...Our case study discusses the rise and fall of one of the largest telecommunications corporations in the world, Nortel Networks Corporation. Nortel was one of the many early 21st century telecommunications companies that failed due to upper echelon management, a dysfunctional board of directors, inflated costs and earnings, and a smoke and mirrors illusion of stability. There were many avenues that could have been taken that would have prevented the demise and fall of the organization, but those roads were not traveled. Many argue that government intervention could have prevented the backlash and whitewater effect of Nortel’s bankruptcy, but due to corporate ties within the government and the Securities and Exchange Commission the many CEO’s continued to elude the government auditors and the stakeholders. From an ethical perspective, there were several factors that contributed to the rise and fall of Nortel. The initial CEO and founder of Nortel, John Roth, demonstrated altruistic behavior because he did want the company to profit, the investors to profit, as well as their primary stackholders. Nortel’s fall from grace came swiftly and on many fronts. Its market capitalization climbed to an all-time high of $398 billion in September 2000. Two years later, in August 2002, the amount had plunged to just $5 billion (Collins, 2011, pg. 536). In 2000, Nortel was Canada’s largest producing company and employed 93,000 people worldwide. Their research and development team was renowned...
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...spokesperson told Canadian Business that Bradlow "immediately apologized unreservedly" for his remarks, but the damage was done. RIM has fallen so far that not even its carrier partners can resist making jokes at its expense. And RIM keeps giving its detractors more fodder. On June 28, the company announced an incredibly bleak set of earnings, including its first quarterly loss in more than seven years. BlackBerry shipments plunged 41% from the year before. Nearly one-third of its workforce-5,000 employees-will be laid off. CEO Thorsten Heins delivered one more bombshell, too: BlackBerry 10, the operating system that will supposedly revive the company, will be delayed yet again, until early 2013. RlM has experienced an incredible and bewildering fall from grace. The company's share price provides the most visceral evidence: it peaked in 2008 at $149.90, and has since crashed by 95%, dropping to less than $8 at press time. There is no doubt that a series of poor decisions and missed opportunities led RIM to this point. Former co-CEOs Mike Lazaridis and Jim Balsillie underestimated the significance of the iPhone when it debuted in...
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...Extended Case Study 6 The rise and fall of Marconi Background There can be few who are not aware of the spectacular crash of Marconi, which, in the space of two years, went from a share value of £12.50 to under 2p, a stock market valuation of £35bn to just a few million pounds, and a profit of £750m to a loss of some £5.6bn, one of the biggest in UK corporate history. Marconi grew out of GEC, the giant industrial conglomerate built by Arnold Weinstock. In a period when the UK’s industrial competitiveness, and its base, declined, GEC was one of the UK’s leading and most successful industrial enterprises. Weinstock, who died in 2002 at the age of 77, created GEC and was the UK’s leading industrialist for over 30 years. Weinstock graduated from the London School of Economics in 1944. He worked for the admiralty for three years before moving into property development. In 1954, he joined his father-in-law’s firm, Radio and Allied Industries, where he built a strong reputation for his managerial abilities. In 1961, the firm made a reverse takeover of the larger but struggling GEC. Weinstock became GEC’s Managing Director, a post he held for over 30 years until he retired in 1996. In his period as Managing Director, he turned GEC into one of the great British success stories, through a combination of acquisition and organic growth. In 1961, GEC took over AEI, and in 1968 they bought English Electric, the owners of Marconi. GEC’s acquisitions continued into the 1970s and...
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...Cisco Systems [pic] Networking the Internet Revolution Brandi Martin brandi@ucsc.edu Table of Contents Paper Objective Section 1: The Network Equipment Industry A. Industry Profile B. Competitive Strategies within the Industry C. Porter Model Evaluation of Industry Forces D. Globalization of the Industry E. Importance of Information Technology to the Industry Section II: Company Perspective: An Analysis of Cisco Systems A. Cisco Company Profile B. Market and Financial Performance C. The Competitive Strategy D. Significance of Information Technologies E. Strengths and Weaknesses of Cisco Section III: A. Strategic Option Generator B. Roles, Roles and Relationships C. Redefine/Define D. Significance of Telecommunications E. Success Factor Profile Section IV: A Final Analysis of the Success of Cisco Systems A. Success of Business Strategy and Information Technology Use to Date B. The Effective Position of Cisco for the Future Objective of Paper The purpose of this paper is to provide an analysis of Cisco System’s primary business strategies and its utilization of information technologies to achieve a competitive advantage in the network equipment industry. The paper is divided into four sections, starting with a broad industry analysis, then narrowing to concentrate on Cisco Systems Inc., followed...
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...The Ethics Thing: Why It Matters More in Hard Times and Why It’s So Hard to Do What Makes Good and Smart People Do Dumb and Unethical Things? Professor Marianne M. Jennings W.P. Carey School of Business Ethical Lapses • • • • • • • • • • • • • • • • • • • • • • Student loan lenders: Sallie Mae and 17 universities Adelphia Boeing Cendant Computer Associates Tyco International T I t ti l General Electric Global Crossing Merrill Lynch Enron Qwest WorldCom Royal Shell Nortel Krispy Kreme Refco UnitedHealth Group Merck Chiquita World Bank BP Madoff Investment Securities • • • • • • • • • • • • • • • • • • • • • • • • • • • AT&T Titan Xerox Kmart Citigroup Lucent ImClone Arthur Andersen HealthSouth Royal Ahold Parmalat Apollo Group Marsh & McLennan AIG (twice)(Putnam)(Mercer) Fannie Mae (twice) KPMG (twice) GM Options scandals (200 companies) HP Universities and travel Siemens Countrywide Financial Société General Milberg Weiss Bear Stearns Satyam (India) Stanford Investments Jennings 1 Government Issues • • • • • • • • • • • • • • • • • • • • • • • • • • • • Illinois – Gov. Ryan Illinois – Blago Baltimore’s mayor Detroit’s mayor – Kwame Kilpatrick San Diego -- $1.1 billion pension fund deficit; skimming to meet city budget Connecticut – Gov. Rowland Chicago – Mayor’s office and contracts Embezzlement – BLM E b l t Former Delay aides and guilty pleas Abramoff Duke Cunningham -- $2.4 million from defense contractors State crime labs and scandals Tom DeLay Clark...
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...CASE : Solectron: From Contract Manufacturer to Global Supply Chain Integrator Most people think we're a manufacturing company. We're good at manufacturing, but we're really a service com In mid-2001, Solectron Corporation was con fronting issues that it had never before faced in its twenty-four year history. The company was the world's premier supply chain integrator, with pany. 1Bill Roberts, "CEO of the Year Koichi Nishimura, Contract rate with automo- tishi, and own sup e-market non pro- 3S, thee us supply :omaker's respond ;hallenge ;tandards lustry will 3.Y to their • Covisint ation and example s.ln 1999, 1ce to pro lSferred to that is, the ast. Unlike more than He market hangs and th benefits ms should rm has the decisions mce, tech- categories ·ocurement rate with automo- tishi, and own sup e-market non pro- 3S, thee us supply :omaker's respond ;hallenge ;tandards lustry will 3.Y to their • Covisint ation and example s.ln 1999, 1ce to pro lSferred to that is, the ast. Unlike more than He market hangs and th benefits ms should rm has the decisions mce, tech- categories ·ocurement CHAPTER 9: PROCUREMENT AND OUTSOURCING STRATEGIES 305 CHAPTER 9: PROCUREMENT AND OUTSOURCING STRATEGIES 305 -Koichi Nishimura, Solectron CE01 Manufacturing Visionary," Electronic Business, December 1999. 306 DESIGNING AND MANAGING THE SUPPLY CHAIN 306 DESIGNING AND MANAGING THE SUPPLY...
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...Scott, Financial Accounting Theory, 6th Edition Instructor’s Manual Chapter 2 Suggested Solutions to Questions and Problems 1. P.V. Ltd. Income Statement for Year 2 Accretion of discount (10% × 286.36) $28.64 P.V. Ltd. Balance Sheet As at Time 2 Financial Asset Cash $315.00 Shareholders’ Equity Opening balance Net income Capital Asset Present value 0.00 $315.00 $315.00 $286.36 28.64 Note that cash includes interest at 10% on opening cash balance of $150. 2. Suppose that P.V. Ltd. paid a dividend of $10 at the end of year 1 (any portion of year 1 net income would do). Then, its year 2 opening net assets are $276.36, and net income would be: P.V. Ltd. Income Statement For Year 2 Accretion of discount (10% × 276.36) $27.64 Copyright © 2012 Pearson Canada Inc 11 Scott, Financial Accounting Theory, 6th Edition Instructor’s Manual P.V.’s balance sheet at time 2 would be: P.V. Ltd. Balance Sheet As at Time 2 Financial Asset Cash: (140 + 14 + 150) $304.00 Chapter 2 Shareholders’ Equity Opening balance: $276.36 (286.36 - 10.00 dividend) Capital Asset, at Present value 0.00 $304.00 $304.00 Net income 27.64 Thus, at time 2 the shareholders have: Cash from dividend Interest at 10% on cash dividend, for year 2 Value of firm per balance sheet $10.00 1.00 304.00 $315.00 This is the same value as that of the firm at time 2, assuming P.V. Ltd. paid no dividends (see Question 1). Consequently, the firm’s dividend policy does not matter to the shareholders...
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...balance. It also presents the leading U.S. imports and exports in terms of value along with the important partners. Design/methodology/approach- The author explains the balance of trade including the rise and fall of U.S. trade deficit using the analysis between different countries imports and exports. Research limitations/implications- The study is limited to analysis of imports, exports, trade surplus and deficit of U.S. trading. Originality/value- This paper will help to build up the understanding about the basic imports, exports and importance of balancing the trade cycle for a country. Keywords- Deficit, Import, Export, Surplus, Economy Introduction Every country has to follow a set of policies, methods and processes in order to perform imports and exports. A number of conflicts arise due to weak foreign trading policies by countries. It requires professional expertise to manage the trade of a country. There are also a number of conflicts generated between the different countries related to financial decisions of countries. To eliminate the risk involved in financial issues a system of principles, procedures, policies, responsibilities, accountabilities are used by stakeholders. Many of the famous financial scandals are noted in the history occurring at Parmalat, Nortel, and Enron. It has cost a lot of drop in the market, huge loss of saving, loss of jobs and decrease in taxes. The financial scandals have made corporations to learn and practice new methods. The imports...
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...Mergers and acquisitions 1 Mergers and acquisitions The phrase mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling and combining of different companies that can aid, finance, or help a growing company in a given industry grow rapidly without having to create another business entity. In the most simplest way, Merger can be defined as how a "Marriage" is whereas an Acquisition is referred to as an "Adoption" of a child Acquisition An acquisition, also known as a takeover or a buyout, is the buying of one company (the ‘target’) by another. Consolidation is when two companies combine together to form a new company altogether. An acquisition may be private or public, depending on whether the acquiree or merging company is or isn't listed in public markets. An acquisition may be friendly or hostile. Whether a purchase is perceived as a friendly or hostile depends on how it is communicated to and received by the target company's board of directors, employees and shareholders. It is quite normal though for M&A deal communications to take place in a so called 'confidentiality bubble' whereby information flows are restricted due to confidentiality agreements (Harwood, 2005). In the case of a friendly transaction, the companies cooperate in negotiations; in the case of a hostile deal, the takeover target is unwilling to be bought or the target's board has no prior knowledge of...
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...This case study provides a glimpse at Research in Motion’s (RIM’s) entry into the Chinese market during a time when many distractions—principally a patent dispute with NTP—occupied management’s attention. Norm Lo had been in charge of the Asia Pacific region for eight months, though he had been with RIM for five years. Lo was successful in signing new partners throughout Asia, but China remained a difficult market to crack. One holdup was an impasse with regard to RIM’s use of encryption technology and the Chinese authorities’ desire to monitor e-mail traffic and content. Here the technical and political concerns were entangled. Even calling in Ontario Premier Dalton McGuinty to pay the Chinese federal authorities a visit (during a trade mission) provided no resolution. To further complicate things, the entirety of RIM had until recently been preoccupied with the legal settlement with NTP in the United States. There was much concern that NTP’s patent infringement claims could sink or substantially stymie RIM’s economic progress. Even as the NTP matters were settled, additional distracting infringement suits arose. Those holding patents thought they could get rich just by having a lawyer knock on RIM’s door. The study shadows Norm Lo trying to bring BlackBerry’s entry into mainland China to fruition. Should he “play hardball?” Is slow and steady going to do it? Is RIM getting walked all over in China, or is this what an outside firm should expect? Wishful...
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...FINANCIAL ACCOUNTING INFORMATION AND THE RELEVANCE/IRRELEVANCE ISSUE (Global Business & Economics Review Volume 5 No.2 December 2003 pp:140-175) Stanley C. W. Salvary, Canisius College ABSTRACT Some current research conclude that the numbers in financial statements are not relevant for three basic reasons. The numbers: (1) are not isomorphic with capital market values, (2) do not have a future orientation, and (3) are un-interpretable since they are based upon five different measurement attributes. The lack of isomorphism argument is invalid since actual current performance is not identical with the capital market expectations of future performance. The lack of a future orientation argument is invalid since financial statements capture what has happened and not what is expected to happen. Since a single measurement attribute is required to produce meaningful measures, the un-interpretability argument holds. A unique measurement attribute is identified in this paper to address this problem I. INTRODUCTION In Statement of Financial Accounting Concepts No. 1: Objectives of Financial Reporting by Business Enterprises (SFAC1) [1978], the Financial Accounting Standards Board (FASB) maintains that the function of financial accounting is to generate information useful to a group of users (investors and creditors) for decision-making. The focus on that specific function (decision-making) leads to a concern for predictive value, as opposed to feedback value, in financial statements...
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...Third Pass Value CHAPTER 7 PART 2 5 The Time Value of Money 6 Valuing Bonds 7 Valuing Stocks 7.1 Stocks and Stock Markets 7.2 Market Values, Book Values, and Liquidation Values 7.3 Valuing Common Stocks 7.4 Simplifying the Dividend Discount Model 7.5 Growth Stocks and Income Stocks 7.6 There Are No Free Lunches on Bay Street 7.7 Market Anomalies and Behavioural Finance 7.8 Summary 8 Net Present Value and Other Investment Criteria 9 Using Discounted Cash Flow Analysis to Make Investment Decisions 10 Project Analysis Valuing Stocks LEARNING OBJECTIVES After studying this chapter, you should be able to: LO1 LO2 LO3 LO4 LO5 Interpret stock trading information found on financial Web sites. Calculate the present value of a stock given forecasts of future dividends and future stock price. Use stock valuation formulas to infer the expected rate of return on a common stock. Interpret price-earnings ratios. Explain what professionals mean when they say that “there are no free lunches on Bay Street.” bre0089X_ch07_219-261.indd 219 31/01/12 11:32 AM Third Pass At the Toronto Stock Exchange and many other stock exchanges, all of the stock trading is done electronically, using computers. © James Leynse/Corbis. A corporation can raise cash to fund its investments by borrowing or by selling new shares of common stock to investors. If it borrows, it has a fixed obligation to repay the lender. If it issues shares, there is no fixed obligation, but the new...
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...CASE STUDY 129 BlackBerry in Red China: Research in Motion Navigates Institutional Barriers in an Emerging Market By Prescott C. Ensign Nicholas P. Robinson Research in Motion’s (RIM’s) entry into the Chinese market during a time when many distractions—principally a patent dispute with NTP—occupied management’s attention was not a foregone conclusion. China remained a difficult market to crack. One holdup was an impasse with regard to RIM’s use of encryption technology and the Chinese authorities’ desire to monitor e-mail traffic and content. Here the technical and political concerns were entangled. To further complicate things, the entirety of RIM had until recently been preoccupied with the legal settlement with NTP in the United States. Issues in this study highlight real-world dilemmas in a thriving firm. The founders are still in charge, and new markets present themselves regularly. A very real challenge is divided attentions. The standstill over market entry calls for integrative thinking—bringing together disparate and contradictory elements for resolution. RIM’s way out will invariably involve embracing complex relationships in order to find a resolution to the various conflicting institutional forces. © 2008 Wiley Periodicals, Inc. Correspondence to: Prescott C. Ensign, University of Ottawa, Telfer School of Management, 55 Laurier Avenue East, Ottawa ON, K1N 6N5, Canada, 613.562.5800 x4925 (phone), ensign@telfer.uOttawa.ca. Published online in Wiley InterScience...
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...Introduction A few very powerful providers control the mobile communications industry. The industry is forever evolving and changes can be dramatic. Just recently AT&T announced their plans to acquire T-Mobile, Google announced plans to purchase Motorola Mobility and new LTE technologies are making waves in the mobile data sector. Since these providers rely on advanced technologies only the most innovative and reliable networks survive. Verizon currently dominates the market and services 31.9% of American mobile users. The company was established in 2000 as a joint venture between Vodafone and Verizon Communications. One of the Verizon’s largest acquisitions was the purchase of Alltell Wireless in 2009 for $28.1 Billion; this purchase expanded their network coverage and increased their market share. Verizon operates a CDMA Radio network which does not require the use of SIM cards. The company’s service quality is a competitive advantage and Verizon invests about $5.7 Billion per year to expand and upgrade their network services. Verizon boasts “America’s largest and most reliable network” and has over 160.3 Million subscribers. They recently added the iPhone to their product line in early February which has allowed the company to take a significant portion of sales away from AT&T. Verizon is one of the most expensive networks and appeals to customers who are willing to pay a premium for advanced network technology. In other news the FCC has accused Verizon of...
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...SUMMARY The company needs to upgrade its computer equipment. There are two upgrade paths to consider. In this proposal, we demonstrate how equipment leases take advantage of the benefits of reduced depreciation and taxation, easy scalability, reduction of IT staff usage, reduced energy costs, and reduction of capital spending. The company can free up money overall and maintain better control of the IT budget by leasing. The cost of equipment is spread out over a 3-year period by leasing. There are no disposal fees because the leasing company will be responsible for the equipment leased. By replacing the current sever setup ( the company has over a dozen machines running 24 hours every day), with new leased IBM compact server, we will cut power costs by up to 50%. CONTENTS Summary 2 Introduction 4 Discussion 4 Requirements Scope and Background 4 requirements to be achieved: 4 several leasing and finance companies with the best solutions for the company 4 Salary Expense Before Leasing fig 1 5 Salary Expense After Leasing fig 2 5 Leasing and Financing Programs 7 Leasing and Financing fig3 7 benefits of hiring a leasing company: 8 Conclusion 9 Bibliography 10 Appendix A 11 INTRODUCTION This report explores the methods other companies use to conserve working capital. The recommendation is to lease to keep the company at the forefront of the technology curve, and keep working capital free. The company will also have the option to upgrade...
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