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In this paper, the writer will evaluate the planning function of management within Arthur Andersen. Specifically, the paper will discuss at least one legal, ethical, and social responsibility issue that impacts Arthur Andersen. Additionally, this paper will analyze the impact these factors have on Arthur Andersen’s management planning. Finally, this paper will analyze at least three factors that influence Arthur Andersen’s strategic, tactical, operational, and contingency planning.
The firm of Arthur Andersen LLP was founded in 1913 by Arthur Andersen and Clarence DeLany and named Andersen, DeLany & Co. The firm later changed its name to Arthur Andersen & Co. in 1918. Arthur Andersen LLP, based in Chicago, Illinois, was one of the “Big Five” accounting firms who perform auditing, tax, and consulting services for large corporations, such as Enron. In 2002, pending the outcome of the Department of Justice prosecution for obstruction of justice, the firm agreed and voluntarily surrendered its licenses and rights to practice auditing and other financial services in the United States. These charges stemmed from the firms handling of the auditing of Enron, an energy corporation, which resulted in the loss of over 85,000 jobs, devaluation of Enron’s stock from over $90 per share to pennies, and the bankruptcy of Enron. When Arthur Andersen was indicted, the firm lost almost all of its clients and faced over 100 civil suits related to its audits of Enron and other companies, such as Sunbeam and WorldCom. Additionally, Arthur Andersen’s reputation was so badly tarnished that no company wanted its name on their audit. In a 2005 Supreme Court ruling, the conviction against Arthur Andersen was unanimously reversed for serious ...
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...ess. Enron and Arthur Anderson are prime examples of poor planning due to total disregard for the legal, ethical, and social issues that its executives are expected to follow.
In conclusion, this paper evaluated the planning function of management within Arthur Andersen. Specifically, the paper discussed one legal, ethical, and social responsibility issue that impacted Arthur Andersen. Additionally, the paper analyzed the impact these factors have on Arthur Andersen’s management planning. Finally, the paper analyzed three factors that influenced Arthur Andersen’s strategic, tactical, operational, and contingency planning.
References
Arthur Andersen (2008). Retrieved March 3, 2008, from http://en.wikipedia.org/wiki/ Arthur Andersen
Robbins, S.P. (2005). Organizational Behavior (11th Ed). Upper Saddle River,
New Jersey: Pearson Prentice-Hall.
On the surface, the motives behind decisions and events leading to Enron’s downfall appear simple enough: individual and collective greed born in an atmosphere of market euphoria and corporate arrogance. Hardly anyone—the company, its employees, analysts or individual investors—wanted to believe the company was too good to be true. So, for a while, hardly anyone did. Many kept on buying the stock, the corporate mantra and the dream. In the meantime, the company made many high-risk deals, some of which were outside the company’s typical asset risk control process. Many went sour in the early months of 2001 as Enron’s stock price and debt rating imploded because of loss of investor and creditor trust. Methods the company used to disclose its complicated financial dealings were all wrong and downright deceptive. The company’s lack of accuracy in reporting its financial affairs, followed by financial restatements disclosing billions of dollars of omitted liabilities and losses, contributed to its downfall. The whole affair happened under the watchful eye of Arthur Andersen LLP, which kept a whole floor of auditors assigned at Enron year-round.
The CFO, Andrew Fastow, systematically falsified there earnings by moving company losses off book and only reporting earnings, which led to Enron’s bankruptcy. Any safeguards or mechanisms that were in place to catch unethical behavior were thrown out the window when the corporate culture became a situation where every person was looking out for their own best interests. There were a select few employees that tried to get in front of the unethical accounting practices, but they were pushed aside and silenced. The corporate culture at Enron became a place where if an employee would not make unethical decisions then they would be terminated and the next person that would make those unethical decisions would replace them. Enron executives had no conscience or they would have cared for the people they ended up hurting. At one time, Enron probably was a growing company that had potential to make a difference, but because their lack of social responsibility and their excessive greed the company became known for the negative affects it had on society rather than the potential positive ones it could have had. Enron’s coercive power created fear amongst the employees, which created a corporate culture that drove everyone to make unethical decisions and eventually led to the downfall and bankruptcy of
Enron was formed following a merger between two natural gas companies in 1985, Houston Natural Gas and InterNorth.3 When Enron formed, it had accumulated a large sum of debt, roughly 2 billion dollars.4 As a result of deregulation, Enron no longer had the exclusive rights to its pipelines, resulting in the company hemorrhaging money. Kenneth Lay5, the chief executive officer (CEO) of Houston Natural Gas, became Enron’s CEO. Lay knew he had to quickly come up with a new innovation to keep the company afloat. Lay hired McKinsey & Company6 to help in coming up with a business strategy for Enron. McKinsey & Company assigned Jeffrey Skilling7 to Enron’s company as a consultant. Skilling, who had a background in banking, asset and liability management, came up with a solution to Enron’s financial crisis in the gas pipeline business. He said to create a “gas bank”, in which Enron would buy gas from a network of suppliers and sell it to a network of consumers, allowing them to control the supply and price of the gas. Enron’s debt was no more, and Lay was so impressed with Skilling, that he created a new d...
Investors and the media once considered Enron to be the company of the future. The company had detailed code of ethics and powerful front men like Kenneth Lay, who is the son of a Baptist minister and whose own son was studying to enter the ministry (Flynt 1). Unfortunately the Enron board waived the company’s own ethic code requirements to allow the company’s Chief Financial Officer to serve as a general partner for the partnership that Enron was using as a conduit for much of its business. They also allowed discrepancies of millions of dollars. It was not until whistleblower Sherron S. Watkins stepped forward that the deceit began to unravel. Enron finally declared bankruptcy on December 2, 2001, leaving employees with out jobs or money.
Take into consideration the auditors from Arthur Andersen. They did not take into consideration the greatest good for the greatest number of people. The auditors from Arthur Andersen took into consideration the consequences only for their own firm and their own well-being. Vinson & Elkins lawyers should not have destroyed evidence in order to protect their client Enron. Lawyers do take an oath to help protect and defend their client but they are not to help find ways for their client to violate the
The Enron scandal was a financial scandal involving Enron Corporation and its accounting firm Arthur Andersen, that was revealed in late 2001. Many of Enron's recorded assets and profits were inflated, or even fraudulent and nonexistent. Debts and losses were put into entities formed "offshore" that were not included in the firm's financial statements, and other sophisticated and hidden financial transactions between Enron and related companies were used to take unprofitable entities off the company's books. This practice drove up their stock price to new levels, at which point the executives began to work on insider information and trade millions of dollars worth of Enron stocks. The executives and insiders at Enron knew about the offshore accounts that were hiding losses for the company; however, the investors knew nothing of this. As the scandal was revealed, Enron shares dropped from over $90 to les...
The trial was highly contended and several unfair practices were used by the government and the court during the trial. The judge, Melinda Harmon, was known for her rulings in favor of the U.S. government, and she issued very slanted jury instructions to the jury. She told the jury that “Arthur Andersen was liable for the acts of Duncan even if his acts were contrary to the partnership’s instructions” (Arthur 2002). The jury deliberated the ruling for seven days while being issues further biased jury instructions during that period. The jury found Arthur Andersen guilty on June 15, 2002. Arthur Andersen LLP. had their CPA licenses suspended, was banned from doing audits on public companies, was fined $500,000, and was put on five years of probation (Arthur 2002). Enron decided to appeal the case, but the ruling was upheld in the appellate court. Two years later, The Supreme Court unanimously reversed the decision because the judge had given the jury incorrect instructions. While the trial and initial conviction had drastic impact on the company as a whole, the ruling also caused 85,000 employees to lose their jobs worldwide and has a drastic affect on Enron’s
Management practices are highly followed in today’s workplace and for good reason since evidence suggests successful companies follow these strict practices. Regulating employees through a program that is setup to promote success is what the five management practices are about. Discussed will be the management practices of planning, organizing, staffing, leading, and controlling and how they relate to the corporate environment of Comcast Corporation through my personal experience.
Prior to 2000, Enron was an American energy, commodities and service international company. Enron claimed that revenue is more than 102 millions (Healy & Palepu 2003, p.6). Fortune named Enron “American most innovative company” for six consecutive years (Ehrenberg 2011, paragraph 3). That is the reason why Enron became an admired company before 2000. Unfortunately, most of the net income for the years 1997-2000 is overstated because of unethical accounting errors (Benston & Hartgraves 2002, p. 105). In the next paragraph, three main accounting issues will identify for what led to the fall of Enron.
The events industry in the UK is one of the most flourishing and lucrative industries in the country. In 2014, the UK events economy had an estimated worth of £39.1bn and employed the equivalent of 430,000 full time jobs. Beyond the statistics, it is important to establish creative and effective management strategies across the event production, planning and operational board, without these, the aforementioned statistics would not be possible to achieve. The essay will identify the absolute necessity of strategic planning and management, health and safety, risk, and financial management, through to the planning and operational processes crucial to the survival of the industry. ‘Typical areas for planning include decisions around a staffing
This essay explores the work of a modern manager and further analyses it to understand its relevance with Fayol’s managerial functions. The significance of the economic and technological conditions in the organisation’s general environment upon his work is also subsequently discussed. On top of that, a comprehensive evaluation and comparison between various school of thoughts on the discussed topics will also be presented, fully supported with evidence.A manager is defined as someone who coordinates and overlooks the work of other people so that organisational goals can be accomplished (Robbins, Bergman, Stagg, and Coulter ,2012). Due to the consistently evolving nature of the economy, a clear guideline for a manager’s work ceases to exist. Each manager performs different tasks according to their work. Nevertheless, modern management practice generally revolves around the paradigm of Henry Fayol’s key managerial functions of planning, organizing, leading and controlling despite experiencing various trajectories throughout the years. This notion is supported by Carroll and Gillen (1987), who affirmed that classical functions still represent the most useful way of conceptualizing the manager’s job.
In management, each of the four functions, planning, organizing, leading, and controlling, are crucial to the development of any business. Involving employees in the planning process help them understand the goals of the organization. Planning is analyzing a situation, determining the goals that will be pursued, and deciding in advance the actions needed to pursue the goals. This paper will evaluate the planning function of the Halliburton Company and analyze the impact that legal issues, ethics, and corporate social responsibilities have on management planning along with examples of each, and analyze three factors that influence strategic, tactical, operational, and contingency planning.
Kaufman, Roger and Stone, Bruce. Planning for Organizational Success: A Practical Guide. John Wiley & Sons, Inc.: New York, 1983.
Wren. (2005). The History of Management Thought (5th ed.). Danvers, MA: Wiley & Sons. (Original work published 1976)
Nowadays, management has become an important part of the society. The role of management is to assist the organisation to make the best use of its resource to achieve its goal. Base on the aim of management, one of the theorists Henri Fayol proposed the four necessary management functions: planning, organisation, leading, controlling are the tools managers use to achieve these goals. (Jones 2006) This essay is going to describe and discuss these functions.