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Avow or Avoid?: The Public Communication Strategies of Enron and WorldCom
Unformatted Document Text:  Avow or Avoid? 4 Enron Enron was created from a merger of Houston Natural Gas and InterNorth, the parent company of Northern Natural Gas in late 1985. Kenneth Lay was named chairman in February 1986. Described as a visionary, Lay took advantage of energy deregulations. Assisted by Jeff Skilling, a management consultant who would later become CEO of Enron, Lay shifted the company’s focus from transporting natural gas to trading it. Enron went on to become the number natural gas trader in the United States (Analysis, Company Profile, Oct. 23, 2001). Although the company eventually diversified, its energy wholesale business became its biggest money maker. A major contributor to the wholesale business was Enron Online. The online venture was developed from an idea sketched out on a napkin in a bar. It was rolled out in November 1999 and went on to become the world’s largest e-commerce system (Analysis, Company Profile, Oct. 23, 2001). Enron’s penchant for branching out and innovating resulted in Fortune magazine describing it as the “most innovative company in America” for six consecutive years. During the second quarter of 2001, its profits reached $404 million and its revenues were $50.1 billion (Analysis, Company Profile, Oct. 23, 2001). An investment firm analyst summed up the Enron experience. “The company’s greatest strength has been its corporate culture. They have been very successful in pursuing a deliberate strategy that I would call something like Desert Shield or Desert Storm. Bring in overwhelming firepower, respond and wipe out your competitors.” (Analysis, Company Profile, Oct. 23, 2001, para. 24). But on August 14, 2001, Jeff Skilling suddenly resigned as CEO (Ryser, Aug. 20, 2001). Lay stepped in to replace him. Two months later, Enron announced that it was under investigation by the Securities and Exchange Commission (SEC) for certain related party

Authors: Reber, Bryan. and Gower, Karla.
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Avow or Avoid?
4
Enron
Enron was created from a merger of Houston Natural Gas and InterNorth, the parent
company of Northern Natural Gas in late 1985. Kenneth Lay was named chairman in February
1986. Described as a visionary, Lay took advantage of energy deregulations. Assisted by Jeff
Skilling, a management consultant who would later become CEO of Enron, Lay shifted the
company’s focus from transporting natural gas to trading it. Enron went on to become the
number natural gas trader in the United States (Analysis, Company Profile, Oct. 23, 2001).
Although the company eventually diversified, its energy wholesale business became its
biggest money maker. A major contributor to the wholesale business was Enron Online. The
online venture was developed from an idea sketched out on a napkin in a bar. It was rolled out in
November 1999 and went on to become the world’s largest e-commerce system (Analysis,
Company Profile, Oct. 23, 2001).
Enron’s penchant for branching out and innovating resulted in Fortune magazine
describing it as the “most innovative company in America” for six consecutive years. During the
second quarter of 2001, its profits reached $404 million and its revenues were $50.1 billion
(Analysis, Company Profile, Oct. 23, 2001).
An investment firm analyst summed up the Enron experience. “The company’s greatest
strength has been its corporate culture. They have been very successful in pursuing a deliberate
strategy that I would call something like Desert Shield or Desert Storm. Bring in overwhelming
firepower, respond and wipe out your competitors.” (Analysis, Company Profile, Oct. 23, 2001,
para. 24).
But on August 14, 2001, Jeff Skilling suddenly resigned as CEO (Ryser, Aug. 20, 2001).
Lay stepped in to replace him. Two months later, Enron announced that it was under
investigation by the Securities and Exchange Commission (SEC) for certain related party


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