They failed to inspire a strong sense of leadership and ethical behavior. The executive management team exposed themselves and their shareholders to enormous financial risk during the
Because of this people could not get into their bank account, or even receive a paycheck. “Banking panic arises when many depositors lose confidence in the solvency of banks…”. (Romer, Christina. "." .
| The Hollinger Chronicles | Case 3-10 | | | | | Case 3-10 Case 3-10 is about a company named Hollinger, Inc., and the numerous fraudulent acts they committed. Corporate governance was almost nonexistent at Hollinger. Management was only looking out for themselves. They felt no sense of responsibility or duty of care towards their shareholders, and no loyalty towards the company that they worked for. Almost all of the upper level management at the company was shirking their duties at the company in more than one way.
The Great Depression was caused by the stock market crash. The stock market crashed on October 29th, 1929 at the New York Stock Exchange in New York, USA (Morton, 209). It happened in the United States of America but spread panic around the world and especially in Canada. It was known as Black Tuesday because it was the day which put the population of Canada and other countries in debt (Canadian History 1201). During autumn of 1929 the stock market began behaving highly volatile.
There are not enough regulations and monitoring system for the daily accounting activities. For instance, management and auditors spend very little time reviewing the insignificance of petty cash account. So the five elements of internal control is not work well in this company. The control environment was not effective; there was no effective risk management, which helped the company to realize its objectives; control activities and monitoring are lack. Moreover, the CEO is ultimately responsible for the internal control who assumes primary responsibility for the system of internal control.
Enron will be an example of a dysfunctional company for many years to come. It was clearly a company riddled with fraud and excess and its conduct drove it into bankruptcy. The text argues that individual behavior was not at the core of Enron’s problems. What were the problems with this corporation from an organizational architecture point of view? The problem of this company was to leave low-level employees make decisions with little knowledge they needed more trained staff.
Enron's failure was a result of a breakdown of corporate structure and a failure of leadership. Without committed ethical leadership, ethical standards cannot be established in any organization. Leadership affects the workplace and helps to communicate the ethical standards, vision and mission that serve as a platform for the operations of any company. Enron’s managers brought the company to the brink of ruin, and many of Enron’s employees lost their jobs and a hefty portion of retirement savings invested in Enron stock. The lack of ethical leadership at Enron enabled a culture to develop among management that it was all about the money!
The Collapse of Enron Once a Fortune 500 company, Enron was forced to file bankruptcy in 2001. The bankruptcy action stemmed from the realization that Enron’s financial records were riddled with inaccuracies and other arrangements that were off-the-records. It is apparent that all of the higher-ups at Enron were out to make more money for themselves without real thought to the consequences or effects that their collective actions and illegal activities would cause. When news of the accounting discrepancies and possible illegal activity became known, the company’s stock plummeted. This led to Enron laying off thousands and shareholders losing billions (Ferrell et al., 2011).
The Failure of Lehman Brothers Holding Inc. What caused the failure of Lehman Brothers? Could it have been prevented? How? Kokou OHOUKOH Treasurer, banque atlantique Togo Abstract The collapse of Lehman Brothers Holding Inc. (LBHI) shuddered the whole banking and financial industry, and the world economy as well. The reasons for this failure have aroused academic interest and debate, and abundant research on the root causes of this “too big to fail” investment bank.
For instance, after worldcom collapse, Mr. Ebbers was recalled as saying that the project to write a code of ethics was “a colossal waste of time. All those failures ended up putting pressure on the accountants to make improper accounting entries to present a good image of the company. For instance, Mr Sullivan