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GCU - MGT301.whitney - wk1 Enron Paper GRADED
GCU - MGT301.whitney - wk1 Enron Paper GRADED
Kenneth Lay
Kenneth Lay
Flora Whitney
Management 301
August 8, 2009
Kenneth Lay 2
The dollar, which had been backed by the Gold standard long ago, is now valued
by the “people’s” faith in our market system. The Stock market is driven totally by the
faith of its investors in the stocks they buy. When that faith turns to doubt, it is normal to
Kenneth Lay, was a Preacher’s son from Missouri, who formed Enron through the
merger of two Texan gas pipeline companies and transformed it into an energy trader, in
the United States and globally. He became the “pillar” of faith that people valued enough
to invest in. In this context, he was an important contributor to the Enron Code of Ethics.
So, when he wrote in this document that: “Enron’s reputation finally depends on its
people, on you and me. Let’s keep that reputation high”. (Lay, Kenneth, Enron Code of
Ethics, 2000, p.3), Enron established itself as the 7th largest company in the United
States, one must question how could such a pillar of faith fall so far from its stature?
The Enron collapse is the biggest scandal in the history of US capitalism. Exposed
are the systemic lying, cheating and theft at the heart of the 1990s bubble economy. Not
When Kenneth Lay hired Jeffery Skilling to expand their market base, he led
them into the world of technology, entertainment among many other markets. These
books were kept separately from the main company’s portfolio. Only the profits were
reported to the Shareholders, not the losses these investments lost. The profits inflated
the value of Enron’s stock and they made a conscience decision to hide this fact from the
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securities exchange. When the investigation of their books began, Enron used its
employee’s retirement account to bail them out and Lay knowingly offered bogus stocks
for trade.
What brought down Enron was not a lack of management; it was a lack of Ethics.
Certainly the founder of Enron was familiar with the Golden Rule: “Thou Shall Not
steal”. What brought our Stock Market to its current state is a shake in public confidence
George Bush enacted the Sarbanes- Oxley act, which has become the watchdog of
corporate fraud, has improved investor confidence, but it has also damaged the
confidence of small companies to register with the stock exchange in the United States.
The average investor, who had been counting on retirement from their investment, will
have to look elsewhere; its value has been reduced as much as 50%. Most of the people I
know have rearranged their retirement plan from investing in CDs, to taking their money
out of those funds and investing in tangible items, from antiques, collectible automobiles
and income property. Jobless rates are around 10% nationwide and Baby Boomers are
Part of what makes a company successful is the vision of its leader. They trusted
Kenneth Lay. Sure, there are risks in investing your money in anything, but when you
invest it in an established company who has a leader who is competitive and visionary;
you expect it to be a win-win situation. From the visionary leader of Enron to a common
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cheater, the fall of Kenneth Lay is the epitome of the spirit of greed’s insidious creeping
I was a banquet bartender for 8 years and witnessed this act first-hand. I had a
cash box under the bar which was not highly visible; a young woman leaned over and
attempted to grab money out of it while I was turned around. She was highly apologetic
and I did not make a big deal out of it because of the event. What struck me was that we
all see temptations around us and most of us imagine taking advantage of them. It takes
guts to actually follow through with that kind of action and turns a seemingly ethical
person into a common thief. I believe that Kenneth Lay took that step over the edge from
normal competitiveness to a common liar. He could not face that fact that his company
was losing money and he lied about its value to his stakeholders.
He certainly is not the first or the last liar on earth if the repercussions of his
actions had not affected our stock market and economy so dramatically.
Paper includes relevant material and conveys more than a general message
Adequate support is provided for assertions Be sure to give sources offering
substance. Expand your discussion what other experts in the field say (references).
The ability to link theory to practical experience is evident
Organization = 2 points
The introduction provides a sufficient background on the topic and previews major
points Creates interest
Central theme/purpose is immediately clear
Structure is clear, logical, and easy to follow
Subsequent sections develop/support the central theme
Conclusion/recommendations follow logically from the body of the paper Your
conclusion draws from the points made in the paper.
Grammar/Punctuation/Spelling = 2 points
Rules of grammar, usage, punctuation are followed
Spelling is correct
Paper has been carefully edited
Readability/Style = 2 points
The tone is appropriate to the audience, content, and assignment
Sentences are complete, clear, and concise
Sentences are well-constructed with consistently strong, varied structure
Transitions between sentences/paragraphs/sections help maintain the flow of thought
Words used are precise and unambiguous
Comments: Your writing style is good. The assessment would draw more strength
through collaboration (in-text citations) and bridging theory from the text; I would
encourage more collaboration (references) from experts in the field. Always include a
reference page.Otherwise, this paper was well executed.
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