Essay on The Rise And Fall Of Nortel
John Roth started working for Northern Telecom, in 1969 as a design engineer. Roth rose with the company and in 1997, he was offered the position of CEO of Northern Telecom. After reluctance, Roth accepted the role and decided to take the company in a new direction. Roth decided to invest in internet technology so “Roth went shopping for Web-tech companies, and, in May 1998, Nortel announced the purchase of San Francisco–based Bay Networks for US $9.1 billion in a share-for-share deal” (Collins, 2011). In September of 1998, Roth changed the company name to Nortel Networks, a name reflected the new changes. Over the next 30 months, Nortel Networks acquired 17 other companies for a mere $33 billion. Once the initial shock wore off, Roth quickly became a household name in the media. “Nortel was a boom business in the emerging dot-com era” (Amernic, 2006). Using strategic press releases, Roth created the persona that Nortel Networks was the place to invest and purchase stock. However, problems started to arise. Projections were not being met and in September 1998, stock prices started to fall eliminating $9.1 billion in market capital. “During Nortel’s stock price decline, executives at the telecommunications giant were constantly bombarded with accusations of unethical conduct” (Collins, 2011). With that, Nortel fell just as quickly as it rose, only leaving questions behind.
Factors that contributed to the rise and fall of Nortel
There are several…