RUNNING HEAD: SUMMARY

A Summary and analysis of Nortel Networks Management System

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30th March, 2011.

I started working 100 hours every week to change a company that was struggling financially struggling company as the CEO at Nortel Networks, thinking it should be doing better since its products like network and CDMA Icode division multiple access are used everywhere by companies providing internet and cell phone services. I underestimated the magnitude of the problems and made a mistake of comparing it to GE and Motorola where I worked successfully previously.

My problem started when the management over reported earnings to produce corporate bonuses. I had thought that Nortel had corrected its financial reporting, but realized they had made the same error for the third time and had to make another report earning less profit. This brought the lawsuits against the company by shareholders who saw the Nortel stock value lose $30 billion and sought $9 billion for damages. I had to be sorry for this mistake and promise change as it would have put Nortel out of business. The first step was to reshuffle the staff and offer extra training.

It also demoralized the employees reducing the number of those highly satisfied with their jobs. When Nortel began being bankrupt I was supposed to convince financial companies that appeared skeptical to lend $2 billion to Nortel and keep it afloat, telling them of its worth . However, before that I had to cut down costs by reducing retiree benefits and lay off 1, 900 employees and 350 managers. I would ensure that the few employees are highly motivated in order for them to put maximum input in production.

In addition, Nortel’s main cellular technology CDMA was becoming old giving way to more powerful cell phone standards and equipment. This required introduction of new technologies so as to beat the competition

With the increasing problems I began contemplating how Nortel would return to profitability.

References

Cengage. What would you do? Retrieved 30 March 2011from < cengagesites.com/…/MGM

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