Greed for perfection, Enron brought its own destruction. 200 1, 10, Enron, the world energy giant, exposed the false accounting scandal and formally filed for bankruptcy on February 2, 65438. The assets listed in the bankruptcy list were $49.8 billion, far exceeding the record of $35.9 billion set by Taxaco in 1987, making it the largest bankruptcy case in American history at that time. Enron, a super company ranked seventh among the world's top 500 enterprises, has been rated as "the most innovative" by Fortune magazine for six consecutive years, and has been highly respected in the business community for many years, and has since become history. In February 2000, when Enron held its annual meeting in Houston attended by credit analysts and bond investors, the company was in a good situation. At that time, Enron's share price was about $80 per share, and its capital market value reached $70 billion, a fourfold increase over three years ago. However, Enron executives still believe that this share price is not high enough. Jeffrey Skilling, then CEO of Enron, declared to the participants that due to the company's dominant position in the energy market and its new plan to enter the telecommunications market, Enron's share price should rise to $65,438+026. However, two years later, Enron's share price not only fell to a few cents, but also its company went bankrupt. According to the analysis of American business experts, Enron's current dangerous situation is related to its past rapid development, too large stalls and some illegal business activities within the company. According to Cameron Paine, an energy finance consultant, Enron's predecessor, Houston Natural Gas Company, is operating very well and plays an important role in Texas. However, in 1985, Kenneth Lai planned to merge his business rival, the United North Company, which was superior to his own, and the merged Enron Company was heavily in debt. In the 1980s, Enron was overwhelmed by these debts, and it tried to reduce its debts by transferring part of its equity, but it failed. Later, Kenneth Lay's left shoulder and right shoulder-Jeff Skilling invented the leverage expansion method, which solved the crisis of the company's capital shortage. However, as a result, the company once again embarked on the road of rapid expansion. In fact, skilling's method did not completely solve Enron's debt problem, but the rapid expansion of the company covered up the problem. By 1992, with Enron becoming an international multinational company, people seem to have forgotten its debt problem. That year, Enron extended its business to Europe, South America and Russia, and then entered the Indian and China markets. He not only did his old job well-natural gas, but also expanded his business to power generation, pipelines and many other fields, and began his prosperous history. If Enron could manage these projects well, it could have ensured the healthy development of the company. However, these expansion activities did not bring returns to the company as Enron claimed. Enron invested $7.5 billion abroad, but the return was negligible. The two most typical commercial failure cases are: Dalbird power station project in India and Essex water treatment project in Britain. It never rains but it pours to describe the Darbord project, which was in trouble before it started. Because it was determined to be economically feasible, the World Bank refused to provide loans for this project in 1993. As a result, Enron invested1200 million dollars by itself. Later, due to the change of political parties in India, the project was dismounted twice and was resumed after more than a year of negotiations. It is very easy to wait until this 740 MW unit is connected to the grid to generate electricity. The only user, Maharashtra Electric Power Commission, thought the charge was too high and refused to pay the electricity bill. This dispute has not been resolved for a long time, so in 200 1 year, Enron had to stop the operation of the power station. For the same reason, the second 1444 MW unit was shut down in June 2006 1 when the total project amount was 90% completed. On the Essex project, Enron suffered even greater losses. 198, the company spent $2.8 billion to acquire the British Wessex Water Treatment Company, hoping to operate the water treatment business with this company as a platform, and named the project Essex. Due to lack of experience, after the project entered the market in June 1999, it was repeatedly defeated by its old rivals in the bidding competition, and Enron had to pay a high price to grab business with them. And the order that can be made in this way must be at a loss. Unfortunately, England lowered the water price at this time, which affected the company's main income and caused the company's share price to plummet by 40%. In the loss of $638 million announced by Enron in the third quarter of 2000/kloc-0, Essex project accounted for a considerable share. However, in order to realize the goal of changing from "the largest energy company in the United States" to "the largest energy company in the world", Enron continued to expand to India, the Philippines and other countries, including building a natural gas pipeline network from Bolivia to Brazil. The business in North America has also expanded from the initial development and transportation of natural gas and oil to various energy products and services including power generation and power supply. However, many of these projects were unsuccessful. The failure of Enron's operation is not accidental, but has an inevitable relationship with the company's corporate culture. Enron's method of rewarding performance is quite puzzling. Managers complete a transaction, and the company encourages them not according to the actual income brought by the project, but according to the predicted performance. In other words, if the project is expected to bring 30% return to the company on the day of signing the agreement, then the person in charge will give the bonus according to this figure. A former vice chairman of Enron, who asked not to be named, said that in this way, managers often tamper with the project plan to make it look profitable, and then quickly finalize it and get dividends, and everything will be fine. As for whether to make money in the future, it's none of his business at all. At present, the prevailing accounting system in the American trade industry encourages the managers of Enron to act rashly when signing projects. According to this system, when signing a long-term contract, the company will record all the expected income to the company in advance. If the future business performance is inconsistent with the forecast, it will be calculated as a loss. Unrealistically seeking perfection and blindly spreading the stalls are dangerous to any enterprise at any time. Even if Enron is a world energy giant, it can't escape this iron law.