Category | Asssignment | Subject | Management |
---|---|---|---|
University | Module Title | Ethics, Sustainability and Governance |
Enron focused too much on short-term profits, which required long-term social capital. The company designed its controls in a way that caused problems for board, auditor, regulatory, and even market oversight. This led to a loss of credibility, which ultimately led to the company's downfall. Top management was given percentage options to focus on short-term stock price growth, which concealed indebtedness and artificially inflated the stock price using special-purpose corporations. These tactics may have benefited the company in the short term, but ultimately caused great damage to transparency and credibility.
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