Nortel Filed for Bankruptcy - Assignment Example

There have sometimes been problems at Nortel, as there have been in any company that is more than 100 years old. An accounting scandal a few years ago put a dent in the company’s reputation. This, however, was an anomaly. Nortel has learned from its mistakes. It has a strict business and ethics code which goes a long way to restoring the company’s reputation. It is not necessary to tie Nortel down in a web of social responsibilities that will seriously cut into its margins. Those who suggest that Nortel should change its policies in order to pay pensioners first instead of real creditors are missing the big picture and are getting in the way of Nortel's efforts to manage what assets it has in a way that can be considered for the greater good.

It is in a sense understandable that people would ask Nortel to do this, but that is more of an emotional response than a reasonable one. There are many unintended consequences for those who push the Corporate Social Responsibility agenda. It does not always lead to the results that we might expect. Let businesses be businesses and let charities be charities. It is simply too confusing and leads to too many unintended consequences for things to be set up in any other manner. The bottom of a company sometimes falls out there: there are no sure things in life.

These are dark economic times and it is important for Nortel to have as much flexibility as possible as it restructures its debt. Imposing a series of unreasonable burdens and responsibilities on the company goes against capitalist ethos and will deeply harm shareholders and stakeholders in the company.