IT Governance: Analysis of Enron Corporation's Failures

This report examines the IT governance failures of the Enron Corporation, a case study highlighting the importance of ethical decision-making and effective IS strategies. The analysis delves into the company's mismanagement, including false accounting practices and the concealment of debts, which ultimately led to its bankruptcy. The report emphasizes the need for revisions to the IS governance framework, proposing recommendations such as aligning IS strategy with organizational objectives, ensuring informed policies, and incorporating ethical considerations. The ISO/IEC 38500 standard for Corporate Governance of Information Technology is recommended to support ethical, regulatory, and legal IT usage. The report also stresses the importance of IT architecture and staying abreast of business trends, like cloud computing and analytics, to gain a competitive advantage. The analysis concludes with the need for accountability and risk management in IT governance.

Running head: IT GOVERNANCE
IT GOVERNANCE
Name of the Student
Name of the University
Author Note

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Table of Contents
Question 1........................................................................................................................................3
Question 2........................................................................................................................................4
References........................................................................................................................................8

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Question 1
The Enron Corporation is an America based company. It is a commodity, service and
energy provider in Texas. The business was found as the merger between the InterNorth and
Houston Natural Gas. Previously, the two organizations were a relatively small regional
business. Prior to its bankruptcy, it employed about 29,000 employees. It was an important
company provisioning pulp and paper, communications, natural gas and electricity. It has
claimed to generate revenues of about 100 billion dollars in 2000. However, its management was
not reporting their failed projects, debts and liabilities correctly. Through false accounting and
legal loopholes, the earnings and performances were shown improperly. This was done for a
prolonged period of time. Further, their debts were hidden and the losses were documented as
resources. Moreover, the legal aftermath of the scandal gave rise to a broad-range of outcomes.
This is how the owners and board could conduct the oversight of business and management.
Thus they could change the management corporates. For this reinvigorating the business area or
the “governance” has needed to be changed. Hence, different recommendations to deploy the
implementation of revisions to their Information system governance are needed to be reviewed.
The sector of the IS strategies can be stated as one of the factor which drives the success
factor of the project. In this context it can be considered that there can be various forms of
recommendations (Lunardi et al.2016). Some of the recommendation which can be stated in the
context of the proposed revision of the IS governance are explained below:
Recommendation 1: The strategy which is related to the IS governance should be linked
to the objective of the organization. As seen in the proposed IS governance it can be stated that
the main objective here is gaining of the competitive advantage in the sector of working. The

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proposed framework directly allows the organization to frame-up their working according to the
standard.
Recommendation 2: The policies which are framed up according to the compliance of the
IS strategy should be well informed so that there is no problem seen in the domain of the
executing and abiding by the policies. The policies should be well informed and maintained. The
policies should be directly aligned to the sector of the ethical business scenario so that there is no
problem perceived in the domain of the functioning of the organization.
Recommendation 3: The plan which can be stated in the domain of the plan can be
considered to be linked to the construction of IT governance sector so that the employee and the
organization can directly benefit from the sector (Nugroho 2014). In the level of planning it can
be stated that there is various sector of application of plan should be incorporated so that there
are no issue and risk associated with the working of the different task of the organization.
Recommendation 4: The projects in the context of the working should be aligned to the
sector of working. This must be done in such as way that each of the task is related to the project
can be done in a proper manner. This can be done without any issue being faced in the sector of
execution. The project should be directly aligned with the IT governance policies. It is to be done
in such a manner that there is no issue seen in the sector of the internal working.
Recommendation 5: The sector of priority which is linked to the domain of the execution
of the different working and the activity of the organization should be incorporated. The list of
priority can be considered to be very much vital in the area of working. It can be stated that in
the context of the working, the prioritization can be essential in completing of vital activity.

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Question 2
In the domain of the IS governance it can be stated that the sector of the ethical decision
making can be stated to be very much crucial in the domain of working. The revision which is
provided from the end of the classmates involves direct engagement of the ethical aspects. This
can be stated as one of the positive factor in the sector (Leignel, Ungaro and Staar 2016). Ethical
decision factor when involved in the sector of working always focus on the different factors. In
most of the cases it can be stated that it can help the domain of the execution of different
working. These are related to the context (Lunardi et al.2016). In the context of working it can be
stated that as ethics is engaged in the sector of working the gaining of competitive advantage can
be easily achieved. There is various domain of interactions which should be focused in the
domain so that proper functionality can be gained in the sector. The ethical decision making has
been balancing the upholding of profits of shareholders. This consists of the impacts of business
activities over outside stakeholders. The development of working conditions of employees, are
common considerations in making ethical decision (Mason 2017).
For the current project the ISO/IEC 38500 standard for “Corporate Governance of
Information Technology”, can be deployed. This is helpful to support the deployment of what
has been ethically, regulatory and legally needed for the IT usage at Enron Corporation. The
standard provides different guidance and high-level principles. This includes legality,
effectiveness and efficiency of the Enron Corporation’s use of IT at that service. This lies on the
basis of six core principle, implementing liabilities and planning strategy for supporting best of
Enron Corporation. This is done through assuring performance, conformity and respect for the
human behaviors. Moreover, it emphasizes on security. Besides, the responsibility and
accountability of every risks of IT and tasks are also clearly assigned. The IT/IS consists of

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various undermined accountabilities (Quezada-Sarmiento et al. 2017). Here, the computerized
systems are driving out the information. This is because of the convenience and speed of the new
systems and perception of objectivity of the data quality. Here, the information is seen as the
cross checking channels and face value and processes can be ignored. The values include the
regulatory compliances, market growth, cost avoidance, cost reduction and revenue growth. For
this, risks, key performance indicators and total portfolio profile of effects are to be maintained.
The computerized records has been malleable and intangible than the records that are record
based. Additionally, it can facilitate the development behaviors and strategies. This also
measures and mechanisms for the future and current use of IT. This is also business and legal
specific. It must also be kept in mind that it never meant to be the one-size-fit-all approach.
Further, it has been never replacing the COBIT and ITIL and so on. Further, the Calder Moir-
Framework must be utilized here. This is meta-model regarding governance of IT. It never
describes the model for the governance. However, it demonstrates the method by which Enron
Corporation, can develop their model. This helps is coordinating the applications in different
other systems that are related to systems like IT governance. This includes current ISO/IEC
38500. Regarding its strategy and IT architecture, the architecture requires support for the IT
strategy and various organizational aims along with the considering the present trend in IT.
The business trend directly reflects the area of concentration and how the overall
functioning of the organization. In this context it can be stated that the business trend can directly
include the gaining of the competitive advantage of the organization. For example, cloud
computing, mobile application, interfaces and analytics can be considered here. From this iot can
be concluded that the effects on business has been rising and helpful fort companies in serving
the customers in more effective manner (Mohamad and Toomey 2016). This, in most of the

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cases organizations who focus on the domain of trend. It can be stated that most of the trend can
be stated to be crucial. This mainly involves the urge to gain competitive advantage within the
sector of working of the organization (Thompson et al. 2014). Hence the IT strategy which is
focused in the context of the organization should be well manipulated with the level of objective
of the organization. In this sector it can be stated that there is various domain of implementation
which should be focused. In the sector of accountability, it can be considered that there is various
domain of interaction which can directly abide by the objective of the working of the
organization.

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References
Leignel, J.L., Ungaro, T. and Staar, A., 2016. Digital Transformation: Information System
Governance. John Wiley & Sons.
Lunardi, G.L., Maçada, A.C.G., Becker, J.L. and Van Grembergen, W., 2016. Antecedents of IT
governance effectiveness: An empirical examination in Brazilian firms. Journal of Information
Systems, 31(1), pp.41-57.
Mason, R.O., 2017. Four ethical issues of the information age. In Computer Ethics (pp. 41-48).
Routledge.
Mohamad, S. and Toomey, M., 2016. A survey of information technology governance capability
in five jurisdictions using the ISO 38500: 2008 framework. International Journal of Disclosure
and Governance, 13(1), pp.53-74.
Moodle.bl.rdi.co.uk. (2019). iLearn - Arden University: Log in to the site. [online] Available at:
https://moodle.bl.rdi.co.uk/login/index.php [Accessed 15 Mar. 2019].
Nugroho, H., 2014. CONCEPTUAL MODEL OF IT GOVERNANCE FOR HIGHER
EDUCATION BASED ON COBIT 5 FRAMEWORK. Journal of Theoretical & Applied
Information Technology, 60(2).
Quezada-Sarmiento, P.A., Chango-Cañaveral, P.M., Benavides-Cordova, V.M., Jumbo-Flores,
L.A., Barba-Guamán, L. and Calderon-Cordova, C.A., 2017, June. Referent framework to
government of IT using standards: COBIT 5 and ISO 38500. In 2017 12th Iberian Conference
on Information Systems and Technologies (CISTI) (pp. 1-6). IEEE.

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Thompson, S., Ekman, P., Selby, D. and Whitaker, J., 2014. A model to support IT infrastructure
planning and the allocation of IT governance authority. Decision Support Systems, 59, pp.108-
118.