Organizational Change: Enron
The final sequence in the organizational change challenge differed very little from the initial sequence. Having performed well in the initial sequence, it was unnecessary to change the final sequence very much. However, two of the spots in the final sequence were changed from where they were located in the initial sequence, because it appeared that they would be in a better location and that they would more strongly benefit the company (Enron) based on that sequence. The exercise applied to Enron very strongly, because there are many changes that Enron had to address. When the scandal first hit, everyone was very shocked, but Enron tried to recover from the problems that it had seen. In order to do this, however, it was obvious that there would need to be many changes made. The Enron scandal shocked most of the nation, and seriously injured the financial life of many individuals who worked for the company. A lot of these people were nearing retirement age and everything they had worked for all of the
At the same time, they were giving the public information about double-digit earnings. In fifteen years, Enron had grown from a rather obscure company to a company ranked seventh on the Fortune 500, which would make it appear as though it was doing very well. The company began this collapse by admitting that there had been fraudulent bookkeeping, and that much of the profits it had recently made were actually balanced out by loss and charges that were unrecorded. What they did was create phony subsidiaries and use these to create the illusion that they were making a profit, but these subsidiaries were not on the accounting books that Arthur Anderson dealt with. However, Enron collapsed, and the collapse was huge. These officials effectively trapped the money of the workers in something that they knew would soon be null and void, but they took care to ensure that any officials were able to get out by selling their shares and putting their money into other stock that was doing well. The stock that was selling at $90 per share two years before the collapse was suddenly worth 26 cents per share. The changes that Enron had to make after this occurred included being controlled by an interim President until the problems could be straightened out, and using a different accounting firm, as the Arthur Anderson firm that the company was using was involved with their fraudulent practices. Specifically, there were several things that Enron and Arthur Anderson were doing that were fraudulent and had to be changed when the company was restructured. Third, Enron was not really making profits. Second, a change in the company's pension plan had been approved where worker assets were frozen in Enron stock around the time that the shares started to go down in value but officials of the company were able to sell the holdings that they had. It traded electricity, bandwidth, national gas and other commodities globally and also provided its customers with consulting services. This was obviously illegal, and the changes within the company included safeguards to stop this from being allowed to happen again. These same officials approved management bonuses of over $100 million shortly before they filed for bankruptcy. Safeguards are now in place for this as well, so that these kinds of problems can no longer occur.
Common topics in this essay:
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Acceptance Essays
