Failsafe Strategies: Profit and Grow from Risks That Others Avoid

Appendix . Appendix: Enron's Incremental Descent into Bankruptcy: A Strategic and Organizational Analysis^[1]

Abstract

Enron's senior management has become the poster boy for all that is bad with corporate America, and justifiably so. Further, it is becoming apparent, even in the popular business press, that the limited partnerships were increasingly used to cover up Enron's strategic mistakes and keep its stock price high. Yet there is hardly any in-depth analysis of what contributed to the strategic mistakes. This Appendix is not about the cover-up but an analysis of the antecedents of these strategic mistakes.

I will demonstrate that the core successes of Enron—and these were unmitigated successes—were rooted in its ability to manage the risks ...