Enron: The Smartest Guys in the Room Essay

The Enron scandal, revealed in October 2001, eventually led to the bankruptcy of the Enron Corporation, an American energy company based in Houston, Texas, and the de facto dissolution of Arthur Andersen, which was one of the five largest audit and accountancy partnerships in the world. In addition to being the largest bankruptcy reorganization in American history at that time, Enron was attributed as the biggest audit failure. Enron was formed in 1985 by Kenneth Lay after merging Houston Natural Gas and InterNorth. Several years later, when Jeffrey Skilling was hired, he developed a staff of executives that, by the use of accounting loopholes, special purpose entities, and poor financial reporting, were able to hide billions of dollars in debt from failed deals and projects. Chief Financial Officer Andre Fastow and other executives not only misled Enron’s board of directors and audit committee on high-risk accounting practices, but also pressured Andersen to ignore the issues . Enron shareholders filed a $40 billion lawsuit after the company’s stock price, which achieved a high of US$90.75 per share in mid-2000, plummeted to less than $1 by the end of November 2001. The U.S. Securities and Exchange Commission (SEC) began an investigation, and rival Houston competitor Dynegy offered to purchase the company at a very low price. The deal failed, and on December 2, 2001, Enron filed for bankruptcy under Chapter 11 of the United States Bankruptcy Code. Enron’s $63.4 billion in assets made it the largest corporate bankruptcy in U.S. history until WorldCom’s bankruptcy the next year. Many executives at Enron were indicted for a variety of charges and were later sentenced to prison. Enron’s auditor, Arthur Andersen, was found guilty in a United States District Court, but by the time the ruling was overturned at the U.S. Supreme Court, the company had lost the majority of its customers and had closed. Employees and shareholders received l imited returns in lawsuits, despite losing billions in pensions and stock prices. As a consequence of the scandal, new regulations and legislation were enacted to expand the accuracy of financial reporting for public companies. One piece of legislation, the Sarbanes-Oxley Act, increased penalties for destroying, altering, or fabricating records in federal investigations or for attempting to defraud shareholders. The act also increased the accountability of auditing firms to remain unbiased and independent of their clients. Rise of  Enron In 1985, Kenneth Lay merged the natural gas pipeline companies of Houston Natural Gas and InterNorth to form Enron. In the early 1990s, he helped to initiate the selling of electricity at market prices and, soon after, the United States Congress approved legislation deregulating the sale of natural gas. The resulting markets made it possible for traders such as Enron to sell energy at higher prices, thereby significantly increasing its revenue. After producers and local governments decried the resultant price volatility and asked for increased regulation, strong lobbying on the part of Enron and others allowed for the proliferation of crony capitalism. As Enron became the largest seller of natural gas in North America by 1992, its gas contracts trading earned earnings before interest and taxes of $122 million, the second largest contributor to the company’s net income. The November 1999 creation of the EnronOnline trading website allowed the company to better manage its contra cts trading business. In an attempt to achieve further growth, Enron pursued a diversification strategy. The company owned and operated a variety of assets including gas pipelines, electricity plants, pulp and paper plants, water plants, and broadband services across the globe. The corporation also gained additional revenue by trading contracts for the same array of products and services with which it was involved. Enron’s stock increased from the start of the 1990s until year-end 1998 by 311% percent, only modestly higher than the average rate of growth in the Standard & Poor 500 index. However, the stock increased by 56% in 1999 and a further 87% in 2000, compared to a 20% increase and a 10% decrease for the index during the same years. By December 31, 2000, Enron’s stock was priced at $83.13 and its market capitalization exceeded $60 billion, 70 times earnings and six times book value, an indication of the stock market’s high expectations about its future prospects. In addition, Enron was rated the most innovative large company in America in Fortune’s Most Admired Companies survey. Causes of downfall Enron’s complex financial statements were confusing to shareholders and analysts. In addition, its complex business model and unethical practices required that the company use accounting limitations to misrepresent  earnings and modify the balance sheet to indicate favorable performance. The combination of these issues later resulted in the bankruptcy of the company, and the majority of them were perpetuated by the indirect knowledge or direct actions of Lay,Jeffrey Skilling, Andrew Fastow, and other executives. Lay served as the chairman of the company in its last few years, and approved of the actions of Skilling and Fastow although he did not always inquire about the details. Skilling constantly focused on meeting Wall Street expectations, advocated the use of mark-to-market accounting (accounting based on market value, which was then inflated) and pressured Enron executives to find new ways to hide its debt. Fastow and other executives â€Å"†¦created off-balance-s heet vehicles, complex financing structures, and deals so bewildering that few people could understand them.† Revenue recognition Main article: Revenue recognition Enron and other energy suppliers earned profits by providing services such as wholesale trading and risk management in addition to building and maintaining electric power plants, natural gas pipelines, storage, and processing facilities. When accepting the risk of buying and selling products, merchants are allowed to report the selling price as revenues and the products’ costs as cost of goods sold. In contrast, an â€Å"agent† provides a service to the customer, but does not take the same risks as merchants for buying and selling. Service providers, when classified as agents, are able to report trading and brokerage fees as revenue, although not for the full value of the transaction. Although trading companies such as Goldman Sachs and Merrill Lynch used the conventional â€Å"agent model† for reporting revenue (where only the trading or brokerage fee would be reported as revenue), Enron instead elected to report the entire value of each of its trades as revenue . This â€Å"merchant model† was considered much more aggressive in the accounting interpretation than the agent model. Enron’s method of reporting inflated trading revenue was later adopted by other companies in the energy trading industry in an attempt to stay competitive with the company’s large increase in revenue. Other energy companies such as Duke Energy, Reliant Energy, and Dynegy joined Enron in the wealthiest 50 of the Fortune 500 mainly due to their adoption of the same trading revenue  accounting as Enron. Between 1996 and 2000, Enron’s revenues increased by more than 750%, rising from $13.3 billion in 1996 to $100.8 billion in 2000. This extensive expansion of 65% per year was unprecedented in any industry, including the energy industry which typically considered growth of 2–3% per year to be respectable. For just the first nine months of 2001, Enron reported $138.7 billion in revenues, which placed the company at the sixth position on the Fortune Global 500. Mark-to-market accounting Main article: Mark-to-market accounting In Enron’s natural gas business, the accounting had been fairly straightforward: in each time period, the company listed actual costs of supplying the gas and actual revenues received from selling it. However, when Skilling joined the company, he demanded that the trading business adopt mark-to-market accounting, citing that it would represent â€Å"†¦ true economic value.† Enron became the first non-financial company to use the method to account for its complex long-term contracts. The mark-to-market method requires estimations of future incomes when a long-term contract is signed. These estimations are based on the future net value of the cash flow, costs related to the contract were often hard to predict. Often, the viability of these contracts and their related costs were difficult to estimate. Due to the large discrepancies of attempting to match profits and cash, investors were typically given false or misleading reports. While using the method, income from p rojects could be recorded, although they might not have ever received the money, and in turn increasing financial earnings on the books. However, in future years, the profits could not be included, so new and additional income had to be included from more projects to develop additional growth to appease investors. As one Enron competitor stated, â€Å"If you accelerate your income, then you have to keep doing more and more deals to show the same or rising income.† Despite potential pitfalls, the U.S. Securities and Exchange Commission (SEC) approved the accounting method for Enron in its trading of natural gas futures contracts on January 30, 1992. However, Enron later expanded its use to other areas in the company to help it meet Wall Street projections. For one contract, in July 2000, Enron and Blockbuster Video signed a 20-year agreement to introduce on-demand entertainment to various U.S. cities by year-end. After several  pilot projects, Enron recognized estimated profits of more than $110 million from the deal, even though analysts questioned the technical viability and market demand of the service. Whe n the network failed to work, Blockbuster withdrew from the contract. Enron continued to recognize future profits, even though the deal resulted in a loss. Special purpose entities Main article: Special purpose entity Enron used special purpose entities—limited partnerships or companies created to fulfill a temporary or specific purpose—to fund or manage risks associated with specific assets. The company elected to disclose minimal details on its use of â€Å"special purpose entities†. These â€Å"shell firms† were created by a sponsor, but funded by independent equity investors and debt financing. For financial reporting purposes, a series of rules dictates whether a special purpose entity is a separate entity from the sponsor. In total, by 2001, Enron had used hundreds of special purpose entities to hide its debt. Enron used a number of special purpose entities, such as partnerships in its Thomas and Condor tax shelters, financial asset securitization investment trusts (FASITs) in the Apache deal, real estate mortgage investment conduits (REMICs) in the Steele deal, and REMICs and real estate investment trusts (REITs) in the Cochise deal. The special purpose entities were used for more than just circumventing accounting conventions. As a result of one violation, Enron’s balance sheet understated its liabilities and overstated its equity, and its earnings were overstated. Enron disclosed to its shareholders that it had hedged downside risk in its own illiquid investments using special purpose entities. However, the investors were oblivious to the fact that the special purpose entities were actually using the company’s own stock and financial guarantees to finance these hedges. This prevented Enron from being protected from the downside risk. Notable examples of special purpose entities that Enron employed were JEDI, Chewco, Whitewing, and LJM. Executive compensation Although Enron’s compensation and performance management system was designed to retain and reward its most valuable employees, the system contributed to a dysfunctional corporate culture that became obsessed with short-term  earnings to maximize bonuses. Employees constantly tried to start deals, often disregarding the quality of cash flow or profits, in order to get a better rating for their performance review. Additionally, accounting results were recorded as soon as possible to keep up with the company’s stock price. This practice helped ensure deal-makers and executives received large cash bonuses and stock options. The company’s main focus was its stock price. Management was compensated extensively using stock options, similar to other U.S. companies. This policy of stock option awards caused management to create expectations of intense growth in efforts to give the appearance of reported earnings to meet Wall Street’s expectations. The stock ticker was located all throughout the company buildings, including the lobbies, elevators, and computers. At budget meetings, Skilling would develop target earnings by asking â€Å"What earnings do you need to keep our stock price up?† and that number would be used, even if it was not feasible. At December 31, 2000, Enron had 96 million shares outstanding as stock option plans(approximately 13% of common shares outstanding). Enron’s proxy statement stated that, within three years, these awards were expected to be exercised. Using Enron’s January 2001 stock price of $83.13 and the directors’ beneficial ownership reported in the 2001 proxy, the value of director stock ownership was $659 million for Lay, and $174 million for Skilling. Skilling believed that if employees were constantly worried about cost, it would hinder original thinking. As a result, extravagant spending was rampant throughout the company, especially among the executives. Employees had large expense accounts and many executives were paid sometimes twice as much as competitors. In 1998, the top 200 highest-paid employees received $193 million from salaries, bonuses, and stock. Two years later, the figure jumped to $1.4 billion. Timeline of downfall â€Å"At the beginning of 2001, the Enron Corporation, the world’s dominant energy trader, appeared unstoppable. The company’s decade-long effort to persuade lawmakers to deregulate electricity markets had succeeded from California to New York. Its ties to the Bush administration assured that its views would be heard in Washington. Its sales, profits and stock were soaring.† A. Berenson and R. A. Oppel, Jr. The New York Times, Oct 28, 2001. In February 2001, Chief Accounting Officer Rick Causey told budget managers: â€Å"From an  accounting standpoint, this will be our easiest year ever. We’ve got 2001 in the bag.† On March 5, Bethany McLean’sFortune article Is Enron Overpriced? questioned how Enron could maintain its high stock value, which was trading at 55 times its earnings. She argued that analysts and investors did not know exactly how Enron was earning its income. McLean was first drawn to the company’s situation after an ana lyst suggested she view the company’s 10-K report, where she found â€Å"strange transactions†, â€Å"erratic cash flow†, and â€Å"huge debt.† She telephoned Skilling to discuss her findings prior to publishing the article, but he called her â€Å"unethical† for not properly researching the company. Fastow cited two Fortune reporters that Enron could not reveal earnings details as the company had more than 1,200 trading books for assorted commodities and did â€Å"†¦ not want anyone to know what’s on those books. We don’t want to tell anyone where we’re making money.† In a conference call on April 17, 2001, then-Chief Executive Officer (CEO) Skilling verbally attacked Wall Street analyst Richard Grubman, who questioned Enron’s unusual accounting practice during a recorded conference call. When Grubman complained that Enron was the only company that could not release a balance sheet along with its earnings statements, Skilling replied â€Å"Well, thank you very much, we appreciate that †¦ asshole.† This became an inside joke among many Enron employees, mocking Grubman for his perceived meddling rather than Skilling’s offensiveness, with slogans such as â€Å"Ask Why, Asshole†, a variation on Enron’s official slogan â€Å"Ask why†. However, Skilling’s comment was met with dismay and astonishment by press and public, as he had previously disdained criticism of Enron coolly or humorously. By the late 1990s Enron’s stock was trading for $80–90 per share, and few seemed to concern themselves with the opacity of the company’s financial disclosures. In mid-July 2001, Enron reported revenues of $50.1 billion, almost triple year-to-date, and beating analysts’ estimates by 3 cents a share. Despite this, Enron’s profit margin had stayed at a modest average of about 2.1%, and its share price had decreased by more than 30% since the same quarter of 2000. As time passed, a number of serious concerns confronted the company. Enron had recently faced several serious operational challenges, namely logistical difficulties in operating a new broadband communications trading unit, and the losses from constructing the Dabhol Power project, a large power plant in India. There  was also increasing criticism of the company for the role that its subsidiary Enron Energy Services had in the California electricity crisis of 2000-2001. â€Å"There are no accounting issues, no trading issues, no reserve issues, no previously unknown problem issues. I think I can honestly say that the company is probably in the strongest and best shape that it has probably ever been in.† (Kenneth Lay answering an analyst’s question on August 14, 2001.) On August 14, Skilling announced he was resigning his position as CEO after only six months. Skilling had long served as president and COO before being promoted to CEO. Skilling cited personal reasons for leaving the company. Observers noted that in the months before his exit, Skilling had sold at minimum 450,000 shares of Enron at a value of around $33 million (though he still owned over a million shares at the date of his departure). Nevertheless, Lay, who was serving as chairman at Enron, assured surprised m arket watchers that there would be â€Å"no change in the performance or outlook of the company going forward† from Skilling’s departure. Lay announced he himself would re-assume the position of chief executive officer. Investors’ confidence declines Something is rotten with the state of Enron. —The New York Times, Sept 9, 2001. By the end of August 2001, his company’s stock value still falling, Lay named Greg Whalley, president and COO of Enron Wholesale Services and Mark Frevert, to positions in the chairman’s office. Some observers suggested that Enron’s investors were in significant need of reassurance, not only because the company’s business was difficult to understand (even â€Å"indecipherable†) but also because it was difficult to properly describe the company in financial statements. One analyst stated â€Å"it’s really hard for analysts to determine where [Enron] are making money in a given quarter and where they are losing money.† Lay accepted that Enron’s business was very complex, but asserted that analysts would â€Å"never get all the information they want† to satisfy their curiosity. He also explained that the complexity of the business was due largely to tax strategies and position-hedging. Lay’s efforts seemed to meet wit h limited success; by September 9, one prominent hedge fund manager noted that â€Å"[Enron] stock is trading under a cloud.† The sudden departure of Skilling combined with  the opacity of Enron’s accounting books made proper assessment difficult for Wall Street. In addition, the company admitted to repeatedly using â€Å"related-party transactions,† which some feared could be too-easily used to transfer losses that might otherwise appear on Enron’s own balance sheet. A particularly troubling aspect of this technique was that several of the â€Å"related-party† entities had been or were being controlled by CFO Fastow. After the September 11, 2001 attacks, media attention shifted away from the company and its troubles; a little less than a month later Enron announced its intention to begin the process of selling its lower-margin assets in favor of its core businesses of gas and electricity trading. This policy included selling Portland General Electric to another Oregon utility, Northwest Natural Gas, for about $1.9 billion in cash and stock, and possibly selling its 65% stake i n the Dabhol project in India. Restructuring losses and SEC investigation On October 16, 2001, Enron announced that restatements to its financial statements for years 1997 to 2000 were necessary to correct accounting violations. The restatements for the period reduced earnings by $613 million (or 23% of reported profits during the period), increased liabilities at the end of 2000 by $628 million (6% of reported liabilities and 5.5% of reported equity), and reduced equity at the end of 2000 by $1.2 billion (10% of reported equity). Additionally, in January Jeff Skilling had asserted that the broadband unit alone was worth $35 billion, a claim also mistrusted. An analyst at Standard & Poor’s said â€Å"I don’t think anyone knows what the broadband operation is worth.† Enron’s management team claimed the losses were mostly due to investment losses, along with charges such as about $180 million in money spent restructuring the company’s troubled broadband trading unit. In a statement, Lay revealed, â€Å"After a thorough review of our businesses, we have decided to take these charges to clear away issues that have clouded the performance and earnings potential of our core energy businesses.† Some analysts were unnerved. David Fleischer at Goldman Sachs, an analyst termed previously ‘one of the company’s strongest supporters’ asserted that the Enron management â€Å"†¦ lost credibility and have to reprove themselves. They need to convince investors these earnings are real, that the company is for real and that growth will be realized.† Fastow disclosed  to Enron’s board of directors on October 22 that he earned $30 million from compensation arrangements when managing the LJM limited partnerships. That day, the share price of Enron decreased to $20.65, down $5.40 in one day, after the announcement by the SEC that it was investigating the various suspicious activities of Enron, characterizing them as â€Å"some of the most opaque transactions with insiders ever seen† Attempting to explain the billion-dollar charge and calm investors, Enron’s disclosures spoke of â€Å"share settled costless collar arrangements,† â€Å"derivative instruments which eliminated the contingent nature of existing restricted forward contracts,† and strategies that served â€Å"to hedge certain merchant investments and other assets.† Such puzzling phraseology left many analysts feeling ignorant about just how Enron managed its business. Regarding the SEC investigation, chairman and CEO Lay said, â€Å"We will cooperate fully with the S.E.C. and look forward to the opportunity to put any concern about these transactions to rest.† Two days later, on October 25, d espite his reassurances days earlier, Lay dismissed Fastow from his position, citing â€Å"In my continued discussions with the financial community, it became clear to me that restoring investor confidence would require us to replace Andy as CFO.† However, with Skilling and Fastow now both departed, some analysts feared that revealing the company’s practices would be made all the more difficult. Enron’s stock was now trading at $16.41, having lost half its value in a little more than a week. On October 27 the company began buying back all its commercial paper, valued at around $3.3 billion, in an effort to calm investor fears about Enron’s supply of cash. Enron financed the re-purchase by depleting its lines of credit at several banks. While the company’s debt rating was still considered investment-grade, its bonds were trading at levels slightly less, making future sales problematic. As the month came to a close, serious concerns were being raised by some observers regarding Enron’s possible manipulation of accepted accounting rules; however, analysis was claimed to be impossible based on the incomplete information provided by Enron. Industry analysts feared that Enron was the new Long-Term Capital Management, the hedge fund whose bankruptcy in 1998 threatened systemic failure of the international financial markets. Enron’s tremendous presence worried some about the consequences of the company’s possible bankruptcy. Enron executives accepted questions in written form only. Proposed buyout by Dynegy Sources claimed that Enron was planning to explain its business practices more fully within the coming days, as a confidence-building gesture. Enron’s stock was now trading at around $7, as investors worried that the company would not be able to find a buyer. After it received a wide spectrum of rejections, Enron management apparently found a buyer when the board of Dynegy, another energy trader based in Houston, voted late at night on November 7 to acquire Enron at a very low price of about $8 billion in stock. Chevron Texaco, which at the time owned about a quarter of Dynegy, agreed to provide Enron with $2.5 billion in cash, specifically $1 billion at first and the rest when the deal was completed. Dynegy would also be required to assume nearly $13 billion of debt, plus any other debt hitherto occluded by the Enron management’s secretive business practices, possibly as much as $10 billion in â€Å"hidden† debt. Dynegy and Enron confirmed their deal on November 8, 2001. Commentators remarked on the different corporate cultures between Dynegy and Enron, and on the â€Å"straight-talking† personality of the CEO of Dynegy, Charles Watson. Some wondered if Enron’s troubles had not simply been the result of innocent accounting errors. By November, Enron was asserting that the billion-plus â€Å"one-time charges† disclosed in October should in reality have been $200 million, with the rest of the amount simply corrections of dormant accounting mistakes. Many feared other â€Å"mistakes† and restatements might yet be revealed. Another major correction of Enron’s earnings was announced on November 9, with a reduction of $591 million of the stated revenue of years 1997–2000. The charges were said to come largely from two special purpose partnerships (JEDI and Chewco). The corrections resulted in the virtual elimination of profit for fiscal year 1997, with significant reductions for the other years. Despite this disclosure, Dynegy declared it still intended to purchase Enron. Both companies were said to be anxious to receive an official assessment of the proposed sale from Moody’s and S&P presumably to understand the effect the completion of any buyout transaction would have on Dynegy and Enron’s credit rating. In addition, concerns were raised regarding antitrust regulatory restrictions resulting in possible divestiture, along with what to some observers were the radically different corporate cultures of Enron and Dynegy. Both companies  promoted the deal aggressively, and some observers were hopeful; Watson was praised for attempting to create the largest company on the energy market. At the time, Watson said â€Å"We feel [Enron] is a very solid company with plenty of capacity to withstand whatever happens the next few months.† One analyst called the deal â€Å"a whopper [†¦] a very good deal financially, certainly should be a good deal strategically, and provides some immediate balance-sheet backstop for Enron.† Credit issues were becoming more critical, however. Around the time the buyout was made public, Moody’s and S&P both reduced Enron’s rating to just one notch above junk status. Were the company’s rating to fall below investment-grade, its ability to trade would be severely limited if there was a reduction or elimination of its credit lines with competitors. In a conference call, S&P affirmed that, were Enron not to be bought, S&P would reduce its ra ting to low BB or high B, ratings noted as being within junk status. Additionally, many traders had limited their involvement with Enron, or stopped doing business altogether, fearing more bad news. Watson again attempted to re-assure, attesting at a presentation to investors that there was â€Å"nothing wrong with Enron’s business†. He also acknowledged that remunerative steps (in the form of more stock options) would have to be taken to redress the animosity of many Enron employees for management after it was revealed that Lay and other officials had sold hundreds of millions of dollars’ worth of stock during the months prior to the crisis. The situation was not helped by the disclosure that Lay, his â€Å"reputation in tatters†, stood to receive a payment of $60 million as a change-of-control fee subsequent to the Dynegy acquisition, while many Enron employees had seen their retirement accounts, which were based largely on Enron stock, decimated as the price decreased 90% in a year. An official at a company owned by Enron stated â€Å"We had some married couples who both worked who lost as much as $800,000 or $900,000. It pretty much wiped out every employee’s savings plan.† Watson assured investors that the true nature of Enron’s business had been made apparent to him: †Å"We have comfort there is not another shoe to drop. If there is no shoe, this is a phenomenally good transaction.† Watson further asserted that Enron’s energy trading part alone was worth the price Dynegy was paying for the whole company. By mid-November, Enron announced it was planning to sell about $8 billion worth of underperforming assets, along with a general plan to reduce  its scale for the sake of financial stability. On November 19 Enron disclosed to the public further evidence of its critical state of affairs. Most pressingly that the company had debt repayment obligations in the range of $9 billion by the end of 2002. Such debts were â€Å"vastly in excess† of its available cash. Also, the success of measures to preserve its solvency were not guaranteed, specifically as regarded asset sales and debt refinancing. In a statement, Enron revealed â€Å"An adverse outcome with respect to any of these matters would likely have a material adverse impact on Enron’s ability to continue as a going concern.† Two days later, on November 21, Wall Street expressed serious doubts that Dynegy would proceed with its deal at all, or would seek to radically renegotiate. Furthermore Enron revealed in a 10-Q filing that almost all the money it had recently borrowed for purposes including buying its commercial paper, or about $5 billion, had been exhausted in just 50 days. Analysts were unnerved at the revelation, especially since Dynegy was reported to have also been unaware of Enron’s rate of cash use. In order to end the proposed buyout, Dynegy would need to legally demonstrate a â€Å"material change† in the circumstances of the transaction; as late as November 22, sources close to Dynegy were skeptical that the latest revelations constituted sufficient grounds. The SEC announced it had filed civil fraud complaints against Andersen. A few days later, sources claimed Enron and Dynegy were renegotiating the terms of their arrangement. Dynegy now demanded Enron agree to be bought for $4 billion rather than the previous $8 billion. Observers were reporting difficulties in ascertaining which of Enron’s operations, if any, were profi table. Reports described an en masse shift of business to Enron’s competitors for the sake of risk exposure reduction. Bankruptcy Enron’s stock price (former NYSE ticker symbol: ENE) from August 23, 2000 ($90) to January 11, 2002 ($0.12). As a result of the decrease of the stock price, shareholders lost nearly $11 billion. On November 28, 2001, Enron’s two worst-possible outcomes came true: Dynegy Inc. unilaterally disengaged from the proposed acquisition of the company, and Enron’s credit rating was reduced to junk status. Watson later said â€Å"At the end, you couldn’t give it [Enron] to me.† The company had very little cash with which to operate, let alone satisfy enormous debts. Its stock price fell to $0.61 at the end of  the day’s trading. One editorial observer wrote that â€Å"Enron is now shorthand for the perfect financial storm.† Systemic consequences were felt, as Enron’s creditors and other energy trading companies suffered the loss of several percentage points. Some analysts felt Enron’s failure indicated the risks of the postâ€⠀œSeptember 11 economy, and encouraged traders to lock in profits where they could. The question now became how to determine the total exposure of the markets and other traders to Enron’s failure. Early calculations estimated $18.7 billion. One adviser stated, â€Å"We don’t really know who is out there exposed to Enron’s credit. I’m telling my clients to prepare for the worst.† Enron was estimated to have about $23 billion in liabilities from both debt outstanding and guaranteed loans. Citigroup and JP Morgan Chase in particular appeared to have significant amounts to lose with Enron’s bankruptcy. Additionally, many of Enron’s major assets were pledged to lenders in order to secure loans, causing doubt about what if anything unsecured creditors and eventually stockholders might receive in bankruptcy proceedings. Enron’s European operations filed for bankruptcy on November 30, 2001, and it sought Chapter 11 protection two days later on December 2. It was the largest bankruptcy in U.S. history (before being surpassed by WorldCom’s bankruptcy the next year), and resulted in 4,000 lost jobs. The day that Enron filed for bankruptcy, the employees were told to pack their belongings and were given 30 minutes to vacate the building. Nearly 62% of 15,000 employees’ savings plans relied on Enron stock that was purchased at $83 in early 2001 and was now practically worthless. In its accounting work for Enron, Andersen had been sloppy and weak. But that’s how Enron had always wanted it. In truth, even as they angrily pointed fingers, the two deserved each other. Bethany McLean and Peter Elkind in The Smartest Guys in the Room. On January 17, 2002 Enron dismissed Arthur Andersen as its auditor, citing its accounting advice and the destruction of documents. Andersen countered that it had already ended its relationship with the company when Enron became bankrupt.

The Nile Paper

River of Africa Surrounding landforms and availability of resources affect civilizations. The survival of countries in Africa relies on the Nile River. Physical landforms, climatic agriculture as well as ancient cultures and advances contribute to the effective utilization of the Nile. Various subdivisions and landforms along the coast of the river present tremendous opportunities for the Africans. Over time, the control of water intake and the substantial contribution of different climates create a vast diversity among the vegetation because of the proliferous soil by the Nile’s annual flood.The formation of ancient cultures, agriculture, and technologies significantly contributed to the developing countries adjacent the banks of the Nile. The tributaries, landforms and various transportation opportunities assist the Africans. The tributaries connect several locations in Africa to provide the countries with water, exploration, and fertile land. The portion of the river in Nor th Africa consists of three main sources: the White Nile, the Blue Nile, and the Atbara Rivers. The White Nile contains the largest mass of water so that during the dry season the river remains sustainable (Middleton vol. ). Western explorers investigated Africa because of the Blue Nile. The Blue Nile â€Å"is the link between the Mediterranean and the Deep Interior;† therefore, â€Å"the search for its source drew many Western explorers into Africa† (Murray 170). Among many of the smaller tributaries, the Atbara provides water in Ethiopia during the dry season. The Atbara â€Å"runs through the Ethiopian highlands during the wet seasons, but is dry from January to June† (Barrow). Therefore, it provides the amount of water suitable for the environment during that half of the year.The waters and soils of the Nile, the largest river in the world, supplies life to the barren desert and the river’s neighboring area. The two lands surrounding the Nile affect t he flooding and climate zones. The black land â€Å"was the fertile land on the banks of the Nile† (Barrow). Black layer contains silt which contains layers of sediments left behind from the annual flood; moreover, the sediments made the land useable for agriculture. The red land â€Å"was a region of inhospitable desert† (Barrow). This region of desert protected the Egyptians from attack bordering the country.The headwaters of the flood water originate from the Ethiopian Highlands. Every summer, â€Å"rain in the Ethiopian highlands sent a barrage of water that overflowed the banks of the Nile† (Barrow). Without the precipitation in the Ethiopian Highlands, the river would cease to provide any nutritional soil; as a result, the prominent agricultural land would indefinitely vanish from existence, leaving a barren, tundra like land. The waters contain numerous beneficial obstacles environing the area. The small ridges of the central plateaus mean that â€Å"the lower courses of rivers are characterized by waterfalls and cataracts† (Murray 12).The cataracts and waterfalls redirect the course of the river, affecting the vegetation and farming around it. Settlement in Sudan depends on the river. The White Nile River flows â€Å"north across the Sudanese border into the Sudd, the world’s largest permanent swamp† (Middleton 3: 66). Even though half of the river’s water evaporates in the swamps, half of Sudan’s population lives among the banks of the subsidiary. The river’s surrounding features, as well as the tributaries and waterfalls, significantly contribute to the welfare of the country’s needs.Flooding and climate influence the vegetation in the area, which remains vital for existence. Irrigation manipulates the growth and development of agriculture; moreover, irrigation systems contribute to improve the effective utilization of the river. Because of the dry climate and vast desert surroundi ng the river, the irrigation remains for life. The continents â€Å"unreliable rainfall and frequent drought make irrigation an essential tool for agriculture† (Middleton 2: 159). Irrigation supplies the water for the crops during the dry season, which remains essential for food. Flood cropping exemplifies ancient forms of irrigation and technology.The Egyptians would plant crops, and would then flourish when the river floods in the fall, followed by harvesting the crops in the winter; moreover, the people named the system basin irrigation for the pattern of events. (Middleton 2: 159). Flood cropping did not create an abundance of crops due to the unusual pattern of the great flood. In the early stages of developing irrigation, Egyptians formed a system called basin irrigation. When the Nile floods, the water fills the basin; as a result, when the river fell the farmers allowed â€Å"the water to drain away and then plant crops in the wet soil left behind† (Middleton 2 : 159).Basin irrigation created a mass majority of the planted crops which created a bountiful amount of food for the people; however, the farmers could only plant crops once a year. The vegetation grown around the Nile River Basin depends merely on the flooding season and by the proliferous soil. The annual flood of the Nile contributes to the mass vegetation and of the cycle of growth. The close correlation between the distribution of soil and vegetation remains a significant factor for plant cover in soil formation. The flood produces soil needed for growth of various types of vegetation.When the annual flood recedes, the river leaves a â€Å"thick layer of silt which was excellent soil to plant seeds in the soil after it had been ploughed† (Barrow). The silt provides the necessity to properly grow plants. The cycle of the growing crops consist of Akhet, Peret, and Shamuc. During the months of June through September, also known as the Akhet, the annually flood occurs; also , during these months, farming has ceased (Barrow). From the months of October through February, or the period called the Peret, the floodwaters recede, leaving a thick layer of silt; moreover, during this time the farmers plough the soil (Barrow).During the time of Shamuc, months from March through May, the farmers harvest the crops and workers repair the canals (Barrow). The three periods of time work in perfect tandem to grow crops. The vegetation grown in the Nile Basin depends on the soil for nutrients. One of the most prominent crops grown for centuries yet to come remains wheat and other types of grain along the Nile River. The grain along the Nile supplies people to make â€Å"bread, porridge, and beer. After the grain was grown, they grew assorted fruits† (Barrow).The vegetation grown in the Nile supplies the people with nourishment and trade opportunity. The climate along the Nile affects the type of vegetation grown along the banks as well as the human livelihood. The Nile consists of four climates: the tropical wet, the tropical dry, steppe, and desert. The tropical wet and tropical dry lie in the South of Africa, and they receive much rainfall, with some dry seasons (Boehm). The desert and steppe climate lie near the Mediterranean Sea, along the start of the Nile.They receive less than ten to fourteen inches of rain a year; moreover, they have little vegetation, leaving the various locations barren with extreme temperatures (Boehm). The strip of land along the Nile makes it hospitable because of the giant mass of water. Farmers use animals mostly for work, labor, and production of food. They would use these animals for â€Å"trampling in the seeds, pulling the plough, eating unwanted grain and providing them with food† (Barrow). The animals play an important role for the livelihood of the people by providing food, labor, and help with farming.The vegetation growth depends on the annual flood, climate, and animals of the area. The bas e of civilizations, technological advances, and cultures primarily exist in Africa because of the Nile, which makes it essential for the countries environing the area prosperous. Transportation began early for the Egyptians because of trade and fishing, but eventually they developed technologies for transferring goods to other countries. The ancient Egyptians developed boats from papyrus to obtain fish and materials for other necessities (Boehm). As the technologies advanced, other ideas arose to get to certain points in the river.The people would use â€Å"steamers to transport only to a certain point in the river† (Barrow). The steamers would eventually head to the Mediterranean through various tributaries until the goods traveled all around the world. This process would only be possible through the Nile River, which provided transportation to associate themselves with other countries. The start of a great civilization, Egypt, would progress only with the significant contri bution of the Nile River. Many Egyptians inhabited close to the Nile because it provided transportation, water, and amazing soil for growing crops.Through farming, the Egyptians created new mechanisms to make farming easier for the farmers. (Murray). A main source of food for the Egyptians remains fish. The most wanted fish from Africa today, the Nile Perch, has been shipped all around the world (Middleton Vol. 4). Today, almost all of the Egypt’s residents live along the Nile Delta or the along the course of the river. The river supplied the African countries with technology and culture, as well as the prominent ancient civilization of Egypt. Culture and energy existed because of the Nile River’s presence.Religion has been spread from country to country by the existence of the Nile tributaries. The capital of Sudan, Khartoum, lies between the White and Blue Nile. The spread of the Muslim religion has a major influence on the country, and â€Å"it is the primary relig ion of the Nile† (Murray 173). The religion was established when Muhammad had begun preaching around the Nile Valley, spreading it to various parts of the continent. Along the banks of the Nile, the Egyptians harvested a plant named sorghum. Because of the sorghum, the Egyptians developed â€Å"crafts such as boating, matting, basketry, and pottery† (Murray 46).The Nile provided vegetation and materials to further develop technologies in agriculture and aquaculture. Africans developed new technologies to harvest power from the water, and the future of energy, hydroelectric power. Today, â€Å"electricity is provided by generators powered by the Aswan Dam† (Boehm 426). The Nile’s Aswan Dam, developed to control the annual flood and preserve water, provides electricity for the people surrounded by the Nile. The Nile provided the ancient Egyptians with necessities, and the river continues to contribute to Egypt and Sudan today.Without the existence of the Nil e, Egypt would remain barren and underdeveloped. The base of Egyptian civilization and technologies developed the countries encircling the coast. Moreover, the Nile provides the people with food, electricity and transportation, which remain a significant aspect of everyday life. Although new developments have altered the need for the Nile, people still rely on the Nile. ? Works Cited Barrow, Mandy. Ancient Egyptian Farming. Chiddingstone Church of England School, Jan. 2013. Web. 21 Jan. 2013. Barrow, Mandy. The River Nile. Chiddingstone Church of England School, Jan. 013. Web. 21 Jan. 2013. Boehm, Richard G. World Geography and Cultures. Columbus, OH: McGraw-Hill Companies, 2012. Print. Middleton, John. Ed. Africa; an Encyclopedia for Student. Volume 2. New York: Charles Scribner’s Sons, 2002. Print. Middleton, John. Ed. Africa; an Encyclopedia for Student. Volume 3. New York: Charles Scribner’s Sons, 2002. Print. Murray, Jocelyn. Ed. The Cultural Atlas of Africa. New York: Checkmark Books, 1998. Print. Nile, Battle of the: Nile River. Photograph. Encyclopedia Britannica. Web. http://www. school. eb. com. com/eb/art-228/ ?

Martin Luther s Life Changing Life - 1604 Words

Martin Luther Kjerstine Martin HIST 101-04F May 1, 2016 Thu-ba-lump. A single horse’s hooves hit against the dirt as he runs down the road. Thu-ba-lump. Thunder claps overhead. Thu-ba-lump. Lightning pierces the ground, startling the horse and throwing the rider from it. On his knees, frightened for his life, he calls out into the storm, â€Å"Help me, St. Anne! I will become a monk! (Christian History Magazine Staff, 2000)† While no one knows exactly what happened on this day, it was quite possibly one of the most life-changing days in Martin Luther’s life. For he escaped the storm unhurt, and as he had promised to God, he would join the monkhood (Harrison, 2002). Of course, his entry into the Church was just the beginning of a long journey that he was about to embark on in becoming one of the most influential men in history. Though living in sixteenth-century Germany, Martin Luther had one of the most significant influences upon the western world not only by arguing the Bible – not the Church – as the ultimate authority over people and that each believer a member of the priesthood, but also by challenging, and ultimately breaking, the crippling hold that the Church had on the people of his time. Martin Luther was born in 1483 Germany, a terribly dark time in their history. In Western Europe, the Spanish Inquisition was just getting started, and in Eastern Europe, the Plague was still traveling through towns and wiping out populations. When Luther was born, only oneShow MoreRelatedâ€Å"I Am Happy To Join With You Today In What Will Go Down1420 Words   |  6 Pages125) Being a hero means to be a leader. To be a leader you have to have strength, courage, and commitment. In the 1960s, there were many leaders fighting for what they believe is the right of freedom and equality of all people. A major leader, Martin Luther King Jr. was involved in the Civil Rights Movement during the 60s. King was influenced by advocates of nonviolence such as Mahatma Gandhi. He wanted to seek equal ity for African Americans that were underprivileged and victims of injustice throughRead MoreEssay on The Life of Martin Luther King Jr.1244 Words   |  5 Pagesdevoted his life to changing the world. Martin Luther King, Jr. was born to Alberta and Martin Luther King. Alberta Williams King was born September 13, 1904 in Atlanta, Georgia. Martin Luther King, Sr. was born December 19, 1899 in Stockbridge, Georgia. Martins dad was a pastor at the Ebenezer Baptist Church in Atlanta, Georgia. His mother was a school teacher. His siblings were Christine King Farris born September 11, 1927, and Alfred Daniel Williams King born July 30, 1930. Martin was theRead MoreThe Civil Rights Movement911 Words   |  4 PagesThe Civil Rights Movement: Martin Luther King Jr. Martin Luther King Jr. changed history not only for African American’s, but for all who live in the United States. Martin was born on January 15, 1929, in Atlanta, Georgia. As a child Martin attended many public segregated schools throughout Georgia until he graduated at the age of fifteen. Following high school, Martin Luther King Jr. attended many colleges such as, Morehouse College, Crozer Theological Seminary, and Boston University. While studyingRead MoreThe Death Of Martin Luther1013 Words   |  5 Pages Martin Luther was born in Germany on November 10th, 1483. He was the son of Hans and Margarette Luther. In 1501 Martin entered the University of Erurt where he received a master of arts degree. He got a degree in grammar, logic, rhetoric and metaphysics which seemed as if he was becoming a lawyer. 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Symbolizing the Ideas and Beliefs in The Lottery - 1167 Words

Throughout time people have adopted different types of customs and ideas. In â€Å"The Lottery† the people from the community are sacrificing in order for their crops to grow. Many lives are at risk and in fear despite the acceptance of their actions.Symbolism is something that represents ideas or qualities of an object. An example of this can be a dove which represents peace. In the short story The Lottery, it takes place in the late 40s early 50s. The whole story is a contradiction because you would think that having a lottery would be a good thing, but in this story it isn’t. Every year Mr. Graves, who has the most power in the community, gathers them together to have or to do a lottery. As he calls the names of each man to make sure they†¦show more content†¦Mrs. Hutchinson ended up being the scapegoat of the group.† She was chosen to be sacrificed and as the people were walking towards her to stone her they all gathered around like a cage and kept her there so she wouldn’t move or get away and just like any animal cage they do the same thing. Throughout the whole story they talk about the black box saying that if they do away with it their crops won’t grow and that it’s a tradition. â€Å"It holds the key between life and death for every single person in the community.† It shows that is ado or die situation in and you must be apart of it in the community. It also represents tradition, â€Å"Harsh tradition of our society many of which we carry out daily with knowing why. We have tradition because we’re so accustomed to it not knowing why we do it, people just go along with it and do it because it a tradition and they think they have to follow it because their families from the past use to practices it. The black box also symbolizes evil because it kills innocent people for ridiculous reasons. It â€Å"embodies the evil acts that have been executed in the past and the ones to come.† (1869) The stones in the story symbolize death because that’s what they use to sacrifice the person that gets chosen when they do the lottery. â€Å"A person still has the capacity to reason would be harshly awoken by the truth that he or she was in the act of killing an innocent person.† In my own interpretation what this quote is saying that they makeShow MoreRelated Evidential Basis in Epistemic Justification Essay5302 Words   |  22 Pagesthe notion of epistemic justification, since the publication of Edmund L. Gettiers article Is Justified True Belief Knowledge? in 1963. In this article Gettier introduces two counter-examples to the traditional tripartite account of knowledge, i.e. the standard analysis of knowledge: knowledge as justified true belief, and shows that these thr ee conditions, the truth condition, the belief condition, and the justification condition, are not sufficient even if they are necessary, and thereby they couldRead MoreThe Rime Of The Ancient Mariner2966 Words   |  12 PagesRime? has seen was in its beginnings. It has its fair share of praise and criticism, praise given posthumously and criticism given while Coleridge was alive. Other than criticisms on the actual text, many people claim that Coleridge borrowed the ideas of others and used them. One must look past the criticisms and negative reviews on an author?s work in order to truly understand it. This would aid a reader in realizing ?Rime? is full of religious truths, subtly illustrating Coleridge?s religiousRead MoreA Popular American Topic On The 19th Century2982 Words   |  12 Pagessoon be put forth and justify the oppression and disenfranchisement of the natives culture and territory. Alfred A. Cave takes a in depth look at the Jacksonian era as well as its administration and thus finds supporting evidence that helps prove the idea that Jackson abused his power to pass the removal act to ensure the America would expands its horizons. Since its unification the United States has seen a variety of presidents, each taking office with different political agendas. One that standsRead MoreSda Manual Essay101191 Words   |  405 PagesRegard ............................................... Opposition of the Enemy ............................................................... Church Complete in Christ ............................................................ 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Poverty and Its Causes in Pakistan - 2152 Words

Poverty and its causes In Pakistan Submitted by: Muhammad Ahmad Adil Submitted to: Ms. Mehwish Submitted date: 8th February 2012 Assignment Topic: Poverty In Pakistan Management sciences Department Abdul Wali Khan University Mardan 2012 www.awkum.edu.pk February 8, 2010 Ms. Mehwish Teacher, Economy of Pakistan Abdul Wali Khan University Mardan Madam I am herewith present my Assignment authorized by you as a requirement for this course. In this assignment, I have tried to provide updated information about Poverty In Pakistan. I hope I have†¦show more content†¦In a world of six billion people, one billion have 80 percent of the income and five billion have less than 20 percent. This issue of global imbalance is at the core of the challenge to scale up poverty reduction. Case of Pakistan: Poverty has many dimensions in Pakistan. People have not only low incomes but they also are suffering from lack of access over basic needs. The major challenge of today is poverty reduction. In Pakistan, Poverty Reduction Strategy was launched by the government in 2001 in response to the rising trend in poverty during 1990s. It consisted of the following five elements:- (a) Accelerating economic growth and maintaining macroeconomic stability. (b) Investing in human capital. (c) Augmenting targeted interventions. (d) Expanding social safety nets. (e) Improving governance. The net outcome of interactions among these five elements would be the expected reduction in transitory and chronic poverty on a sustained basis. The reduction in poverty and improvement in social indicators and living conditions of the society are being monitored frequently through large- scale household surveys in order to gauge their progress in meeting the targets set by Pakistan for achieving the seven UN Millennium Development Goals byShow MoreRelatedPoverty in Pakistan: Causes and Consequences1610 Words   |  6 PagesPoverty, a multidimensional global phenomenon, as defined by World Bank is an income level below some minimum threshold deemed necessary to achieve basic needs. This minimum level is usually called the â€Å"poverty line†. The things required to satisfy basic needs are highly time and society dependent. Therefore, poverty lines vary from country to country as each country defines and sets the poverty line limit according to its o wn level of development, societal norms and values. But the contents of theRead MorePoverty in Afghanistan1663 Words   |  7 Pagesproblems of poverty in Pakistan. Following are the list of some causes of occurring rapid increase of poverty in our country. - Increase in the rate of prices. - Load shedding reduced the production which result into unemployment. - Corruption and poverty. - Increase in road beggars due to shortage of money. - Pakistan is not a welfare state. A big question. - Lack of proper education causes increase at phenomenal rates. - Inflation rate in Pakistan. - Top ten richest people in Pakistan. Pakistan: Read MoreEradication Of Poverty And Poverty1381 Words   |  6 PagesEradication of Poverty Part I: Background Poverty is widespread throughout the world, with around 20% of the entire population living on less than $1.25 per day. Everyday struggles for survival may include not having enough food for nourishment, no access to clean water, no proper shelter, lack of clothes, or no doctors and medicines. This lack of essential supplies and inability to improve one s life may be caused by a country s lack of resources. 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Transformational Leadership In Health Care â€Myassignmenthelp.Com

Question: Discuss About The Transformational Leadership In Health Care? Answer: Introduction Leadership contributes to the successful growth of the organisation. The challenges opportunities are managed with the able leadership of the organisation. The leadership also contributes to the growth of the human resources of the organisation. The enhancement of skill, the growth of the culture of the organisation consistent learning is possible with the able leadership. It is a fact that the growth of the organisation depends on the vital contribution of the leaders the followers of it. The strategies of the management for the growth of the organisation are successfully implemented with the help of leaders and their ability to lead the people of the organisation. There are different styles of leadership used by the leaders to bring effective work environment. Concept and theories of leadership There are different theories of leadership that focus on the traits and attributes for a leader to become successful. Theory of Great Man states that leadership traits are intrinsic. The leaders are born leaders. A true leader rises when he or she confronts the correct situation. Trait theory of leadership focuses on the qualities of the leadership like intelligence, responsibilities, creativity values(Barr Dowding, 2016). The theory makes an analysis of the mental, physical social traits of the leader. The Behavioural theory focuses on the behaviour of the leader. It studies how a leader is able to behave when he or she deals with the task the people in an organisation. Contingency theory of leadership advocates that there are different ways to lead the people and these ways are based on the situation. The effects of the leader are found when the leader takes decisions differently in different situations. Transactional leadership theory advocates that there is always a need of developing a mutual reinforcing atmosphere. The focus of the theory is on the beneficial relationship between the leaders the followers(Drucker, 2014). The theory advocates that a leader follows both reward and punishment to manage the people in the organisation. The transformational leadership style advocates that the leader sets an example and motivates followers. The leader interacts with people in the organisation and leads them to work successfully. Style, attribute behaviour of different leadership style It is very important to define the importance of the effective leadership. The effective leadership does not focus on holding the authority in the organisation. A true leader always makes an assessment of all the works and the decision that he or she takes in the course of his or her work(Drucker, 2017). It is very important for a leader to see that the decisions taken by him or her are aligned with the objectives of the organisation. For the successful growth of the leadership, it is always important for a person to have a good personality. A good leader interacts with the followers of the organisation and the manner of interacting with the followers also determines the ability of an individual to lead the team(Fassin, et al., 2011). People from different thinking, cultures and well managed by a good leader. The leader becomes very creative and manages the people with appropriate ability in order to become successful in the workplace. An autocratic leader wants the followers to work as per the instruction is given to them. The autocratic leader wants to manage the employees of the organisation as per the decision made by him or her. The leader makes the people follow him or her and does not allow the employees to make an opinion on his style of decision-making. A democratic leader is different from an autocratic leader. The leader allows the followers to take part in the decision-making process and contributes to their opinion and skills. The contribution of the employees is found in the strategic development of the organisation. A transactional leader leads the people of the organisation through his or her involvement in the activities of the organisation. The leader follows reward and punishment policy to motivate people to work in the workplace. The transformational leader is an inspirational leader and the leader sets the example before the followers to get motivated. The employees of the organisation are inspired by the leader. The employees get motivated and the transformational leader develops the ability of the people in the organisation. The transformational leader becomes visionary, good in communication, responsible, competent and has the problem-solving ability. The leader believes in self-esteem and discipline(Gentile, 2012). The empathy skill of the leader enhances values of the team performance. The goals of the organisation are achieved when the transformational leader leads the people in the correct direction. Importance of leadership qualities for managers The leader possess different qualities and these qualities help the leader to lead people in the correct direction for the fulfilment of the goals and objectives of the organisation(Gellis, 2001). The following are the different qualities that are used by the leader of the organisation to manage the challenges and opportunities to achieve the strategic objectives of the organisation. Vision The leader of an organisation is a man of vision. The vision of the organisation is set by the leader aligning his or her vision. The strategy that has been formulated by the leader is followed by the people in the organisation(Hughes Wearing, 2007). The most important activities of a leader are to communicate the strategic plan to the people in the organisation so that people remain aware of that. Good Communication skill A good leader communicates with the people appropriately. The people of the organisation are communicated the aim of the organisation and the ways the people should work to achieve the goals of the organisation(Luu, et al., 2008). The communication helps the people to get motivated and to use their skills for the development of the organisation. Motivation Motivating people in the correct direction is an ability of the leader. The leader sometimes takes the help of reward and punishment to motivate the people to perform their duties and responsibilities. The people perform well when they are motivated well. Interpersonal skill The leader of the organisation always tries to build cooperation and coordination among the people of the organisation. The leader tries to establish the healthy relationship among the employees. The people perform well when they work together as a team. Thus developing interpersonal skill is an important quality of the leader. Problem-solving quality The leader possesses problem-solving attitude. In the organisation, we come across many types of issues and problems. These issues are required to be solved unless the success of the organisation is not possible. The leader manages the issues with his problem-solving skills. Decision-making ability A good leader is a good decision maker. The leader takes an appropriate decision at the time of need. The leader involves people in the organisation to contribute their skills and experiences(Sanborn, 2016). The aim of the leader is to take the good decision so that the goals of the organisation will be achieved. Application of leadership in practice in teams in an organisation The leader of the organisation should be very sensible and sensitive. The development of a team and the performance of the team depend on the way leader lead the people. The leader knows the ability of the team members and encourages them to perform best of their abilities.The leader leads a team like a transformational leader. The leader builds trust and friendship among the people so that the team will work effectively(Velsor, et al., 2010). The leader remains very transparent and takes the decision as per the need of the organisation. The leader focuses on the best utilisation of the skills and experience of the team members. The leader knows that the combined efforts of the people in the organisation can only bring success in the organisation. The team building attitude is very important for the leader. The leader of the organisation always focuses on establishing the good culture in the organisation. The leader establishes the culture of the organisation that aligns with the set of beliefs, values and faith of the people in the organisation. The employees of the organisation accept the culture of the organisation when they feel that the culture of the organisation helps them to work independently and they have the freedom to use their skills and expertise in the workplace(Luu, et al., 2008). It is important for the leader of the organisation to focuses on good culture for the organisation. The practice of good leadership is found in the organisation when the leader of the organisation acts sensibly during the change in the organisation. The strategic plan is formulated by the organisation and the plan is changed as per the organisation needs. The people in the organisation do not accept the change if they are not satisfied with the change initiative. They need to know the cause of the change and how the change will contribute to the growth of the organisation(Reich, 2000). The leader of the organisation uses the skills to motivate people. The leader makes the people know the need of the change for the growth of the organisation. This motivates people to accept the change. Assessment of my leadership skills and the areas I need to improve I have earned that a good leader works on a certain philosophy. The leader follows the philosophy and works effectively. I understand that a leader requires knowing the different leadership styles so that he or she can use them in different situations. As a leader I understand that I will behave like a democratic leader, a visionary leader, a transaction leader or a transformational leader and all these styles will be used as per the demand of the situation. I understand that I need to be a transformational leader as it is very important to manage people in different situations. The complex situations will be easily handled by me if I develop my problem-solving ability. I will be able to take the appropriate decision when I will know understand the perceptions and expectations of the people in the organisation. A true leader should also motivate the employees by fulfilling their individual needs. A satisfied worker gives his or her complete efforts for the growth of the organisation. Thus as a leader, I must try to satisfy my fellow workers so that the objectives of my organisation will be accomplished. As a student, I have learnt about the need of developing leadership skills to manage people in the organisation. The knowledge I get about the leadership skills will be helpful to utilise in the working place. It is also very important to know how to manage the people in the diverse culture. I have learnt that I need to be very empathetic to my followers and I will try to motivate people to achieve their goals. The areas I feel very important for me to develop are the development of the interpersonal skills, decision-making skills and problem-solving skills. All these three skills are very important for the leader of the organisation. I will develop all these qualities in order become a successful leader. Conclusion Leadership is an ability to inspire the people to work for the achievement of the goals of the organisation. A true leader motivates people to work and contribute their expertise to the development of the organisation. The appropriate decision of the leader keeps the people work without any worries and anxiety. The good culture also helps the employees to be very productive in the workplace. The problem-solving attitudes and interpersonal skills are very important for the leader. I understand that in order to be very successful in my workplace as a leader I need to develop my skills and should know how and where I should use the different styles of leadership. I must act like a visionary leader and lead the people in the correct direction. I will focus on establishing good work culture among the team members and motivate all to work collectively. This will help me to be a successful leader. References Barr, J. Dowding, L., 2016. Leadership in Health Care, 3rd Edition. London: SAGE Publication. Drucker, P., 2014. Leadership vs. Management. [Online] Available at: https://www.diffen.com/difference/Leadership_vs_Management [Accessed 21 09 2017]. Drucker, P., 2017. Managerial Point of view. [Online] Available at: http;//solaas.com.ar/harald/en/liderazgo2 [Accessed 21 09 2017]. Fassin, Y., Van, R. A. Buelens, M., 2011. Small business owner-managers perceptions of business ethics and CSR-related concepts. J Bus Ethics, 98(3), pp. 425-453. Gellis, Z. D., 2001. Social work perceptions of transformational and transactional leadership in health care. Social Work Research, vol.25. no. 1, pp. 17-25. Gentile, M. C., 2012. Values-driven leadership development: Where we have been and where we could could go. Organisation management Journal, pp. 188-196. Hughes, M. Wearing, M., 2007. Organsiations and Management in Socila Work. Los Angels: sage. Kouzes, J. Posner, B., 2008. The Leadership Challenge: The Leadership Practcies Inventory. San Francisco: CA: Jossey- Bass. Luu, V. T., Kim, S. Y. Huynh, T. A., 2008. Improving project management performance of large contractors using. International Journal of Project Management,, 256(7), pp. 758-769. Mintzberg, H., 2009. Managing. San Francisco: Berrett-Koehler. Qureshi, T. M. Warraich, A. S., 2009. Significance of project management performance assessment. International Journal of Project Management, Volume 27, pp. 378-388. Reich, R., 2000. The future of sucess: Working and living in the new economy. New York: Alfred Knopf. Sanborn, M., 2016. 9 Difference Between Managers and Leaders. [Online] Available at: https://www.marksanborn.com/blog/9-differences-between-managers-and-leaders/# [Accessed 21 09 2017]. Velsor, V., McCuley Ruderman, 2010. Developing of Leaders. In: The Center for Creative Leadership handbook of leadership development. San Francisco,: Jossey Bass.

Racial Discrimination Madison Community an Example of the Topic Government and Law Essays by

Racial Discrimination Madison Community Introduction Racial discrimination, ethnicity, sectarian violence, religious animosity, tribal clashes and nepotism are rampant forms of racial segregation in most communities. Where such kinds of vices are common, civil strife and animosity are manifested, and often-bloody clashes and tensions result. For peace to prevail in any given community tolerance amongst the different races in a given community is required. Barker, 2005. In addition the law enforcement agencies are required to keep vigilant as traces of racial strife still manifest themselves in my community. In this autobiographical paper I will discuss the challenges facing the Madison Community in terms of racial relations. Need essay sample on "Racial Discrimination Madison Community" topic? We will write a custom essay sample specifically for you Proceed Our Customers Very Often Tell Us:Who wants to write paper for me?Professional writers suggest: We Write All Kinds Of PapersCustom Essay Order Best Essay Writing Service Review Cheapest Essay Writing Service Paper Writing Service I am a white living in Madison area, my community is predominantly white. There are however many race related problems in the Madison Community. The community of Madison Community is comprised of several races. About 80%, of the total population of my community comprise of whites. Therefore, the whites constitute majority of the residents in Madison. African Americans constitute approximately 11% of the Madison community, while Asians constitute about 8% of the total population. The other races which comprise the Madison Community include; American Indians about 1% and others which comprise of about 3.0%. The whites being the majority have at sometimes been accused of being discriminatory to the racial minorities, mainly the African Americans and American Indians. In Madison Community, opportunities in the social arena, political arena, educational opportunities and even economic opportunities have largely been disproportionate and based on race and ethnicity. Clearly, in the Madison Community, racial minorities have continued to be treated differently and unfairly. Where this happens, corrective action has been taken and culprits subjected to legal procedures, this shows that, despite presence of racial discrimination, efforts are being put at the community level to fight the problem. Racial minorities have been discriminated against for a very long time in almost all spheres of social life. Racial marginalization in the Madison is manifested in many ways and especially in the resource allocation. In other procession has the racial minorities been so underrepresented. The anomalies in racial minorities representation in many sectors such as education, and in the employment especially in professions such as law, dentistry and medicine in the my community has been occasioned by amongst other factors, social-cultural factors which impede the development of such communities. Albert and Ronald. 1990 The above can also be accounted for by the seemingly low entry in such schools such as law and medical. The above situation can be termed as pathetic on account of the fact that racial minorities constitute well above 20 percent of the American population. It makes a lot of sense to have every race represented well in aspect. Racism is still common in USA although it has significant dropped compared to the 1960s. Barker, 2005. Against such a background, it makes sense to have one of their own (the racists minorities) to represent them in all spheres of life. The surest way to guarantee fairness in the American society is the equal representation of race and ethnicity in the legal profession. The under representation needs to be addressed right from the community level, and every one, the leaders, the community members from various racial groups as well as the government agents must be well represented. The institutions of learning as well as agencies of the government such as the criminal justice department can play a big role by ensuring that they admit more and more minority group members into the institutions such as; schools which will eventually see such groups discriminated against. The US census bureau 2005, mentions Africans- Americans as well as the Hispanics as the largest minority groups. The understanding of the racial representation disparities is crucial in the issue of under presentation. Another problem being witnessed in my community is that, one race (the whites), control all the key sectors including the economy, political leadership as well as the administration in my community. This implies that, the whites control the resources and opportunities available. Consequently, the discrepancies result into skewed distribution of wealth. Poverty amongst the racial minorities has become evident and rampant as a result of the inequalities. Social capital theories associate the under presentation with the position of such groups at the bottom of the social economic ladder. Brown, 1931. This makes them be closed from outer world and therefore unable to access some privilege and opportunities compared to whites who in terms of social economic factors something which highly increases their chances of joining top notch careers. To solve the above problem in my community, there is a need for exposing of more minority group members to diverse networks. The under presentation witnessed in my community has been occasioned by the deficiency the racial minorities themselves posses in terms of high likely hood of the members of the racial minorities to drop from school compared to the whites. There is a need for affirmative action which will result into more minority groups members gaining equal access to opportunities such as in; health and education, hence increasing chances of a more balanced society. Social life in Madison Community has been boosted in that all residents regardless of their race have an access to common religious meeting places. In addition, recreational facilities are free to everyone regardless of their race. Although there is a high crime rate in Madison Community, the communities live in harmony and rarely are any incidences of racially motivated crime reported. There is a need for law enforcers to be firm in their implementation of the federal anti-discrimination laws so as to promote a mutually beneficial interracial existence. Such efforts in Madison Community have constituted the establishment of the Madison Community human rights and human services community groups that is solely concerned with resolving racially motivated human rights in the Madison area. This program has proved to be an effective way of promoting co-existence in the Madison Community. There is also a need for more programs from both the state and federal governments to such as race-based hiring quotas and race-based education programs. Although the above can be a cause for bias towards the white majority, it is nevertheless a right step towards correcting the racial discrimination currently being experienced in Madison Community. The leadership in my community is comprised of leaders from different racial background. However most of the leaders are whites given the fact that about 80% of the community members are white. Unlike in the past when leaders would openly downplay racial discrimination, today things are different and the leadership is keen to eradicate racial discrimination from the community. The leadership of the community continues to address the racial discrimination issue in that every time such cases are reported the leadership is committed to applying justice and condemning the act openly. This has been very helpful in the fight against racial discrimination in that leaders are viewed by many as role models and people are more likely to obey what they perceive as being the wishes of the leaders. If I were a leader in my Madison community I would put in place the following measures to eliminate all forms of racial discrimination, which continues to threaten the peaceful coexistence of members of my community. My winning strategy would involve; ensuring a discrimination-free community. I would also set up a special committee comprising of members from all races to investigate all cases and allegations of racial discrimination reported in my community. I would also start programs that would aim at creating public awareness in learning institutions and other institutions which is rampant in Madison. In spite of the efforts from the leadership in the community to fight racial discrimination, the vice continues to be manifested in the daily lives of people. I interviewed Debra who is an a Latino, about her efforts to secure a chance at a community college. The lady complained that despite the fact that she had all the relevant qualifications, she passed her admission test well but it has been over 2 years now and she has not heard back from the college. She suspects it is a case of racial discrimination since most of her colleagues from other racial backgrounds with whom they applied together have received a feedback from the college. Debra is worried because she was denied admission to the college. She is now worried that her dream profession. She blames all her misfortunes on what she terms as deep rooted racial discrimination in Madison Community. Debras case is an indication that a lot needs to be done in order to fight racial discrimination, tension and suspicions that exists in the Madison Community. Despite the isolated cases such as those cited above the residents of Madison community have continued to collaborate in many areas irrespective of racial backgrounds. There are many joint community projects whereby members participate regardless of ones race. There is a growing evidence that any member of the community can apply and get a job in any place in Madison as long as one possess basic qualifications. There are many interracial marriages happening, which all point to the fact that, the society needs the society is improving in terms of racial relations. In terms of the texts addressing the racial discrimination issue, there are many scholars from all races that have addressed the issue of racial discrimination. For instance, to carry out this research I referred to articles written by whites who condemn the vice. No single author seemed to support racial discrimination, a good indicator that this war is close to being won. Of all means of fighting racial discrimination the media is a strong avenue. In Madison Community, the media has shown great responsibility and professionalism. Most programmes aired are sensitive to all races. The FM stations and the print media have all shown commitment to diffusing racial tensions where they suffice and have tended to promote racial co-existence. Conclusion Efforts should be made to investigate all cases that are reported on racial discrimination. Where one is found guilty, proper legal steps should be taken to address the matter. More stringent laws should be introduced to fight remnants of racial discrimination. The Madison community is on the right track in terms of inter-racial relations, if the ongoing efforts are continued, racial discrimination shall be totally eliminated in the community in the foreseeable future. No meaningful peace in the community shall be realized for as long as there is a problem with interracial relations. References Albert, Peter J. and Ronald Hoffman. 1990. We Shall Overcome: Martin Luther King, Jr., and the Black Freedom Struggle. New York: Pantheon Books in cooperation with the United States Capitol Historical Society Barker, Emily. 2005. True Colors: not all diversity is created equal. Minority Law Journal. Erickson, Bowne H. 1996. Culture, Class and Connections. American Journal of sociology. Vol.