Corporate culture of America PDF

The event of the bankruptcy of the entity Enron highlighted the failings in the corporate
culture of America and shook the various legal and the ethical communities’ around the
globe. The scandal not only emphasized the role of the leaders of such multinational entitles,
but also forced the regulators of the stock market and the financial sector to devise
mechanisms for strict control over the entities. The work explores the various facets of the
Enron bankruptcy and the following distress in the business and the legal communities.
The corporate culture of the company was marked with a humble beginning in the year 1985
with the merger of the two companies based at the Houston. However, the year 1988 marked
a significant change for the company’s objectives with the de regulation of the electrical
power markets. The opportunity appeared lucrative from the point of view of revenues to the
leaders of the Enron. As a result, the company extended its activities and entered into a
number of complex contracts. While the lucrative revenues of the said market influenced the
leaders, the latter failed to acknowledge the increase in the responsibilities towards the
stakeholders of the entity1.
The corporate failure of the entity Enron forced the regulators to adopt news means to
regulate the players in the securities market. One of the major legislations that were
introduced post the Enron bankruptcy event was the Sarbanes Oxley reform. The legislation
was introduced with the aim to improvise the transparency in the accounting and business
operations of the public companies2. In addition, the corporate governance framework with
respect to the appointment, remuneration of the directors, the roles, and responsibilities of the
auditors and the overall ethical and accounting issues were enhanced.
In addition to the above, the reforms also took place in the rules of the New York Stock
Exchange and the NASDAQ, on the lines of the stringent provisions with respect to the
listing requirements3. The reforms took place even beyond the boundaries of the American
1 Thomas Li-Ping Tang and Marko Polič, Monetary Intelligence And Behavioral Economics(Kluwer
Academic Publishers cReidel 2016).
2 Saurabh Ahluwalia and others, 'Sarbanes–Oxley Section 406 Code Of Ethics For Senior Financial
Officers And Firm Behavior' (2016) 151 Journal of Business Ethics.
3 Brian R. Cheffins, 'Corporate Governance Since The Managerial Capitalism Era' (2015) 89 Business
History Review.

corporate culture, majorly in the UK. It is significant to note that the event also challenged
the popularly accepted notion of the self-regulated corporate governance, and thus provided a
stage for the corporate reforms in the UK. The European Union has responded in the form of
the mandatory directives and the recommendations to the companies and the leaders.
Thus, as per the discussions conducted in the previous parts it can be stated that the Enron
Scandal has been a milestone in the history of the corporate governance reforms. A number
of reforms have been employed with the main intention to restore the public and the investor
confidence. The United States responded on the lines of the improved financial reporting
practices.

Bibliography
Li-Ping Tang TM Polič, Monetary Intelligence And Behavioral Economics (Kluwer
Academic Publishers cReidel 2016)
Ahluwalia S and others, 'Sarbanes–Oxley Section 406 Code Of Ethics For Senior Financial
Officers And Firm Behavior' (2016) 151 Journal of Business Ethics
Cheffins B, 'Corporate Governance Since The Managerial Capitalism Era' (2015) 89 Business
History Review