Is Nortel 's Failure Stemmed From People Or Capital Market Process?

1382 Words Dec 27th, 2015 null Page
A little more than a decade is all that it took for a major Canadian telecommunications player to enjoy success and experience total loss due to organization structure and leadership failures. Indications of their demise point to the establishment of a non-resilient culture that failed to listen to the most important people to any business organization, the customer. In this paper, we will look at the factors from an ethical point of view that contributed to the success and failure of Nortel. We will discuss what mechanisms should have been emplaced in order to facilitate meeting the needs and interests of Nortel’s shareholders. This paper will help the reader understand whether Nortel’s failure stemmed from people or capital market process. As Nortel is not the first major player to fall under similar circumstances, we will examine what Nortel has in common with other organizations that have met their demise due to unethical processes and decision making. At the height of their success in July 2000, Nortel was considered one of the largest firms in the world and would be considered a Mega cap as their market cap was in excess of $350 billion Canadian dollars (Fogarty, Magnan, &Markarian, 2009). Achieving this amount of success put Nortel well ahead of their competition on a global scale. The underlying issue with all of this success was a team of brilliant employees, managed by greedy and incompetent senior management who inflated profits and betrayed their…

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