How Corporate Governance Affects Strategy of Corporations: Lessons from Enron Corporation

Bankruptcy and subsequent collapse of Houston-based energy giant Enron in December 2001 on charges of hidden debt, inflated profits, questionable accounting and governance; marked the beginning of a new debate on the significance of corporate governance for organizational sustainability.

Corporate governance is a subject of academic and professional debate. It has and it will continue to be a topic under scrutiny for subsequent deliberations since there are many different research dimensions and contexts associated with it. However, it has been observed that the linkage between corporate governance and strategy of a corporation remains as an untapped area with considerable avenues of research. This paper tends to explore this linkage, using Enron scandal as backdrop. In the aftermath of the debacle of US energy giant Enron in 2001, the significance of corporate governance has come under heavy scrutiny of different researchers. Whereas different explanations have been attributed to its downfall, it has been widely accepted that this was a case of failed corporate governance. This paper tends to explore Enron downfall from the perspective of failed corporate governance

Contents

1 INTRODUCTION
1.1 Background
1.2 Problem Discussion
1.2.1 Examples of Renowned Corporate Frauds
1.3 Hypothesis
1.4 Purpose
1.5 Research Questions
1.6 Limitations
1.7 Academic Contribution of Study
1.8 Outline of the Thesis
1.9 Research Model
2 METHODOLOGY
2.1 Research Design
2.2 Kind of Research
2.4 Data Collection Techniques
2.4.1. Secondary Literature Review
2.4.2. Primary Data
2.5 Interviews
2.6 Questionnaires
2.7 Reliability and Validity
2.8 Problem and Amendment
3 FRAME OF REFERENCE
3.1 Corporate Governance
3.1.1. Definition of Corporate Governance
3.1.2. Key Principal of Corporate Governance
3.1.3. Guidelines of Corporate Governance
3.1.4. Environment & Key Actors of Corporate Governance
3.1.5. Impediments to Corporate Governance
3.2. Agency Theory
3.2.1 Agency Theory Overview
3.2.2 Origin of Agency Theory
3.2.3. Definitions of Agency Theory
3.2.4. Varieties of Agency Theories
3.2.5. Agency Theory as Problem Solving Theory
3.3 Ernst & Young Model for Effective Corporate Governance
3.3.1 Components of Ernst & Young Model
3.4 Correlation between Concept, Theory and Model used
3.5 Theoretical Conclusion and Model
4 CORPORATIONS,CORPORATE STRATEGY AND ENRON
4.1 Corporation
4.2 Corporate Strategy
4.3 How Corporate Governance affects Strategy of Corporations
4.4 About Enron Corporation
4.4.1 Enron Corporation at a Glance
4.4.2 Enron as a Highly Innovative Company
4.4.3 Collapse of Enron Corporation
4.4.4 Failure in light of Agency Theory
5 EMPIRICAL ANALYSIS
5.1 How the Strategy Making Process Works?
5.2 Shortcoming of Agency Theory
5.3 Why Ernst & Young Model has been used
5.4 Enron Corporate Governance & Strategy in light of Ernst & Young Model
5.4.1 External Environment
5.4.2 Internal Environment
5.4.3 Linkage between External and Internal Variables
5.5 Corporate Governance, Strategy and Pakistan
6 ANALYSIS
6.1 Enron downfall in light of Agency theory
6.2 Enron downfall in light of Ernst and young model of Corporate Governance
6.3 Key Lessons from Enron
6.4 Corporate governance as a source of sustainable competitive advantage
6.5 Corporate Governance & Pakistan’s Perspective
7 CONCLUSION
7. 1 Answers of Research Questions
7.1.1 What is Corporate Governance? How Corporate Governance has an impact on Corporate Strategy of Corporations?
7.1.2 How Enron scandal can be viewed from the perspective of failed corporate governance?
7.1.3 Based on the lessons of Enron debacle, how can corporations use corporate
governance for their sustainable competitive advantage and how does it affect their strategy as a whole?
7.1.4 What are the impediments of implementing corporate governance in Pakistani context?
7.2 Future study recommendations
8.1 Books and Articles
8.2 Web links
8.3 Interviews
9 APPENDIX
9.1 Questionnaire
9.2 Appendix

Author: Ahmed, Hameed,Najam, Ali

Source: Linköping University

Download URL 2: Visit Now

Leave a Comment