Enron: Smartest Guy in the Room Essay

Enron The Smartest Guys in the Room is a docudrama that was produced in 2005 as a reflection of the 2003, bestselling book with the same name. The documentary was written by Bethany Mclean and Peter Elkind. The film, produced by Alex Gibney is an explicit demonstration of how reputable corporations can tumble knock down because of illicit monetary counsel. The film is about the Enron Company, which experienced enormous pecuniary drains because of the scandals elicited by its spinning top managerial team. Two years after the inception of the conjunction, two traders engage in betting activities on the lucrative oil trades.This eventually leads to suspicious profits for the companion, a phenomenon that raises eyebrows on the financial stand of the company. It is in like manner discovered that Enrons Chief Executive Officer is redirecting the companys finances to different accounts. In demonstrating the poor financial counselling of Kenneth Lay, he encourages the traders to k eep on making money for the company, yet he understood clearly that betting is a risky activity that could cause the company a pickle of its assets. Lay finally realizes his mistakes when he sacks the traders because of wasting the companys reserves through gambling.Their actions virtually disgraced the image of Enron. When the facts about what happened to the company are exposed, Lay argues that he had no knowledge of the illicit financial endeavors. Jeffrey Skilling is brought in as the new CEO and immediately imposes his own principles about handling profits and projects. Skilling adopts a management practice that engages the company in projects without examining whether the projects have the capacity to be successful or non. This is indeed, a trait that has the capacity to taunt the image of the company in respect to the management of its assets and resources.In essence, this portrays Enron as a profit making company, even if it is non making any profit. The film to a fault bring outs on Skillings theory of grading employees and firing those who do not perform advantageously, on an annual basis. In commit to fulfill his endeavors for the company, Skilling appoints Clifford Baxter and Lou Pai, who heads the Enron Energy Services. Pai is an irresponsible executive who squanders money belonging to shareholders by visiting entertainment joints. Eventually, Pai resigns having cost Enron a loss of $1 billion. After selling his stock, he purchases a ranch inColorado and becomes one of the largest landowners in the state. Despite the declining performance of Enron in the global scale, the company initiates a unexclusive relations campaign that displays itself as profitable and solid. With the short term successes that the company gets, it tries to captivate stock market analysts. Executives raise their stock prices and introduce the broadband technologies in order to distribute movies on demand, but the projects do not run across their expectations. After a series of financial irregularities, Jim Chanos and Bethany McLean expose the financial misappropriation and irregularities in stoke esteem.In response to the allegations, Skilling argues that McLean is unethical in his assertions. It is also found out that Andrew Fastow, one of Enrons executives has been defrauding Enron of millions of dollars. Indeed, this is a documentary about the fall of a big corporation because of financial misappropriation (Gibney, A. and McLean, 2005). II. digest In reference to the documentary, it is worth pointing out that the management of the company did not articulate its financial obligations in the most feasible way of life. Financial management is an integral aspect in the success of a company.A companys management should ensure that proper procedures are followed in majusculeizing on its assets in order to avoid loses in the future (Bhat, 2008 p. 65). The management teams lapse in viewling its finances led to the downfall of the company. The image of the company was put at risk because of the selfish actions of the leadership. The companys corporate image was not able to maintain its stability, bearing in mind that the media exposed the unconnected handling of the companys assets. Embezzlement of the finances led to the loss of confidence in the common eye.This is a clear indication that financial obligations are pertinent in influencing the performance of a company since, financial endowment is a primary component of expanding the image of a business enterprise (Shoffner, Shelly & Cooke, 2011 p. 36). It is also worth noting that the managements actions affected the performance of the employees. In a company, it is extremely pertinent to practice in feasible measures that will enhance military personnel capital.A well established homo capital is instrumental in providing a viable platform for proper financial management (Jones & Spender, 2011 p. 94). When the management started a program of rating and firing employ ees, this created a non-cohesive surround that did not give employees a chance to thrive. In this respect, employees could not fulfill their obligations in enhancing the capacity of the company. In addition, the stakeholders to the company lost confidence in the management team of the company because it did not deliver as it was expected of them. This affected the input of the stakeholders as well as the inseparable and external cohesion of the company.It is also critical to assert that the company faced financial implications resulting from managements failure to conduct itself in a competent and professional way. The companys markets share did not achieve its expectations since, it could not maintain stability in the stock market. The values of its shares could not compete vehemently with other companies because the company had lost its market value. Moreover, the company incurred losses in cipher to its assets record through engaging in illicit financial planning.This led to th e company failing to meet its financial objectives since, it was not in a position to control its costs. The failure of a company to control its costs leads to unaccountability and the risk of loses due to poor explanation systems (Lee, 2006 p. 201). Additionally, the company experienced a lapse in its financial accounting systems in an effort to hide the misappropriation of finances. Compromising the financial accounting systems resulted to heavy growth in the development of feasible accounting procedures (Hampton, 2009 p. 6). Another financial consequence to the company was the inability to control debts. The company could not keep cross of its debts because its financial records had been compromised by the incompetence of the management team.The lack of proper financial returns led to inconsistency in the companys performance hence, leading to an internal financial crisis. In this respect, it is viable to underscore that the financial inconsistency in a company is a contribu ting factor in its financial nuclear meltdown (Brigham, Gapenski & Ehrhardt, 2011p. 12). III. Commentary The actions of the management team were indeed unwholesome in the financial breakthrough of the company. The companys resources were put in jeopardy because of mishandling the assets in an unethical manner in respect to business standards. The employees of the company did not have a cohesive environment to capitalize on their potential. They could not handle the products and services of the company in a professional way because the management team did not provide the platform for enhancing the cost of goods.I believe the biblical worldview as Christ would view it for the church is that whatever you do in the dark will be exposed. The leger states that God hates the very presence of evil and it will have no place in his kingdom. So the catastrophic effect that this company had on society was abomination to what God would want for his people. God wants us to suffer with him and t he end result is that we will reign with him, however lying, cheating and stealing will not have a place in heaven. As part of the management team, I would have handled things differently.Firstly, it is authoritative to point out that I would not allow incompetent people to control the companys finances. Only competent people would be allowed to handle the companys financial obligations and management of the companys assets. Secondly, it is essential to assert that I would invest immensely in the employees of the company. I would ensure that human capital is enhanced in order to improve the image of the company. It is widely acknowledged that an empowered human resource is vital in the success of a company hence, I would seek to empower the activities of the employees.Moreover, as part of the management team, I would ensure that transparency is enhanced in corporate governance. The duties and responsibilities of every stakeholder would be defined in an amicable way, in order to avo id the confusion that emerges. This would play a overabundant role in enhancing the profitability of the company, as well as improving the image of the company in a large scale. Indeed, it is critical for any business enterprise to adopt a viable tool of enhancing its corporate governance (Baker, 2008 p. 78).In my opinion, I believe what happened was as a result of managerial incompetency by the management team. Lack of inconsistencies in financial breakthrough by the company led to the meltdown in the companys assets and costs control. In this respect, I believe that accounting laws and regulators can athletic supporter in avoiding this scenario again. The accounting laws will play a dominant role in keeping track of a companys financial assets and prevent it from incurring unnecessary loses. In addition, it is critical to highlight that such law and regulators will help immensely, in holding the management accountable.The management team of a company will be able to maintain h igh profile accountability in maintaining the value of the company. The market share of a company is able to attain reputable standards because of using the accounting laws. Additionally, accounting laws and regulators act as instrumental platforms in identifying challenges in a company, and making the necessary decisions in overcoming the challenges. The management team of a company is able to use business intelligence in developing a way forward in solving the challenges that a company faces in respect to financial management.In order to avoid the detrimental effects of financial mismanagement, companies can adopt viable ways of managing their operations. hydrofoil is a critical way of enhancing the gains of a company because its operations are open to scrutiny. In addition, it is main(prenominal) for companies to employ competent personnel to handle its operations, ranging from cost control to managing its experiences. It is pertinent for companies to develop policy frameworks that appliance feasible financial obligations.