Enron: Widespread myopia

This article looks at the Enron affair in terms of what investors and experts fail to take into account to being able to predict Enron collapse. The authors show how analysts could have predicted Enron's difficulties in view of the incoherence observed in its strategic decisions, from the viewp...

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Bibliographic Details
Published in:Critical perspectives on accounting 2007-07, Vol.18 (5), p.539-557
Main Authors: Chabrak, Nihel, Daidj, Nabyla
Format: Article
Language:English
Subjects:
Accounting
Accounting practices
Alienation
Analysts
Business administration
Business failures
Capitalism
Contradictions
Discourse
Diversification
Earnings forecasting
Energy industry
Enron
Executives
Financial analysis
Forecasts
Fraud
Humanities and Social Sciences
Ideology
Reification
Resource-based and competence-based approaches
Rhetoric
Risk
Scandals
Strategic behaviour
Strategic diagnosis
Studies
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Summary:This article looks at the Enron affair in terms of what investors and experts fail to take into account to being able to predict Enron collapse. The authors show how analysts could have predicted Enron's difficulties in view of the incoherence observed in its strategic decisions, from the viewpoint of the theory of resource-based and competence-based approaches. Certainly, it was hard to suspect that numbers could lie on account of the financial manipulation doubled by the rhetorical discourses of executive managers who succeeded in imposing a flourish image of their company. The authors’ view takes on a political dimension by illustrating the contradictions of the system that sustain the widespread myopia, where everyone is purely alienating himself.
ISSN:1045-2354
1095-9955
DOI:10.1016/j.cpa.2005.10.004