International -- Readers Report
The Enron Fiasco: So Many Lessons
"The fall of Enron" (Cover Story, Dec. 17) provided real insight. Having once been described in the press as a guru, I sympathize with the four experts you quote in the panel "Everyone loved Enron." The issue is not that none of them could have predicted Enron Corp.'s demise but that they had all praised Enron at a specific point in time under specific market conditions without the aid of a due diligence process.
Just as the climate change made the most successful predator on this planet--the Tyrannosaurus Rex--extinct, a change in the business climate made Enron extinct. New models have been suggested that allow a more accurate prediction of the inevitable changes in the business climate, and these would have helped Enron.
It is not skillful to predict success or failure; it is skillful to know when the risk of both is at its peak.
Gerald Michaluk
Glasgow
Your feature about the demise of Enron recounts very vividly how so many people (including some of the best professionals) bought the Enron story hook, line, and sinker. And your editorial ("Enron: Let us count the culprits") pulls no punches about the many culprits who participated in this stock frenzy and extolled the virtue of this "new business model" and this "corporation of the 21st century." As it has happened so many times in the past, reality caught up with the dreams, and the financial wizardry proved to being just plain old "cooking the books."
David Harari
Rocquencourt, France
How about some broader criminal legislation to put those CEOs, CFOs, directors, accountants, and bank and investment managers responsible for negligent and dubious business practices in jail for a few years? Every other profession can be held liable. What makes business nabobs such sacred cows? If a few more--from Japanese bankers to Wall Street hedge-fund gurus--were liable to time in the pen for gross financial negligence instead of slipping off to a golden retirement, the entire global investment structure might feel the improvement.
F.A.C. Lister
Nauheim, Germany
Very interesting and scary, your article on Enron. Had to read it twice because it was hard for me to believe this type of disaster could happen in the U.S. in 2001. This time the "barbarians" were not at the gate, but in the kitchen.
Carlos Cortini
Sao Paulo
How ironic for those of us in middle management that in a culture famous for a brutal ranking process, designed to extract maximum performance from the general workforce, senior management was unable to make hard choices about spending and investment decisions. Simply claiming that an industry was ripe for the "Enron Way" was enough to obtain a blank check from management. Hiding this activity off the balance sheet proves that many executives weren't the masters of the business world they supposed themselves to be, but were simply out of their depth.
Stephen Schwarz
Houston
BusinessWeek's article was very enlightening, except that it lacked the suggestion that Enron's top executives might have been emboldened in their questionable (and timely) disposition of their Enron stock by their strong political ties. They must have been pretty sure the Securities & Exchange Commission wouldn't come after them.
James E. Patterson
St. Louis
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Copyright 2002 , by The McGraw-Hill Companies Inc. All rights reserved.
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