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Enron Case: Question answer. 1. What lead to the eventual collapse of Enron under Lay and Skilling?

All the fraud activities conducted by Lay and Skilling and bad corporate culture led to the Eventual collapse of Enron. Both were aware of the Enron Code of Ethics but they did not follow it. Kenneth Lay former CEO was indicted on 11 criminal counts of fraud and making misleading statements. Jeff Skilling was indicted on 35 counts of wire fraud, securities fraud, conspiracy, making false statement on financial reports, and insider trading. Hence both were responsible for collapse of Enron. 2. How did the top leadership at Enron undermine the foundational values of the Enron Code of Ethics? Enron numerous executives such as former CEO, former chief financial officer and treasurer who forced company to the bankruptcy were found guilty after the bankruptcy. They were engaged in money laundering, fraud and conspiracy. In this manner Enrons leadership undermine the companys expressed Enron Code of Ethics i.e. respect, integrity, communication and excellence. 3. Respect: given Kenneth Lays and Jeff skillings operating beliefs and the Enron Code of Ethics, what expectations regarding ethical decisions and actions should Enrons employees reasonably had? The Enrons employees must had thought that senior management executive and top level management are not concerned about the business ethics since they themselves were doing unethical things such as frauds, money laundering etc. The employees then automatically get the sense of freedom for doing unethical activities. Therefore there must be no value for Enron Code of Ethics in the eyes of the Enrons employees. 4. How did Enrons corporate culture promote unethical decisions and actions?

The employees believed that they could deal with extra risk without any danger until they dont get caught. Even if they got caught then also they could ask for second chance. The corporate culture took very less efforts to promote the code of ethics. Instead the company gave more emphasis on decentralization and there were inadequate operational and financial controls. They inflate the contracts and hided the losses. 5. How did the investment banking community contribute to the ethical collapse of Enron?

Enron was engaged with highly reputed firms such as Citigroup, J. P. Morgan and Merrill Lynch and used prepays. Prepays were basically loans that Enron booked as operating cash flow. Enron secured new prepays to pay off existing one and to support rapidly expanding investments in new business. 6. Could another Enron occur now? Why or why now? Explain.

These days, all the company tried to hide their debts and show high profits in other to sustain and to avoid them from the bankruptcy. Therefore, another Enron could occur. Talking about bad corporate culture and fraud that Enron chief Executive officer had conducted, another Enron could not occur.

Question No. 1: Is Microsoft guilty of being a monopoly? Explain.Answer: No, Microsoft is not guilty of being a monopoly. The reason isthat Microsoft is enjoying the monopoly in the market. Although the DOJand judge Jackson has declared that that Microsoft has exerted monopolypower in the market. Now the market share of Microsoft is 95%. Microsofthas effectively argued that they are just been successful and competitive. Question No. 2: What are the major issues in this case? How havethese issues evolved?Answer: The major issues are as fallows. 1.Monopoly 2.High barriers to entry 3.Lack of alternatives 4.Threat to partners 5.Monopoly through pricing 6.Monopoly through technology 1.Monopoly Microsoft has dominancy in the market and DOJ has also declaredthat Microsoft has monopoly. 2.High barriers to entry Microsoft has over 70000 software applications. So it is difficult foranother company to enter in the market. 3.Lack of alternatives Software developers produce software that is compatible only inwindows and windows has largest market share. 4.Threat to partners Several companies transacted business with Microsoft and Microsoftpractices intimidated and threaten because companies claim that Microsoft force them to close their software development that arecompeting Microsoft applications. 5.Monopoly through pricing Microsoft has set prices that are very low in the market. This is alsoa reason of monopoly. 6.Monopoly through technology

By using the latest technology and software, Microsoft also exertsmonopoly in this way Question No. 4: Do you agree or disagree with the legal and courtdecisions made to date in this case? Explain.Answer:yes, we agreed with the court decisions that are made in thiscase. We believe that Microsoft has exerted monopoly and this act isunethical. Every company should be given equal rights to enter in themarket. DOJ has also declared that Microsoft has monopoly in the market. Question No. 5: How have the environment changed in this case?Explain.Answer: From the beginning Microsoft has violated the court orders bygiving IE built in Windows and due to this act Microsoft, DOJ fined $1million to Microsoft. Now, as the case goes on in the court, theenvironment of the case changes time by time. At last DOJ asked tofederal judge to break the Microsoft into two companies but the circuitcourt reverses the breakup orders. DOJ declare that Microsoft has illegallydefended the Windows. In the end, a settlement is reached that freedom isgiven to PC makers to install non-Microsoft software and to removeMicrosoft applications.

Question No. 8: What are the lessons from this case and since thiscase?Answer: Companies should not perform illegal activities in the business.Companies must fallow the laws and rules in the course of business. Donot create monopoly illegally. Do not break the court orders. Businessmust be performed in an ethical and legal way