Question

Identify the key stakeholders that were affected by the events at Enron and in what way were they affected. What impact did this behaviour have on the overall image of the organisation?

Answer 1

The Enron Scandal was an ethical corporate crisis that tainted the faces of the Managing Board of Enron and its corporate leaders. The key stakeholders who were affected by the events that were caused at Enron are :

1. Executive Management, i.e The Board of Directors including the Managing Director, CEO, CFO, and other C level executives: The scandal brought about the secret doings of Enron which made them successful companies in the most unethical way possible. The involvement of the executive board i.e the knowledge of the unethical business transactions carried out by Andrew Fastow under the CEO-ship of Jeffery Skilling and the knowledge of Ken Lay impacted the reputation of the Executive Management Board as a whole and destroyed the careers fo the many executive board members.

2. The Employees of Enron: The Enron scandal destroyed the company with the company's share price losing its value and the market reputation of the company forced it to declare bankruptcy thus leading to the massive lay-offs of the thousands of the employees at Enron with no near opportunity to look forward in the future as whatever organization they joined it would carry the guilt and the taint of Enron with them.

3. The Shareholders of Enron: The coming out of the scandal brought about a severe price drop in the share price of Enron and the companies investors who were not even aware or involved in the unethical practices lost their investments in a matter of days.

4. The Audit Partners of Enron: Arthur Anderson: The unfolding of the scandal also tainted the reputation of the audit firm which audited Enron and this loss in reputation led to the dissolution of one of the top five accounting firms in the USA i.e The dissolution f Arthur Anderson.

What impact did this behavior have on the overall image of the organization?

The unfolding of the scandal sent out shock waves to the company and destroyed the comapny overall , with the comapny share price lossing its value drastically and the investors loosing billions of dollars , this short term gain policy at the expense of litigation costed Enron their own company and led to the bankruptcy of the top companies of the USA aafter Microsoft. The stock plummet of enron also affected the overall economy  and led to the downfall of the massive enterprise known as Enron. Apart formt he bankruptuca and the comapny getting destroyed the scandal also impuned the loing built reputation of Enron.