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Enron Corp

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Enron Corporation
1. Why did the company collapse?
Enron
In order to understand what happened within the company we need to start with its origins. Enron Corporation Inc. (later became Enron) begun operating in Huston Texas in 1985. It started from a merger of two natural gas companies, becoming the largest commercial, natural gas pipeline operating in the United States at that time. Throughout Enron’s humble beginnings it generally centred in the delivery of gas to utilities or businesses at market price. When the deregulation of the business markets emerged Enron’s role changed, they begun to act as energy brokers. Enron entered into contracts with the sellers (natural gas wholesaler) and signed the contract with the buyers (gas utility distributors).
Enron then transitioned from an old-line energy company with pipelines and power plants, to a high tech global enterprise that traded energy contracts like commodities, launched into new industries like broadband communications, and oversaw a multi-billion-dollar international investment portfolio. Enron’s key corporate achievements during the 1990s was creation of an online energy trading business that bought and sold contracts to deliver energy products like natural gas, oil or electricity. It operated in over 40 countries and areas such as Europe, South America, Australia basing its main operations in the United States. Enron was only competing with a few major players in the recently deregulated industry and begun to design increasingly complex contracts. Even more disturbing was these over the counter market dealings were not regulated by any government body or entity.
Enron’s main business plan was to out-compete traditional vertically integrated forms of organisation through sophisticated forms of risk management. It achieved this through various high risks accounting strategies and creating an aggressive

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