Enron

Mission. Vision. Values.

Enron stands on the foundation of its Vision and Values. Every employee is educated about the company's Vision and Values and is expected to conduct business with other employees, partners, contractors, suppliers, vendors and customers keeping in mind respect, integrity, communication and excellence. Everything we do evolves from Enron's Vision and Values statements. MISSION "We treat others as we would like to be treated ourselves....We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance don't belong here." VISION Enron's vision is to become the world's leading energy companycreating innovative and efficient energy solutions for growing economies and a better environment worldwide.

Enrons ethics code was based on respect, integrity, communication, and excellence. These values were described as follows: Respect. We treat others as we would like to be treated ourselves. We do not tolerate abusive or disrespectful treatment. Ruthlessness, callousness and arrogance dont belong here. Integrity. We work with customers and prospects openly, honestly and sincerely. When we say we will do something, we will do it; when we say we cannot or will not do something, then we wont do it. Communication. We have an obligation to communicate. Here we take the time to talk with one another . . . and to listen. We believe that information is meant to move and that information moves people. Excellence. We are satisfied with nothing less than the very best in everything we do. We will continue to raise the bar for everyone. The great fun here will be for all of us to discover just how good we can really be.

Culture of arrogance that led people to believe that they could handle increasingly greater risk without encountering any danger. Enrons corporate culture did little to promote the values of respect and integrity. These values were undermined through the companys emphasis on decentralization, its employee performance appraisals, and its compensation program. Each Enron division and business unit was kept separate from the others, and as a result very few people in the organization had a big picture perspective of the companys operations. Accompanying this emphasis on decentralization were insufficient operational and financial controls as well as a distracted, hands-off chairman, a compliant board of directors, and an impotent staff of accountants, auditors, and lawyers. Performance evaluation process for all Enron employees. Known as rank and yank, (are si Gladwell in articol despre asta) Enrons compensation plan seemed oriented toward enriching executives rather than generating profits for shareholders

Core/specific goal
CORE GOAL: To prevent Enron from bankruptcy by proposing a strategy that can accomplishes Enrons objectives through ethical practices

Strengths

Weaknesses
Culture of arrogance Lack of transparency Short term focus Unethical top management Market to market approach Partnerships Merit over hierarchy Accepting failure as price of innovation Sink-or-swim Lack of control in entrepreneurship Formal communication- knowledge sharing Compensation structure Threats Regulation Competition Terrorist threats

Market position Trust from the investors Human capital Innovative company Entrepreneurship Flexibility to market conditions Competitive environment

Opportunities Supply of high quality energy Renewable energy Business merger and acquisition Market development in Asia

Porter Five forces model

Threat of new entrants LOW

Barriers to entry
Economies of scale Product differentiation Capital requirements Switching cost to buyers Access to distribution channels Other cost advantages Government policies YES NO HIGH LOW? LOW NO HIGH?

Incumbants defense of market share Industry growth rate

HIGH HIGH?

Determinants of Supplier Power

Supplier concentration Availability of substitutes inputs Importance of suppliers input to buyer HIGH Suppliers product differentiation Importance of industry to suppliers HIGH Buyers switching cost to other input HIGH Suppliers threat of forward integration LOW Buyers threat of backward integration LOW

Determinants of Buyer Power LOW

Number of buyers related to selers Product differentiation Switching costs to use others product Buyers profit margin Buyers use of multiple sources Buyers threat of backward integration Sellers threat of forward integration Importance of products to the buyer Buyers volume HIGH LOW HIGH ? LOW LOW LOW HIGH HIGH

Threats of substitute products

Relative price of substitute Relative quality of substitute Switching costs to buyers HIGH LOW HIGH

Rivalry among existing firms

Number of competitors (concentration) Relative size of competitors(balance) Industry growth rate Fixed costs vs. variable costs Product differentiation Capacity augmented in large increments Buyers switching costs Diversity of competitors Exit barriers Strategic stakes

Strategy