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Was the 'New Economy' responsible for the Enron Scandal?

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  1. Introduction
  2. The process of market research on the Internet
    1. Recall the general approach of market research
    2. Choosing the format of the study
  3. The data collection
    1. The choice of a method of data collection
    2. Choosing the format of the questionnaire
    3. The risk of bias
  4. Conclusion

Warren Buffet, the second richest man in the world, and an investor, once told companies, "Be honest, this will yield big dividends". This idea made sense after the Enron Scandal was exposed on 2 December, 2001. Enron was an American energy company that had about 22,000 employees on its payroll. It had been one of the world's leading energy companies, with revenue of $101 billion in 2000. Enron had been named 'America's most innovative Company' six times, by the American magazine Fortune.

The end of 2001 exposed the company for what it really was. It was revealed that the financial condition that was projected by the company was a systematic and planned fraud, which came to be later known as the Enron Scandal. Enron filed for bankruptcy protection and this turned out to be one of the most complex bankruptcy cases the US had ever seen.

This company that had been hailed as the leader of the 'new economy' had, in fact, based its success on fake financial statements and frauds. The 'new economy' actually refers to the technological and economic developments, which result from the emergence of new information technologies and communication. Developments happen when companies reorganize themselves and their production processes around these technologies.

With this in mind, can we say that Enron was an offshoot from this 'new economy'? Was the urge to be the 'new economy' responsible for the Enron Scandal? To answer this, we will have to look at the history and nature of Enron. Then, we will have to determine the role of the 'new economy' in the Enron case. Finally, we will have to see how the dysfunction that led to the Enron scandal was unique in nature.

Tags: Enron Scandal, New Economy, Enron's bankruptcy case

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