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Nortel Failure Essay

1820 Words8 Pages

The Success and Failure of Nortel
Aiessa Holland
5518635
Management Ethics
MGMT 314 D003 Win 17
April 30, 2017 Abstract This paper explores the subject of the business success and failures of Nortel covered in the case study, Nortel: The Rise and Fall of a Telecommunications Company. This paper summarizes the failures of Nortel using keywords found in Denis Collins, Business Ethics: How to Manage Ethical Organizations. It is important to state that this paper emphasizes the failures of Nortel based upon their ethical practices and inability to uphold successful business practices and leadership. Mentioned in this paper are suggestions of how the company failed and mentions of how they could have implemented practical business behaviors …show more content…

Many consider these failings to be at the hand of CEO John Roth. Roth did not seem to use successful business tools to make decisions. One tool he could have utilized is rational ethical decision making which describes an employee’s concept of what is considered ethical. (Collins, 2012) Upon taking over the organization, Roth’s first tasking was to grow the business by expanding into the internet business. Roth used propaganda to present an altered idea to the public of the organization. The organization brought in use of fiber optic equipment that was highly praised by others in the market. This new product drove share prices though the organization failed to generate annual profits. This occurred because of market satiety, a result of Roth’s public falsehood of how well the fiber optic equipment was doing. (Collins, 2012) It appears there was immense praise from other networks and the media that analysts anticipated stock price growth. This falsehood and these unethical behaviors led to the downfall of Nortel. The company did not live up to the expectations investors projected. Roth put out false financial statements that did not contain proper financial standing of Nortel. (Collins, 2012) Management’s actions drove the stock prices down dramatically and investors lost large amounts of their investments. Thus, most investors withdrew their investments leaving the organization practically bankrupt. The company eventually liquidated in 2009 when they fell under. (Collins,

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