Enron And The Gas Pipeline Industry - 772 Words

Expanding its business by utilizing its energy-trading model, Enron’s top executives fooled major financial institutions and accounting firms by hiding its losses from these new ventures within its financial statements. In the beginning, Enron was revolutionary in the gas pipeline industry, because it took advantage of the deregulated environment. As a result, Enron could ensure their customers, gas suppliers, consistent gas prices through hedging (Healy and Palepu 2). Enron’s success with this energy-trading model built its trustworthiness in the energy industry and beyond. Obviously, Enron proved its ability to successfully turn a profit with earnings of $979 million in 2000, which further instilled cognitive-based trust within its stakeholders (Healy and Palepu 1). Establishing itself as a progressive corporation, Enron sought to unload its heavy assets, such as pipelines, for lighter assets in the realm of the digital age. Furthermore, Enron management attracted the best employees to work for them by offering extremely generous salaries and bonuses. Another benefit of being an Enron employee was that Enron maintained a non-bureaucratic environment through committee-based employee performance evaluations (Healy and Palepu 4). Overall, Enron’s financial strength, cutting-edge ideas, and high-performing workforce established cognitive-based trust within its stakeholders. However, Enron’s executive management allowed hubris and greed to gain a foothold in its operations,Show MoreRelatedEnron And The Natural Gas Industry1542 Words   |  7 PagesEnron Background: Enron, based in Houston, Texas, was founded by Kenneth Lay as an energy and pipeline company in 1985 from the merger of two natural gas pipeline companies, Houston Natural Gas and InterNorth. 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