Assignment Task:

Organizational Theory

The student is required to do research on the below mentioned organization and answer the questions using 2500 and 3000 words. 

The case 

Enron Corporation was an American energy company headquartered in Houston, Texas. It was founded in 1985 following the merger of two small regional energy companies, Houston Natural Gas and InterNorth. Over the years, Enron expanded its business plan to increase profitability. Now acting more like a hedge fund, Enron dealt in commodities and services including natural gas, electricity, paper, freight, water, and communication technology. Enron was praised for its innovative business model; the company was named "America's Most Innovative Company" by Fortune magazine every year between 1996 and 2001. Enron's stock price reached a high of US$90.75 per share in mid-2000. After it was revealed that the company had been engaging in accounting fraud - had, in fact, been hiding billions of dollars in debt via various accounting loopholes - the company's shareholders filed a $40 billion lawsuit. Enron's stock price plunged to less than $1 per share by the end of November 2001. On December 2, 2001, Enron filed for bankruptcy. At the time, Enron's meteoric fall marked the largest corporate bankruptcy in US history. 

Enron engaged in mark to market (MTM) accounting, for which the company received official US    Securities and Exchange Commission (SEC) approval in 1992. This accounting method allows companies to value their financial situation based on the "fair value" of the company's assets, which may change as market conditions change. Enron used this accounting method to overinflate the company's estimated profits and mislead investors. To hide its mounting debt, Enron used special purpose vehicles (SPVs: shell companies capitalized entirely by Enron stock) to borrow money on Enron's behalf. By 2001, Enron had used hundreds of SPVs to hide its debt. 

By the end of 2001, investor confidence in Enron had started to decline. Jeffrey Skilling took over the role of CEO after Kenneth Lay retired in February. Skilling resigned for "personal reasons" in August. Analysts began to downgrade Enron's stock rating. On October 16, Enron reported the company's first quarterly loss. Shortly thereafter, the SEC announced it was opening an investigation into Enron and its SPVs. Enron restated the company's earnings (or lack thereof) and revealed that the company had $628 million in debt and $591 million in losses. After Dynegy, a company that had previously stated plans to merge with Enron, backed out of the deal, Enron filed for bankruptcy.
 

After doing your research on the organization, answer the following questions properly:

1. Explain how the Porter and Miles & Snow’s strategy of typology is adopted in the Enron’s organization before its bankruptcy.

2. Discuss the expansion strategy of the organization to increase profits.

3. Describe Enron’s techniques for controlling the environmental domain and evaluate whether Enron eventually effectively acted like it was a closed system.

4. Describe Enron’s decline using the Model of decline stages.

5. Explain how the vertical sources of power were misused in Enron.

6. Discuss how the corporate social responsibility was shaken by the top management

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