| Executive summaryIts revenues made up US | | | | benefits to its product which includes additional |
| $139($184) billion, assets equaled $62($82) billion, and | | | | supporting services. Operations sector is the heart of |
| the number of employees reached more than 30,000 | | | | these changes that are made by leading companies |
| people in 20 countries around the world.While Enron | | | | to improve their performance and increase customer |
| Corporation was so highly praised by the outside | | | | base.The survival of commercial company depends |
| observers, internally it had highly decentralized | | | | on ability of the organization to focus and shape its |
| financial control and decision-making structure, which | | | | operational resources to meet the expectations of its |
| made it practically impossible to get coherent and | | | | stakeholders: customers, employees and |
| clear view on corporations' activities and operations. | | | | shareholders, expressed in organizational strategy |
| Of course, the problem was not exclusively due to | | | | (Russel, 1995) . Irrespective of economic sectors the |
| poor managerial performance, all the departments of | | | | company operates in, the ability of operations |
| the corporation were involved in the ruining corporate | | | | management of this company to fulfill those |
| ethical values and principles, but executives and | | | | above-mentioned tasks depends on their |
| managers bear primary responsibility for the absence | | | | understanding that it is necessary to make |
| of corporate culture, clear accountability and | | | | trade-offs. They cannot avoid the situation of |
| transparence of the company. If operations | | | | working under constraints and have to understand |
| management worked properly, in its full force, and if | | | | their capabilities and constraints to provide significant |
| it was given possibility to work in such a way, there | | | | inputs into strategic decision-making process involving |
| could be a chance of escaping the tragedy.Enron | | | | further resources of the organization.Operations |
| Corp brief historyEnron Corporation was one of the | | | | managers in the organizations are not empowered to |
| largest global energy, services and commodities | | | | make strategic decisions, but they play important role |
| company. Before it filed bankruptcy under chapter 11, | | | | in shaping the organization's strategy and contribute |
| it sold natural gas and electricity, delivered energy | | | | to the strategic thinking ( Pasternack, Viscio, 1998). |
| and other commodities such as bandwidth internet | | | | Operations managers should be able to translate |
| connection, and provided risk management and | | | | strategic aims and objectives into clear operational |
| financial services to the clients around the world.Enron | | | | objectives and actions and to implement, design and |
| was based in Houston, Texas, and was founded in | | | | improve the products of the company themselves |
| July 1985 (though company with Enron name | | | | and the processes of their delivery. They have to |
| emerged still in 1930 (Swatz, Watkins, 2003)) by the | | | | know how changes incorporated to external factors |
| merger of InterNorth of Omaha in Nebraska, and | | | | influence the operation and how changes in one |
| Houston Natural Gas. Enron Company quickly | | | | aspect of the operating system influence other |
| developed from merely delivering energy to brokering | | | | aspects.Also, operations managers need to know |
| energy futures contracts on deregulated energy | | | | how technological changes impact organization's |
| markets. In 1994, the company started to sell | | | | capability of delivery, and to incorporate their |
| electricity, and in 1995, it entered European energy | | | | conclusions into strategic process (Peters, Waterman, |
| market. By the middle 2001, Enron employed about | | | | 1982). Therefore, the heart of operations thinking |
| 30,000 people globally (McLEan, | | | | includes the ability to think dynamically and |
| Elkind,2003).Questionable accounting methods and | | | | systematically across time and space (Miller, 1998). |
| techniques provided Enron with possibility to be listed | | | | Besides traditional tasks of operation management, |
| as seventh largest United States company and was | | | | new perspectives and objectives emerge connected |
| expected to dominate the market which the | | | | with the emergence of new trends and |
| company virtually invented in the communications, | | | | developments of operations management, such as |
| weather and power securities (Bryce, 2002). But | | | | total quality management, shop floor control, global |
| instead the corporation became the largest corporate | | | | supply chain management, manufacturing planning |
| failure in the global history and an example of | | | | software, and others.Total quality management has |
| well-planned and institutionalized corporate fraud. | | | | become one of the most important developments of |
| Enron became wealthy due to its pioneering | | | | the operations management. The quest for higher |
| marketing and promotion of power and | | | | level of products and services quality is caused by |
| communications bandwidth services and risk | | | | the globalization of markets, on the one hand, and |
| management derivatives, including such innovative | | | | increasing litigation over service or product failure. |
| and exotic items as weather derivatives.In 1999, | | | | The relationship between quality and market share |
| Enron launched an initiative of buying and selling | | | | performance is doubtless. Those firms that fail to |
| access to high-speed Internet bandwidth, and also | | | | understand the issue of quality find themselves on |
| Enron Online was launched as a Web-based trading | | | | the bottom of their industry hierarchy. A significant |
| site, making Enron e-commerce company. In 2000, | | | | share of the responsibility for quality standards rests |
| the reported revenues of the company made $101 | | | | on the operations manager. Global supply chain |
| billion. It had stakes in almost 30,000 miles of gas | | | | management is another very important component |
| pipelines, either owned or accessed 15,000 miles of | | | | of operations management. The world economy is |
| fiber-optic network and had stakes in global | | | | becoming more global than ever. Looking for lower |
| operations on generating electricity (Thomas, 2002).In | | | | production costs, more flexibility and local risk |
| the result, for five years in a row, from 1996 to | | | | reduction, companies are seeking to outsource and |
| 2000, Enron was named "America's most innovative | | | | produce services and products on global scale (Heizer, |
| Company" by Fortune magazine, and headed the list | | | | 2004). Operation managers are responsible for fulfilling |
| of Fortune's "100 best companies to Work for in | | | | the task. Project management is yet another task of |
| America" in 2000. Enron reputation was undermined | | | | the operations management department. Operation |
| by rumors on bribery and political pressure with the | | | | managers bear responsibility for numerous projects |
| objective of securing contacts in South and Central | | | | which range from considerable capital projects to |
| America, Philippines and Africa. The Enron was blamed | | | | specific ones such as installation of new information |
| to use its connections with Clinton and Bush | | | | system.Effectively managing projects involves |
| administrations to express pressure in their contracts. | | | | fulfillment and delivery them in timely manner and |
| The events were followed by a series of scandals | | | | within the budget (Stevens, 2001). In a word, |
| involving irregular accounting methods bordering on | | | | operations management is indispensable component |
| fraud which involved Enron and Arthur Andersen | | | | of the organization, since it fulfills numerous important |
| accounting firm and led Enron on the verge of | | | | functions of the company. Operations manager |
| undergoing the largest bankruptcy in economic | | | | handles daily running and functioning of the |
| history in November 2001 (Emshwiller, Smith, | | | | organization.The implication of poor managerial |
| 2001).Since Enron was always considered a blue chip | | | | performance for the collapse of Enron |
| stock, the bankruptcy was a disastrous and | | | | CorporationNow it is necessary to find out and |
| unprecedented event in the global financial world. | | | | analyze whether operations management of Enron |
| Enron's downfall was definite when it was found out | | | | Corp performed all the functions mentioned above |
| that a considerable share of its profits resulted from | | | | and what was the quality of their activity.The Enron |
| deals with so-called special-purpose entities, limited | | | | did have operations management department, which, |
| partnership under control of Enron. It resulted in the | | | | according to their official source, fulfilled the following |
| possibility of not reporting many of the company's | | | | functions: setup accounts and notify utilities, agency |
| losses in its financial statements. The final plan of | | | | agreement from customer, verify the format of |
| Enron's bankruptcy included creation of three new | | | | invoice, setup invoice data transfer, test algorithms |
| businesses which would be spun off the | | | | of invoice and file transfer to the customer, |
| company.The reorganization process started in 2003 | | | | determine the reporting requirements of the |
| with the creation of three companies - CrossCountry | | | | customer (Enron Energy Services, 2000). As it is seen |
| Energy, Prisma Energy International, and Portland | | | | from the source, the functions of very operations |
| General Electric. CrossCountry Energy was sold to | | | | management department are very limited. There are |
| CCE Holdings L.L.C., with the money to be used for | | | | other management departments which perform the |
| the repayment of the debts, while Prisma Energy | | | | functions of operations management stated above: |
| International and Portland General Electric should | | | | operations facility management, commodity |
| emerge as independent companies descendant of | | | | management, energy asset management, financial |
| Enron (Swatz, 2003).Operations management scope | | | | operations, and capital management. Though, most of |
| of functionsTo understand the reasons of this | | | | functions performed by these departments, |
| bankruptcy and the level of managerial implication in | | | | according to the source, are purely executive and |
| the quality performance of the company, particularly | | | | lack integration, systematic vision, responsibility, |
| that of operations management, it is necessary to | | | | control and creative aspect. Besides limited scope of |
| outline the main functions of operations management | | | | functions assigned to operations management in |
| and impact it should have of functioning of the | | | | Enron Corporation, another important point concerns |
| organization.The principal task of operations | | | | the quality of their performance and overall corporate |
| management is effective transformation of inputs | | | | culture and atmosphere created within corporation. |
| into "desired outputs" of the company (Shafer, 1997). | | | | As it was mentioned above, ideally, the functions of |
| The outputs are traditionally understood in | | | | operations management include creating ethic values, |
| manufacturing and profit-making context within the | | | | integrity, competence and clear accountability within |
| organizations. But recently it has been recognized | | | | the organization. Enron's management failed to |
| that operations management is a discipline which is | | | | comply with these tasks.Read the full version of this |
| not limited with such narrow functions; it can be | | | | article here.Anastasia Kurdina is a person of manifold |
| deployed in practically any area where the | | | | gifts. Almost every her writing is followed by lavish |
| organization aims at achieving its objectives (Barnett, | | | | testimonials from satisfied customers. Anastasia |
| 1996). For instance, non-profit or public sectors have | | | | specializes in marketing, management, sociology, |
| to learn to optimize their internal operations and | | | | history, world cultures, literature and art.Anastasia |
| processes in the situation of limited resources; | | | | Kurdina is not an essay writer in a common sense. |
| service companies come to conclusion that by | | | | She is a Poet, an Analyst, an Artist, a Critic, ... . |
| reappraising their delivery process they can | | | | Anastasia is one out of a few writers who |
| revolutionize and significantly improve their approach | | | | remember "how it all started" :) . It is she who |
| to manufacturing companies and their marketplace. | | | | sometimes accomplished every second order when |
| Robin Wood (2001) gives the example of such | | | | Your Personal Writer was nothing more nor less than |
| operations management implication in Daewoo | | | | 3 writers and one webmaster; it is she who has still |
| company, which understood that it can specialize and | | | | been accomplishing special orders, which naturally go |
| differentiate its product by adding definite bundle of | | | | beyond regular write-me-an-essay orders. |