Case Study Of Nortel

2228 Words5 Pages
bulb-icon

Recommended: The 5 principles of ethical leaders

Nortel was a telecommunications company in Canada that’s success was noticed by everyone world wide and many investors including a large role in the U.S. Nortel was the prime example of economic success in Canada and was praised for their stock exchange value compared to the other larger firms of the world. Their downfall was quicker than their rise that was led by a series of unwise acquisitions, scandal, fraud, greed and unethical business tactics hidden all from the public for too long. Multiple unethical business factors were described to be the result for Nortel’s downfall. Board Structure Nortel’s board structure is one of the factors that was said to have led to their failures. Stakeholders elect a board of director’s member and their sole job is to look out for the interests of the owners. It has always been advised to have an “Independent board of directors” that have no shares invested in the company as opposed to non-executive board members. Nortel’s board was independent but ran into issues with the number of people on their board, their financial knowledge of the company, and having too many responsibilities for each member. There had been 12 members on their board which compared to other firms was large. Having too many members on a board may cause disagreements of the company’s ethics. The more people in a room running a company may have many opinions and suggestions for which route the company should move to. All these members of an independent board are responsible in monitoring the finances of a firm. A member’s action sequence may motivate other board members in persuading them on the direction they want the firm to go. With so many people on a board laziness may take in effect and expect others to do the wor... ... middle of paper ... ...uct. Employees are sometimes faced with managers that are unethical and do not want to be categorized as a whistleblower so they stay quiet but they need to be reassured that there are ethical regulators looking out for them and the company. Prioritizing these decisions may help a company thrive and survive longer than the Nortel. This case study has been a prime example of our course and ways to prevent and a business from going under. We have learned from Nortel’s failure and others like Enron that ethical leadership and business practices are what make a company survive. Business ethics is the heart and soul of how a business is run and standing by the right principles encourages employees and the public you serve to follow along. Cheating your way to the top make quick and profitable but the result is after the long run is even quicker failure to the bottom.

Show More
Related

  • 1

    677 Words  | 2 Pages

    Ralph Nader, Mark Green and Joel Seligman, in an excerpt from Taming the Giant Corporation (1976, found in Honest Work by Ciulla, Martin and Solomon), take the current role of the company board of directors and suggest changes that should be made to make the board to be efficient. They claim the current makeup of the board does not necessarily do justice to the company because “in nearly every large American business…there exists a management autocracy” (Nader, Green and Seligman, 1976, p.570). The main resolution they present is to make the board more democratic with the betterment of the company as its first priority. Currently the board no longer oversees operations, or elects top company executives and they are no longer involved in the business operations to the extent they should be. Nadar, Green and Seligman argue that that all of these things need to be changed. For a corporation so large to be successful there must be separation of powers just as there is in any current government system ( p.571). They claim this is the only and best way to success (Nader, Green and Seligman, 1976, p.570-571).

    Read More

  • Analysis Of The NASW Code Of Ethics

    700 Words  | 2 Pages

    Many organizations have been destroyed or heavily damaged financially and took a hit in terms of reputation, for example, Enron. The word Ethics is derived from a Greek word called Ethos, meaning “The character or values particular to a specific person, people, culture or movement” (The American Heritage Dictionary, 2007, p. 295). Ethics has always played and will continue to play a huge role within the corporate world. Ethics is one of the important topics that are debated at lengths without reaching a conclusion, since there isn’t a right or wrong answer. It’s basically depends on how each individual perceives a particular situation. Over the past few years we have seen very poor unethical business practices by companies like Enron, which has affected many stakeholders. Poor unethical practices affect the society in many ways; employees lose their job, investors lose their money, and the country’s economy gets affected. This leads to people start losing confidence in the economy and the organizations that are being run by the so-called “educated” top executives that had one goal in their minds, personal gain. When Enron entered the scene in the mid-1980s, it was little more than a stodgy energy distribution system. Ten years later, it was a multi-billion dollar corporation, considered the poster child of the “new economy” for its willingness to use technology and the Internet in managing energy. Fifteen years later, the company is filing for bankruptcy on the heels of a massive financial collapse, likely the largest in corporate America’s history. As this paper is being written, the scope of Enron collapse is still being researched, poked and prodded. It will take years to determine what, exactly; the impact of the demise of this energy giant will be both on the industry and the

    Read More

  • Reactionary Essay To If Aristotle Ran General Motors, By Tom Morris

    1257 Words  | 3 Pages

    It's difficult not to be cynical about how “big business” treats the subject of ethics in today's world. In many corporations, where the only important value is the bottom line, most executives merely give lip service to living and operating their corporations ethically.

    Read More

  • Case Analysis Of Hollate Manufacturing

    721 Words  | 2 Pages

    Although Hollate introduced a compliance program and code of conduct when it went public, the programs were put on “the back burner”. This outcome is not surprised for that the company does not pay attention to the programs. It is, therefore, important to “reinforce the values” and “employee a boundary system when actions are inconsistent with the code of conduct” for the purpose of early detection. Tyco provides a good example after its scandal, by initiating “mandatory annual compliance training for all its employees worldwide” and creating the Tyco Guide to Ethical Conduct to familiarize employees with company expectations and help them make ethical decisions. As tips is the most useful method for internal and external sources to detect frauds, the whistleblower hotline should be well communicated with encouragement on reporting any suspicious activity. In addition, to improve the effectiveness of the compliance program and code of conducts, Hollate should implement management monitoring and evaluation on a regular

    Read More

  • Key Stakeholders Investment in British Airways

    672 Words  | 2 Pages

    Each party plays his parts – Role of key players like owners, Board of directors and staffs

    Read More

  • Sardar Biglari: Recommendation Shareholders Of Cracker Barrel

    808 Words  | 2 Pages

    Biglari, as the largest single shareholder, has the right to test resolves and examine the fiduciary duty of the board. Challenges he brought up have made the board take changes. Although alarming effect of his actions, shareholders should not vote in favor of Biglari. First, current directors’ working relationship and balance might be jeopardized. There is no doubt that the board has done a satisfying job making CB survive the recession and continuing to grow. The integrity of CB’s board must

    Read More

  • Board Diversity Essay

    2004 Words  | 5 Pages

    “The financial crisis and various corporate scandals have caused widespread concern over the way corporations are governed and their responsibilities to stakeholders.” Regulators and academics have emphasised the importance of board diversity in improving the strategic and monitoring role of the board, and preventing further business failures. The discussion has recently concentrated on the poor representation of female members at board level, which seems to be a common problem in most countries, including the United Kingdom. It has been suggested that women can provide boards with “unique qualities and resources that can improve board dynamics, strategic decision-making and firm performance.

    Read More

  • Worldcom Case Study

    1575 Words  | 4 Pages

    In modern day business, there can be so many pressures that can cause managers to commit fraud, even though it often starts as just a little bit at first, but will spiral out of control with time. In the case of WorldCom, there were several pressures that led executives and managers to “cook the books.” Much of WorldCom’s initial growth and success was due to acquisitions. Over time, WorldCom discovered that there were no more opportunities for growth through acquisitions when the U.S. Department of Justice disallowed the acquisition of Sprint.

    Read More

  • Byte Products, Inc.

    1032 Words  | 3 Pages

    The Board of Directors is consisted of 11 members: James M. Elliot, the Chairman of the Board, 3 inside members and 7 outside members. The economy is stable and profitable, but that also means a lot of competition in the market. This poses a great opportunity for the company to grow and gain more of the market share. The only foreseeable real threat that the company will face is new competitors in the market.

    Read More

  • Boardroom Diversity In Corporate Governance

    1433 Words  | 3 Pages

    The debate whether diversity is beneficial to corporate governance or not has persisted over the years. In this context, the concept of diversity relates to boardroom composition and the wide-ranging blend of characteristics, expertise, and attributes supplied by individual board members (Grosvold, Brammer and Rayton, 2007, p. 344). What is more, diversity in corporate boards of directors can assume a variety of forms, counting individual demographics such as, nationality, race, ethnicity, and gender (Singh, Terjesen, and Vinnicombe, 2008, p.48). Boardroom diversity in listed companies is dictated by an array of diverse factors, including profitability, company size, as well as the size of the board (the number of non-executive and executive directors) (Grosvold, Brammer and Rayton, 2007, p.346). In listed companies, the board of directors usually serves at least four significant roles i.e. controlling as well as monitoring managers, providing counsel and information to managers, ensuring conformity with relevant laws as well as regulations, plus connecting the corporation to the external business environment (Carter et al. 2010, p.398).

    Read More

  • Toyota's Ethical Issues

    1423 Words  | 3 Pages

    Treviño, L. K., & Nelson, K. A. (2007). Managing business ethics: Straight talk about how to do it right Fourth ed., Retrieved on July 30, 2010 from www.ecampus.phoenix.edu

    Read More

  • Bank Failure In Jamaica Case Study

    1262 Words  | 3 Pages

    Organizations that only have top management as the board members are more susceptible to accounting malpractices. Members of the board should preferably own shares in the company to ensure diligence when it comes to the interests of the company. Apart from the Board of Governors, there should also be an audit committee in place to oversee the financial dealings of the bank. Members of the board and the audit committee should have basic financial knowledge. Some of the members should also be experts in finances so that they can detect any anomaly that may take place in terms of financial reporting. An overhaul of the regulatory framework is required to empower authorities to intervene immediately, and make improvements. New technology is required. Manual antiquated processes should be eliminated because this causes greater human error and poor

    Read More

  • Board of Directors Remuneration

    1406 Words  | 3 Pages

    The board membership, irrespective of executive or non executive membership, is very crucial in the governance and management of the company. However, as the duties and responsibilities of directors vary according to their type of directorship; the rewards should also match the responsibilities carried out and be in line with the performance shown over period of time.

    Read More

  • Directors In A Company Case Study

    2322 Words  | 5 Pages

    In the present case, the company (LP) has six individuals on the board of directors (Andy, Brian, Chris, David, Evan and Faith). All these directors, particularly Andy, felt that it would be prudent to restructure

    Read More

  • Ernst and Young

    2394 Words  | 5 Pages

    The role of the board: unlocking the potential. (n.d.). (DRAFT). Retrieved December 8, 2013, from http://www.ey.com/US/en/Services/Strategic-Growth-Markets/Strategic-Growth-Forum-Agenda-EVTD-USDD-97KR7Z?CMPNID=SGF2013_US_Insights_Audit_Committee_Track1_Board_Recap

    Read More

More about Case Study Of Nortel

Open Document