Enron and the California Energy Crisis: The Role of Networks in Enabling Organizational Corruption

Abstract

We provide an analytically structured history of Enron's involvement in the California energy crisis, exploring its emergence as a corrupt organization and its use of an interorganizational network to manipulate California's energy supply markets. We use this history to introduce the concept of network-enabled corruption, showing how corruption, even if primarily enacted by a single dominant organization, is often highly dependent on the support of other organizations. Specifically, we show how Enron combined resources from partner firms with its own capabilities, manipulating the energy market and capitalizing on the crisis. From a methodological point of view, our study emphasizes the growing importance of digital sources for historical research, drawing particularly on telephone and email records from the period to develop a rich, fly-on-the-wall understanding of a phenomenon that is otherwise hard to observe.

A guided tour through the qualitative research city

“…Historical research is rarely found in SCM journals, but one can find SCM‐related applications elsewhere, which interpret past events to enrich our understanding of contemporary practice. For instance, Mollanger (2018) examined how 19th‐century strategies in cognac branding changed supply chain structures; Nix et al (2022) used historical analysis to investigate a firm's network‐based corruption during an energy crisis; and Tennent and Mollan (2020) explored narrative framing in the strategic development of the music retail sector.…”

Increasing Internal Auditor Accountability in Law of State Financial Management

“…Internal audit assists institutions in achieving objectives through a systematic and organized approach to evaluating and improving the effectiveness of risk management, control, and governance processes (Nix, Decker & Wolf, 2021). The Auditor carries out the audit, and there are two types in the state financial management system in the public sector, according to Sussman (2022), namely Internal Auditor and External Auditor (Bix, 2021).…”

“…Entry Level, Infrastructure, Integrated, Managed, and Optimized (Parker and Sun, 2023). Each level describes the characteristics and capabilities of internal audit activities, starting from level 1, which is the initial (Nix et al, 2021).…”

“…According to Palmer (2023), the accountability theory is used to improve the quality of internal auditors in state financial management. Proportionality Theory is also a link in state financial management (Nix, 2021), where state financial management often places human resources who are less wise and competent in carrying out their duties so that they can cause state financial losses (Stroo, 2021), based on explanation before, this research aims to improve the quality of internal auditors and minimize abuse of authority.…”

AI in Energy: Overcoming Unforeseen Obstacles

“…Expeditiously, a tentative categorization of the challenges in Figure 2 will contribute to identifying key issues and prioritizing solutions based on their relevance to each category, thereby enabling the development of more focused and effective strategies for AI integration in energy systems. The integration of AI into the energy sector is associated with valuable lessons of success and failure, which primarily depend on data accuracy, algorithm selection, project management, integration with existing systems, monitoring and evaluation, stakeholder buy-in, expertise, budget, and resources, realistic expectations, and considerations of the ethical and social implications [19][20][21][22]. The visualization of the challenges' categories and factors with their interrelations and flow of variables is shown in Figures 3 and 4, which highlight the relationships among the main categories and their corresponding subcategories.…”