were rumored to have resorted to political connections within the Clinton and then Brush administrators to pressure the board.
These employees could have done something different if they were given the chance to, but they could not be given that chance. If they knew completely and exactly how their invested labors were going, they could have taken legal action to protect their interest. But management would not let them know. Management could only either apply optimism that it could solve its problems or simply justify what it was doing to make the organization survive, although management executives and officials would not guess what to do when they reached their limits.
But there were employees from the Enron ranks who should have known or recognized the impending collapse and taken some steps based on their knowledge to save the employees. These were those on the higher ranks and had access to confidential information or knew what the bosses were doing. But these trusted employees chose to leave the fate of lower-level employees into the hands of these executives and officials. They did not give these lesser employees the choice to do something for themselves and their interest. It was all a matter of a moral sense of responsibility on their part, which could not be entirely evaluated and tried in a court of law.
The collapse of Enron led to the U.S. Sarbanes-Oxley Act of July 30, 2002 (Wikipedia 2006). It provides stronger penalties for fraud and requires public companies to avoid making loans to management, to report more information to the public, to maintain stronger independence from auditors, and to report on have financial control procedures audited. The law established governance reforms on th New York Stock Exchange and became the most consequential reorientation of corporate behavior in American history (Wikipedia).
Former employees and investors of Enron can pass on the wisdom of their experience to present and would-be employees and investors of other companies to prevent a repeat. They can insist that a strong labor union be established, if there is none yet. They can bargain for the inclusion of safety measures, which would render management financial statements really transparent and oblige management to inform them about the true state of the organization on a regular basis, short of a participative nature of power-sharing. They can also initiate a move to urge Congress to pass legislations securing their positions and interests, especially in very big companies. The labor sector should continuously lobby for its interests in both Houses in response to these developments and in preparation for probable problems linked to these developments. They can learn from the fate of former Enron executive J. Cliff Baxter, who committed suicide because of the scandal (Hanson 2002).
1. Cable News Network. (2002). FBI Talks to Enron Employees. AOL Time Warner Company. http://www.search.yahoo.com/search?ei=UTF-8&p=Enron+employees&fr=slv1-&b=11
2. Hanson, E. (2002). Attorney General Orders Release of Ex-Enron Executive's Suicide Note. Houston Chronicle. http://www.chron.com/disp/story.mpl./special/enron/1361816.html
3. Wikipedia. (2006). Enron…