Enron Corporation Assignment Example | Topics and Well Written Essays - 750 words

Enron Corporation - Assignment Example Its CEO Ken Lay was one of President George W. Bush’s personal friends. Both Ken Lay and CFO Jeff Skilling and later Andrew Fastow were regarded as leaders to emulate. Smart, suave and ambitious, they were regarded as the embodiment of corporate success. But a series of events quickly turned the tables on the fortunes of this billion dollar company and its management. In fact, even its auditors Arthur Andersen were considered culpable and not only removed as incompetent, but the fallout of the entire debacle caused them to close down their businesses all across the world. In hindsight and as a result of investigations, it was determined that there were a number of reasons behind the inglorious fall and demise of this once great enterprise. Notwithstanding the obvious reasons why the CEO, CFO and some other heads of business departments worked in unison to give a highly false and misleading picture to corporate America and the public at large, it seems that they surely thought they were the smartest guys in the room and could continue to hoodwink the masses with false notions of success. Was It a Question of Structure? The puzzling fact is that why did it take so long for the facts to unravel and the truth to reveal itself. With a corporation the size of Enron, and its business interests spread all over the world, it seems amazing that the real state of affairs was kept out of the eyes of employees, what to say of the general public. Did the reporting structure have something to do with it? Auditors combing through the records of the failed corporation have noticed that the scale of the accounting fraud was widespread and resonated throughout most of the corporation. This included false and creative reporting, misclassification of assets and liabilities and other such manipulations. In fact right from 1997 till its demise, Enron top executives were concerned with over-reporting profits and revenues and understating liabilities and expenses to present an i ncorrect picture of success to the world (Maclean & Elkind, 2003). So the whole edifice was crumbling and it was a case of rampant and collusive corruption and misreporting at almost all levels. The matrix reporting structure, where one reports to a direct supervisor as well as a regional head elsewhere is suggested as a good dual reporting mechanism to prevent irregularities. Was it a Question of Exceeding One’s Scope of Authority? Another reason that has been pointed out as the cause of the demise of Enron was that executives tended to exceed their limits or boundaries of authority. In fact, Ken Lay has claimed that he sometimes did not know exactly what Skilling and Fastow were doing in terms of coking up the books and presenting a false picture to investors and the general public. But the fact remains that authority and responsibility cannot be separated. Ken Lay as CEO must be held criminally liable for the doings of his CFOs as it was he who directed them to get the res ults that were shown on the books. So, even this argument does not hold weight. Executives are responsible for their own actions and directives, no matter what the chain of command. Was it a Question of Corporate Culture? Another excuse or reason pointed for the collapse of Enron was that it was due to the corporate culture of success that the executives had created over the years. Enron had earned a name for itself under Lay, and he wanted to remain

Fair Trade Essay Example | Topics and Well Written Essays - 2500 words

Fair Trade - Essay Example From humble beginnings in the Netherlands with the Max Havelaar label, the concept of fair trade has now grown into an international movement that buys produce direct from farmers and cooperatives in 48 countries across Africa, Asia and Latin America. The promise of fair trade is simple: that the producer will be paid a fair price for his or her product over a guaranteed long-term period, protecting farmers in poor countries from the vagaries of a volatile world market. Fair-trade labelling schemes now operate in 19 countries. Growth has been so rapid that an international coordinating body -- the Fair-trade Labelling Organisation -- has been established to monitor and maintain standards. In the UK, the certification body is called the Fairtrade Foundation, which now gives its stamp of approval to hundreds of products, from snacks such as chocolate brownies to consumer desirables such as t-shirts and footballs. (Barrientos 2006) Growth rates in the fair-trade market would make even the most seasoned capitalist giddy -- sales were up 51 per cent in 2004, and an impressive 140million rang through shop checkouts under the Fairtrade label in the UK. According to the Fairtrade Foundation, three million fair-trade hot drinks are brewed in the UK every day. There is even a fair-trade lifestyle magazine, New Consumer. All this despite the fact that fair-trade products -- almost by definition -- are more expensive than their conventional competitors. This 'premium' is essentially the price Western consumers are prepared to pay to know that their purchasing decisions are ethically sound. Fair trade has become a major high-street brand, communicating certain ethical qualities about the product to the consumer in a same way that brands such as Gap and Nike sell themselves on beauty and celebrity. Not for nothing are fair-trade products often covered with pictures of smiling farmers explaining how their fair deal has become a lifeline for themselves and their families. Rather than simply giving money to charity, fair-trade consumers feel that they are participating in a less paternalistic, more sustainable two-way exchange. (Cooper 2005) In addition, fair trade is now going mainstream. The charity Oxfam is taking on the might of Starbucks with a new chain of coffee shops under the name Progreso, stocked entirely with fair-trade lattes, cappuccinos, teas and cakes. (Davies 2003) Tesco recently launched an own-label range of fair-trade products, including coffee, chocolate and fresh fruit, much to the consternation of some campaigners, who have accused the giant retailer of profiteering by marking up fair-trade produce by more than the premium that goes to producers. Even Starbucks, long a target for anti-globalisation protesters, now does a flourishing line in fair-trade coffees. Cafedirect, which pioneered fair-trade coffee in the UK, is now Britain's sixth-largest coffee brand, and recently launched a sizeable share issue on the open market. However, in financial terms, fair trade remains a niche market, concentrated on an