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Essay / Research Paper Abstract
This 3 page paper discusses some of the strategic errors Enron made. Here was a company named as the most innovative corporation by Fortune Magazine for six years prior to its total collapse. The writer discusses errors made in diversification and in human resource practices within the company. Bibliography lists 3 sources.
Page Count:
3 pages (~225 words per page)
File: MM12_PGen3.rtf
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Unformatted sample text from the term paper:
to its trades and the effect these had on the energy crisis in California although Enron did not play as great a role in this crisis as did other energy
corporations (Leonard, 2001). The company was raking in billions of dollars in its trade deals (Leonard, 2001). Then, the Spring of 2001 came and rumors began floating that Enron was
in trouble (Leonard, 2001). This essay does not focus on the unethical business practices of the corporation, it looks at the strategic planning and management errors the company made.
One of Enrons biggest strategic errors was the amount of diversification it took on. In an attempt to gain a competitive advantage and to enter yet another industry, the company
invested heavily in fiber optics (Leonard, 2001). The plan was to trade bandwidth as a commodity just as it was trading gas and electricity (Leonard, 2001). The corporations investments
in bandwidth, in fiber optic capacity and in other telecommunication venues proved to be expensive and disastrous because the telecom sector crashed (Leonard, 2001). The corporate management did not see
the problems that telecommunication companies would soon face. Instead, it dove into the industry with massive investments because the industry seemed to be on a continuing growth streak. Enron
did not use proper or prudent caution in their diversification strategies. There did not seem to be a strong sense of leadership and management in the company. At least
dozens of partnerships were being established by different executives who then borrowed billions of dollars and then invested those funds in Enron (Leonard, 2001). There were no controls here. In
retrospect, it would seem that there was no accountability in the management structure, a clear case of mismanagement from the highest positions. In terms of trust, Enron did not allow
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