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Case Study : Ethics Applied

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Abstract Throughout this paper the principles and concepts examined throughout the last eight weeks of coursework will be applied to the Nortel Case Study. After a brief introductory discussion of the Nortel Case, a greater understanding of the ethical ramifications of the situation will be facilitated by answering five key questions. Nortel Case Study: Ethics Applied
Introduction:
Over the last two decades the business world has been rocked by several prominent business scandals such as Enron, WorldCom and Goldman Sachs. Business scandals are not some new phenomena; but with the increasingly global nature of business and industry the economic fall out of ethical lapses or illegal activity have the potential to become global in scale. …show more content…

The corporate culture and structure of the company contributed to the ethical lapses by the company’s CEO John Roth and its eventual financial collapse. This paper will examine the Nortel Networks scandal through the lens of the business practices discussed in the text which contribute to creating an ethical workplace.
Part One The telecommunications bubble of the 1990s was an opportunity for the organization to grow and diversify based on investor expectations as well as the personal vision of CEO John Roth. When Roth came to the helm of the company, he communicated to employees that the company would be changing direction and focusing on internet technology (Collins, 2012). This authoritarian decision by Roth represented a drastic change in direction and focus for the company. During his tenure as CEO, Nortel actively searched out internet technology companies to purchase and over the course of less than three years the company acquired 18 other companies, which cost a total of $33 billion (Collins, 2012). Internal and external pressures pushed the company to grow exponentially as well as to continue to report higher earnings. The media savvy Roth utilized the media as just another “promotional channel” for the company (Collins, 2012, p. 539). The corporate culture was heavily influenced by the company’s compensation strategy which was based “heavily on stock

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