Enron filed for bankruptcy 2nd December 2001 leading to the massive plunge of its share prices from a high of more than USD90.00 to USD0.50. (http://en.wikipedia.org/wiki/Enron_scandal)
The main reason for Enron’s fall is no doubt the Arthur Andersen accounting firm (http://en.wikipedia.org/wiki/Arthur_Andersen)
The recent US financial meltdown is truly a déjà vu experience because history is repeating itself.
In the wake of the Enron scandal, we have the Bear Stearns fiasco (http://en.wikipedia.org/wiki/Bear_Stearns), Fannie Mae, Freddie Mac, Lehman Brothers and last but not least AIG. The massive losses posted by companies in the US financial market has directly prompted the Bush administration’s current proposal to spend USD700 billion capital injection to prop their financial market from crashing. At the same time, the FBI is investigating these firms for possible mortgage fraud (http://money.cnn.com/2008/09/23/news/companies/fbi_finance/index.htm?cnn=yes).
To the best of my knowledge, corporations / companies are inanimate entities. It is the employees that makes or breaks corporations / companies. This fact leads me to question myself: what is it that made the above giant corporations to suffer massive financial losses? Surely the answer cannot be luck (or lack of it) or they were at the wrong place at the wrong time for the wrong reasons. I believe the answer for the above scandals is simple: the corporations failed mainly because of wrong values.
Values is defined as (http://wordnet.princeton.edu/perl/webwn?s=values)
S: (n) values (beliefs of a person or social group in which they have an emotional investment (either for or against something)) "he has very conservatives values"
The basis for the massive financial market meltdown is US is largely blamed on the subprime mortgage crisis (http://en.wikipedia.org/wiki/Subprime_mortgage_crisis). In my opinion, that is not the real reason. The real reason behind the US financial market meltdown is the values of the employees in the corporations have ‘evolved’ drastically to the extent that they are no longer recognizable. Now why in the world would I say that?
Let me ask a simple question: who wouldn’t want lots of money? As corporations are inanimate entities, the financial health of corporations falls into the jurisdiction of the company’s board of directors. I think I would not be wrong to say that the word ‘directors’ was derived from ‘direct’ as in to provide directions. The biggest pre-requisite for directors should be the values that they subscribe to. If the directions provided by a director does not have good values embedded in it, chances are the outcome would be disastrous, as is evident in the financial meltdown in U.S.
Coming back to my earlier question: who wouldn’t want lots of money? Making lots of money isn’t difficult at all, that is if a person doesn’t subscribe to good values. Plenty of career options available for people who subscribe to dishonesty, selfishness and blatant disregard to rules / laws. But most end up behind bars. The truth about values is simple: good values will prevail over bad values. For a person who subscribe to honesty, selflessness and abides by rules / laws, it may be prove to take a longer time to accumulate lots of money but at the very least, the chances of them ending up behind bars are very low.
The corrective action = please educate and instil good values in children, relatives, friends, community, colleagues and everyone that you know in order to prevent any undesirable circumstances.
The main reason for Enron’s fall is no doubt the Arthur Andersen accounting firm (http://en.wikipedia.org/wiki/Arthur_Andersen)
The recent US financial meltdown is truly a déjà vu experience because history is repeating itself.
In the wake of the Enron scandal, we have the Bear Stearns fiasco (http://en.wikipedia.org/wiki/Bear_Stearns), Fannie Mae, Freddie Mac, Lehman Brothers and last but not least AIG. The massive losses posted by companies in the US financial market has directly prompted the Bush administration’s current proposal to spend USD700 billion capital injection to prop their financial market from crashing. At the same time, the FBI is investigating these firms for possible mortgage fraud (http://money.cnn.com/2008/09/23/news/companies/fbi_finance/index.htm?cnn=yes).
To the best of my knowledge, corporations / companies are inanimate entities. It is the employees that makes or breaks corporations / companies. This fact leads me to question myself: what is it that made the above giant corporations to suffer massive financial losses? Surely the answer cannot be luck (or lack of it) or they were at the wrong place at the wrong time for the wrong reasons. I believe the answer for the above scandals is simple: the corporations failed mainly because of wrong values.
Values is defined as (http://wordnet.princeton.edu/perl/webwn?s=values)
S: (n) values (beliefs of a person or social group in which they have an emotional investment (either for or against something)) "he has very conservatives values"
The basis for the massive financial market meltdown is US is largely blamed on the subprime mortgage crisis (http://en.wikipedia.org/wiki/Subprime_mortgage_crisis). In my opinion, that is not the real reason. The real reason behind the US financial market meltdown is the values of the employees in the corporations have ‘evolved’ drastically to the extent that they are no longer recognizable. Now why in the world would I say that?
Let me ask a simple question: who wouldn’t want lots of money? As corporations are inanimate entities, the financial health of corporations falls into the jurisdiction of the company’s board of directors. I think I would not be wrong to say that the word ‘directors’ was derived from ‘direct’ as in to provide directions. The biggest pre-requisite for directors should be the values that they subscribe to. If the directions provided by a director does not have good values embedded in it, chances are the outcome would be disastrous, as is evident in the financial meltdown in U.S.
Coming back to my earlier question: who wouldn’t want lots of money? Making lots of money isn’t difficult at all, that is if a person doesn’t subscribe to good values. Plenty of career options available for people who subscribe to dishonesty, selfishness and blatant disregard to rules / laws. But most end up behind bars. The truth about values is simple: good values will prevail over bad values. For a person who subscribe to honesty, selflessness and abides by rules / laws, it may be prove to take a longer time to accumulate lots of money but at the very least, the chances of them ending up behind bars are very low.
The corrective action = please educate and instil good values in children, relatives, friends, community, colleagues and everyone that you know in order to prevent any undesirable circumstances.
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