Case Study Analysis on Nortel



Case Study Analysis on Nortel

Introduction

The primary aim of this paper is to conduct a detailed analysis of the Nortel Networks Corporation, which was used to be a key market player during times of boom in the telecommunication industry in 1999. This case takes into account the rise and fall of the company in 21st century. The researcher would take into account the four main contributors to the fall of organization, which are structure of governance at a grand level, compensation allowance given to executives, structure of ownership or board, and mismanagement of income. The research paper also focuses upon adequate level of mechanism to match the interest of management to that of shareholders. In addition,

Rise and Fall of Nortel

The Nortel Corporation enjoyed success in 2009 at its peak and had a market capitalization of about $350 billion and had a market share of 37% on stock exchange and also considered as one of the largest firms in worldwide. The corporation largely focused upon telecommunication sector and strived to work and grow in the field of wireless and band means of communication. Therefore, it gained competitive advantage in wireless and broadband product segmentation besides being a new player in market. It became one of its strengths. The company successfully expanded its operations y optimizing and utilizing its acquisition strategy and it successfully bet North America. At this point the company achieved its sustainable growth as a result of implementation and initiatives of Research and development department's expenses that assisted company in making huge continuous earnings. Rippled As a result, the share price of the company also tripled in a period of four years. The company reached at peak of its success and its share price became 200 Canadian dollars. The main contributors to company's enormous profits are acquisition strategy, growth and research in growing telecommunication industry, and deregulation of market. This is the reason why company made huge profits as compare to its pro form statements in the five year time period.

With respect to ethical perspective, the rise of company was very much dependent upon its strong base or foundation, which include clear objectives, mission and vision statement. In addition, company highlighted an communicated simple and straight forward strategies and plans to assist stakeholders in implementing their measures accordingly. It has been academically studied and observed practically that growth and good performance of the company play a major role in motivating stakeholders from ethical point of view; because, stakeholders are highly interested in knowing about financial health, future plans and current operations of the company in the market to plan their next move. This ethical principle is applied and implemented by many large and successful corporations in history and present.

The four ethical factors that have been identified in the given case of Nortel Corporation are governance structure, executive compensation, earning management and owner ship structure. These are considered as the ideal ethical factors for gauging company's performance from ethics point of ...