|
Inside Agency: The Rise And Fall Of Nortel
Timothy J. Fogarty,
Case Western Reserve University
Michel Magnan, Concordia University
Garen Markarian, Instituto Empresa
Serge Bohdjalian, Concordia
ABSTRACT. By employing the theoretical template provided by agency theory, this paper contributes a detailed clinical analysis of a large multinational but Canada-headquartered telecommunications company, Nortel. Our analysis reveals a 21st century norm of usual suspects: a CEO whose compensation is well above those of his peers, acts of income smoothing to preserve the confidence of volatile investors, manipulating information disclosure around option grant dates, and revelations of financial irregularities followed by a downfall. In many ways, the spectacular rise and - sudden - fall of Nortel illustrate excesses of actors within, and contradictions of the system of corporate governance implied by the agency model. Furthermore, this case illustrates limitations of the agency framework in complex situations with short term investors.
Full-Text is no longer available online. Please contact the author(s) for more information about this manuscript.
Back to Session Listing
|