The Unexpected Collapse of Enron

Colleen Long


Apr 3, 2010

Kemit Grafton

The Sudden Collapse of Enron

Beginning in 85, Enron was formed through a merger of Houston Natural Gas and Internorth, Enron Corporation. It absolutely was the first nationwide gas pipeline network, which altered its concentrate from control transportation of natural gas to unregulated energy trading marketplaces. Enron was obviously a huge firm that traded electricity, petrol, gas, materials, and other factors. " The guiding principle has been that there was more money to be produced in buying and selling economic contracts linked to the value of energy assets (and to other economic variables) than in actual ownership of physical assets” (Jickling, 2002). For example , Enron would sale long-term legal agreements to sell energy at a set price. Basically, these deals would allow the buyers to avoid the risk that may potentially increase energy rates posed for their business. Yet , the markets that Enron traded with had been largely unregulated, with no credit reporting requirements and little info was obtainable about the extent or perhaps profitability of Enron's derivatives activities (Jickling, 2002). The organizational patterns theory that is discussed will be about the systems theory and backup theory. These two theories clarify why an organization like Enron failed. As well, the underhanded contribution made by management and leaders in the company played a huge portion in the business collapse. Dialogue

For instance, the company behavior theory that Enron should have adopted was the devices theory. " Systematic details look for triggers outside the group, for example inside the environmental makes that drive or immediate groups or individuals to do one thing instead of another” (Judge, & Robbins, 2007). Systems theory may be the foundation that components of an organization are interrelated, and that a single variable can adjust or have a great...

References: Bauman, E. (2002). Not Business as Usual. Gathered from

Jickling, Meters. (2002). The Enron Failure: An Overview of Financial Issues. Recovered from

Robbins, S. & Judge, T. (2007). What is Company Behavior? (Chapter 1). Prentice Hall, Inc. A Pearson Education Company.

Walonick, M. Ph. M. (2010). Organizational Theory and Behavior. Retrieved from


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