Brief History of the Company Strip away the outer covering of Valeant Pharmaceuticals and find a business enterprise that started its profit-making in the decade of the 1960s. One can argue that it started as an obscure organization focused on understanding the business side of the specialty chemical research enterprise. However, the company started to gain global attention at the turn of the 21st century when its corporate leaders initiated a series of mergers and acquisitions. In the present time, the said pharmaceutical company sells a variety of drugs, such as over the counter medication and prescription drugs. The company’s radical assent into the top of Wall Street’s list of the favorable company started in earnest when it hired Michael Pearson as the new CEO of Valeant Pharmaceuticals. He orchestrated a series of major mergers and acquisitions that required the use of billions of dollars in resource allocation to take control Continue reading
Business Ethics Case Studies
Case Study on Business Ethics: Olympus Corporation Financial Statement Fraud
Olympus is a Japanese company that specializes in medical imaging tools and photo/video cameras. Back in the 1980s, when the operating income of the company decreased due to the sharp appreciation of the yen, the Olympus executives started an aggressive financial assets management in order to shift losses off the company’s balance sheet. As a result, Olympus has managed to hide $1.7 billion of investment losses for more than a decade. The case of Olympus is the example of the financial statement fraud in which an employee intentionally causes a misstatement or omission of material information in the organization’s financial reports that eventually results in median loss of $1 million. To conceal the losses, the company has developed a tobashi scheme in which they booked the company’s assets at historical cost instead of fair market value. In 1997, the Japanese legislation was reformed, and since then all the assets should Continue reading
Case Study: The Story Behind the Olympus Scandal
In the 1980s, several Japanese corporations experienced financial challenges as they depended on investments to boost their declining profits. One of the main reasons was that the country’s export had been damaged by the strength of its currency against other currencies, especially the US Dollar. Olympus became one of the number one victims of Japan’s economic situation. Because the company was struggling with its business operations, it decided to use a Japanese concept known as zaitech, which refers to financial engineering in salvaging the situation. Consequently, the company decided to invest in risky businesses and financial derivatives in order to boost its profits. Nevertheless, the business ventures caused huge losses of about 2.1 billion Yen in the early 1990s. It is during that time when the management of the Olympus devised ways of concealing the huge losses from the published financial reports. Although it has been able to hide the Continue reading
Case Study: The Downfall of Nissan’s Carlos Ghosn
Financial dishonesty and misconduct pose significant threats to any business. Carlos Ghosn, an influential top manager and ex-CEO of Nissan, was arrested because of financial misconduct in Japan in 2018. The scandalous news led to a panic on the stock exchange, and Nissan’s shares crashed rapidly, which also affected other automobile companies. Today, the company prepares for difficult times and reputational losses, which can no longer be avoided, even if the most serious accusations are not confirmed. Currently, Ghosn has already been interrogated by the police, and an investigation against him is underway. The 64-year-old top manager was accused of financial misbehavior, using his position. To do this, he deliberately distorted the data on the amount of his remuneration, which he received from the Alliance brands, such as Nissan, Renault, and Mitsubishi. Ghosn was also criticized that for 20 years of working with the Alliance, he received almost unlimited power, Continue reading
Case Study on Business Ethics: The Bribery Scandal at Siemens AG
Siemens AG is a German company with a long history of success and a good reputation in the technology industry. It is also one of Europe’s largest technology firms with a revenue base of over $77 billion. In addition, the company has over 430,000 employees. However, the reputation that Siemens has built for several years was brought into question in 2006 after being caught engaged in a series of corruption scandals. In the first incidence, Siemens was caught having bribed foreign officials in a bid to win contracts and create a slush fund. In another case, Siemens was alleged to have bribed the officials of the labor representatives of the supervisory board in a bid to win their support over the policies that Siemens intended to implement. Immediately after the whistle had been blown on the scandal, a team of investigators was appointed which immediately raided Siemens’ offices in Germany Continue reading
Case Study on Business Ethics: Accounting Fraud at Nortel Networks Corporation
For more than 10 decades, Nortel is engaged in the supply of telecommunications equipment for Canada’s telephone systems. In the 1890s, the company started manufacturing manually, operated switchboards, which have later turned into establishing the fiber-optic systems for the Internet today. Nortel Networks Corporation is having its headquarters in Brampton, Ontario, Canada was considered as one of the leaders of the telecommunications industry during the late 1990s. About three-fourths of the Internet traffic of North America was transacted through Nortel equipment. Nortel had around 73,000 employees around the world. The company’s share was listed on both at the “Stock Exchanges” of Canada and New York. Nortel had a market capitalization at a peak price of C$ 124.5O and had over 3.8 billion shares worth C$473.1 billion as of July 2000. Nortel accounted for over thirty percent of the value of the S & P / TSE 300 Composite index. Nortel has been Continue reading