When comprehensive research was conduced it made it

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When comprehensive research was conduced it made it obvious that there were significant financial disparities that were taking place in the accounting books of the company for tax avoidance that was in direct violation of the interests of their major investors. The managers, accountants and the directors were practicing their duties based on the theories of rationality, however, it was important that instead of the business practices that provided personal gains the management must have focused on an ethical code of conduct for the best interests of Nortel cooperation and that of the primary stakeholders . Hence, ethical practices and focusing on Social Responsible Investment is the best mechanism that could benefit the interests of managers and shareholders together and work towards the long-term survival of the company (Kumar, 2010). Another important mechanism is the implementation of a compensation package that match the industrial requirements and also the organization must adopt the practice of analyzing
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NORTEL CASE STUDY 7 the external markets when designing the allowances and compensation packages of an organization. It is integral that accountants observe the GAAP principles when they present the financial record and enter in the accounting books. This way the financial disparities and irregularities will be reduced that reduce the credibility and performance of the company (Tyson, 2014). It was important that the company must have implemented UN Global Compact Principles in order to focus on labor laws and anti-corruption within the company. Would you describe the meltdown of Nortel more as a failure of “people” or “capital market processes”? I will attribute the decline of the company more as a failure of the people of the company rather than the capital market process. The records state that the meltdown of the company started in 2002 as the company started neglecting the interests of their secondary stakeholders . During this time period, the global market was also undergoing financial crisis and decline in economies and even though Nortel cooperation did witness decline during the time of financial crisis, the financial crisis was not the prime reason for the decline of the company as the company was already facing decline before the recession period. Even still, the impact of the financial crisis cannot be neglected as it impacted every organization in the world as the share price of the company declined drastically from CAN$ 200 to CAN$ 0.68 which eventually resulted in the devaluation of the company shares and dilution of the assets of Nortel cooperation (Fogarty, 2008). It is deemed important that the top managers must have focused on the idea of Gospel of Wealth and instead of demanding higher compensation at critical time, should have focused on prosperity and progress of the organization.
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NORTEL CASE STUDY 8 If we notice properly, the fall of the telecommunication giant is mainly the failure of people that were employed within the company who were the primary stakeholders and were themselves involved in financial forgery acts and unethical practices within the company. These
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