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Managing in Troubled Times Case Study
Case Title:
Nortel Networks: The Canadian Telecommunications Equipment Giant's Accounting Controversies
Publication Year : 2005
Authors: Souvik Dhar, Srinath Manda
Industry: Telecommunications Equipment
Region: Canada
Case Code: TRT0041
Teaching Note: Not Available
Structured Assignment: Not Available
OR
Abstract:
The management of Canada-based Nortel Networks Corporation, one of the largest telecommunications equipment companies in the world, was forced to restructure due to the Internet bubble bursting. However when it appeared that the company was able to come out of the downturn in its business by 2003, disaster struck the company again in early 2004, when it announced that it would be re-stating its financial statements for the years 1998 to 2003.
Pedagogical Objectives:
- To discuss the reasons behind re-statements of financials between the years 1998 and 2003
- To highlight the impact of accounting controversies on the Nortel's future growth prospects.
Keywords : Nortel Networks Corporation; Accounting mis-statements; Financial re-statement; Telecommunications equipment maker; John Roth; Frank Dunn; Managing in Troubled Times Case Study; Controversial bonus plan; Return to profitability; William A ‘Bill’ Owens; Chief of ethics; Audit Committee of the Board of Directors; Bell Telephone Canada; Public and private telecom networks; Regulatory investigations; Securities and Exchange Commission (SEC)
