The Fall of Arthur Andersen - Organizational Culture Issues |
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» Human Resource and Organization Behavior Case Studies Please note: This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source. |
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ExcerptsChanging the Organizational Philosophy
The Auditing/Consulting Divisions Fight it OutIn 1987, to end the animosity between the two groups, the audit group agreed to separate the groups and allow the consulting group to function as an independent division. However, this agreement included a clause, which stated that the group, which earned more would have to give 15% in the earnings of the other group. The agreement also stated that the consulting partners now would directly report to other consulting partners and not auditing partners. In 1989, consulting group revenues accounted for over 40% of the firm's total revenues of $2.8 billion...
Andersen - Ready to FallIn this vitiated environment, Arthur Andersen employees were not allowed to question the superiors and were forced to comply with improper orders. There was no transparency in the system. According to Toffler, most of the people did not want to be involved in unethical activities, and such activities took place only because 'decent people were put under unbearable pressure to do their jobs and to meet the firm's ambitious goals with very limited resources to get the job done.'... |
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