The fall of once “America’s Most Innovative Company” and formerly the 7th largest
corporation in United States have vastly impacted the economic system of the country’s history.
Due to the ignorance and recklessness of the top executives, the rising company reached its
Bankruptcy which resulted to thousands of unemployment and losses of the billions of retirement
funds. Furthermore, even the trust of the citizen on the capital markets, banks and other accounting
firms were also shaken.
Highlighting the company’s incompetence, here are the five institutions or group of
individuals who has been directly involved and affected in the collapse of Enron Corporation.
1.) Employees
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Enron has this rating system on which every year, they are pulling out 20% of its
employees who were evaluated below the standard level performance. Employees from
all areas of management were discouraged to ask questions related to Enron’s financial
issue and expressing their own stand can be equated to quick unemployment.
Additionally, even the top Executives encouraged their employees to invest in Enron
because of its continued growth in the market. With their utmost trust in the company,
they’ve invested their retirement funds with the hope of benefitting it in the end. However,
they became a victim of Enron’s Scandal when they became jobless and lost the
retirement fund that was amounted to $2,000,000,000 in 2001.
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Enron violated the Code of Ethics especially in their Integrity, Professional Behavior,
Honesty and Transparency. The company also put less importance to its employees’
welfare, needs and values. The employees should have the freedom to openly
communicate with others especially their seniors but Enron senior managers and
executives didn’t provide this healthy corporate culture in them.
2.) Shareholders/Investors

The shareholders of Enron were deceived by its executives and stated distorted values of
assets, liabilities and owner’s equity in their financial statements. Since the company’s
stock value was amounted to $90 per share, they thought that it will be on the rise for a
long time. When bankruptcy arise, a total of $74 billion were taken in the shareholders.
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Enron violated the right of their shareholders in terms of transparency, honesty and
loyalty.
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In relation to this topic, even Immanuel Kant’s Categorical Imperative theory states that
“you cannot use others in a way that gives you a one-side benefit” but Enron acted the
other way around, the shareholders were just being used by them to maximize their money
for their own good.
3.) Financial Institutions
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When Arthur Andersen was engaged in Enron’s scandal, the bad reputation of auditing
and accounting firms spread in the client market and affected other firms as well like
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KPMG, PwC, Deliott and Ernst & Young. They experienced a significant decrease or loss
in the market and the trust of the citizens to these firms also altered. Banks were also one
of the major affected sectors since they also loss hundred millions especially the major
banks in America like JP Morgan Chase and Citigroup.
The Securities and Exchange Commission and other public sectors started to strengthen
their investigations to other companies and this also resulted in establishing a new
regulation called The Sarbanes-Oxley Act of 2002.
4.) Energy Companies (Electricity and Natural Gas Industries)

Since Enron was known and trusted by the energy industry, most of the companies’
projects and plans were also connected to Enron. Several projects were put on hold due
to their contracts with the said company. For example, the Entergy Corp, a New Orleans
based company that provides electrical power in some parts of America, Australia and
Europe postponed their power plant. Future plans for electricity expansion were also put
on hold in different areas of America. Also one of the New York banker that specialized
in the areas and agendas of energy said that the Enron’s collapsed affected the energy
industry through the cost of capital.
5.) Politicians
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Some politicians that are affiliated with Enron were also negatively affected since many
people questioned their connections with Enron’s scandal. People also questioned the
failure of the government system to notice this huge mistake in one of the most trusted
company may it be in the public and private sector of the country. The donations from
Enron were also returned by politicians since the company was one of their greatest
contributor. Some politicians also said that the money donated by Enron will be given
to charities as well.
These group of people or institutions were just some of the proof of Enron’s incapability
to conduct or to provide a proper corporate ethical standard and values. Their greediness resulted
to the loss of a strong potential pillar in strengthening the energy industry and the whole economy
of their country.