“Conspiracy of fools” book report 1. Discuss how the top leadership, specifically Ken Lay, Jeff Skilling, and Andy Fastow, contributed to the collapse of Enron. The executive leadership was the main cause for Enron’s collapse. Their dishonesty, greedy and selfishness made them do things that changed Corporate America forever. Kay Lay was the CEO for many years.
I agree with you that this rule may have reduced the likelihood of this fraud. According to the case, the conspiracy began in 2000, shortly after Ebbers' bank started calling in his personal loans because of the company's falling stock price. He faced the decision to either lie or admit WorldCom financial position. Ebber’s borrowings from the Company and his loans tie with the company’s stock performance put him under pressure to ensure that WorldCom stock price does not decline further. He began falsifying the books to give the impression that WorldCom was doing well.
Abstract The problem to be investigated is looking into shades of gray and how it is applicable to ethical behavior. For many years, corporations, both large and small, operate their day to day business practices within the guidelines as established by the laws written by society but yet, still manage to display very questionable behavior. Companies such as Goldman and Sachs were found to be utilizing questionable trading practices so as to increase their financial profits while at the same time leaving many companies behind in ruin and eliminating thousands of jobs in the process. Ethics is more than doing what’s right or wrong, it is a way for balancing the system so that all businesses have the same opportunity. Actions constituting a Shade of Gray.
Recently, the market is on an uptake with its improving stocks & bonds. The light in a year-plus-long tunnel is bringing both hope and realization. The market improvement is also shedding a truth on a troubling facet of the economy, the 401(K). The realization Stephen Gandel, of “Time Magazine”, has highlighted in his article “Why It’s Time to Retire the 401(k)” focuses on the sad truth that 401(K) is not effective and thus can not be relied on. 401(K) has become ineffective because of the corruption of big business, the misunderstanding of and as a result a mishandling of the 401(K) accounts, and its correlating dependency on the market’s success.
As described in this case, MCI falsified its financial statements for many years. Walt Pavlo, who was in charge of accounts receivable for the company allowed to control the Accounts Receivable system because he was the creator and developer. The lack of segregation of duties took place at MCI because the same employee was able to receive payments, update accounts receivable records and/or reconcile the company’s bank account. In the case of Walt Pavlo, he felt extreme pressure from his superiors to meet revenue projections. The employees and executives of MCI similarly knew where the numbers needed to be in order to meet those projections.
1.a. Summary of the case identifying the key issues and its stakeholders Moody's, the oldest and more recently most profitable credit rating agency in the world, underwent strong criticisms for misjudging the inherent risks of complex, asset backed securities in an already flawed financial structure that inevitably helped fuel the 2008 global financial crisis. Instead of being arbiters of risk Moody's business model had over time adjusted itself to meet the needs of its market stakeholders; a colorful variety of hyper optimistic lenders, investors, bankers, issuers, governmental sponsored organizations, and Moody's stockholders and employees. Equally symptomatic to the defect financial structure were the influential non market stakeholders like the US government and its regulatory arms and oversight committees. Shorty after Moody's started rating asset based securities, especially subprime mortgages, they started defaulting and eventually were downgraded.
6, 2008. In an already tumultuous market the preferred stock of the two firms tumbled to below a dollar. September 2008 was the month that saw the fall of many financial institutions. Banks termed too big to fail. Lehman Brothers file bankruptcy, Merrill Lynch was bought out by Bank of America, and AIG, an insurance company that sold insurance to investment banks to cover the downturn of investments, was on the brink of financial distress along with so many other failing financial institutions.
United Airlines United Airlines, like many airlines struggled following the terrorist attacks on the World Trade Center on September 11, 2001. According to Isidore (2002), the airline was once the world's largest and most successful. But it was hit with a series of problems starting in 2000 that led it down the road to the bankruptcy filing. The carrier had not reported a quarterly profit since the second quarter of 2000. It lost $1.7 billion.
A.G. Lafley had very little time to determine how he would turn around Proctor & Gamble after Durk Jager’s departure. Prior to Jager’s resignation, he introduced an aggressive restructuring program, which was designed to generate bolder innovations and accelerate their global rollout in order to double the company’s sales, and annual earnings growth. Three interdependent global organizations were structured by product category, geography, and business process. The initial reactions to this reorganization were extremely bad. Because of poor results, and sagging employee confidence, Lafley was faced with the decision of returning to the previous organizational structure, or continue using Jager’s new plan.
Their everyday task were complicated by swooning stock prices and mass layoffs. 2. In what kinds of ways did these managers respond to these challenges- for example in the approaches to planning, leading, organizing and controlling? John Danahoe approach to the recession and its unique problems was “Remaining proactive & decisive.” (Jones 2011, p 34) Danahoe chose a plan that most of the company didn’t agree with. Employees and Investors were more open to a dramatic change in the short term then to the slow changes that eventually had other CEOs step down.