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Arthur Andersen LLP - Case Study Example

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Development of computerized bookkeeping by the organization is another environmental change that shaped its operation because it was the pioneer. Another significant environmental factor in the organization’s life is the internal wrangles that led to its disintegration into two separate firms (Learning Ace n.p.). …
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Arthur Andersen LLP
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Arthur Andersen LLP

Download file to see previous pages... Strategic changes that occurred in the organization’s life include development of a reputable character that established it in the accounting and auditing market. Later changes that suggest unethical practices such as collaboration with Enron’s accountants however transformed Andersen to its downturn and collapse. Application of soft strategies is another change that occurred in the organization’s life. Conflict between departments into integration also identifies strategic change in the company’s environment.
Organizational changes that Andersen realized are change from a centralized management to a disintegrated organization with independent managerial authority at branch level. Administrative policies for higher profits and lower costs are another organizational change in the organization and identified punitive reward and punitive measures depending on an employee’s level of success. Expansion to new areas of specialization and a shift form ethical values are other organizational changes that are evident from the organization’s life.
Evaluation of Andersen’s claim that their problems on the Enron audit were due to a few bad partners
Anderson’s claim that its problems were caused by a few bad partners is not valid. This is because the problem was a culmination of bad decisions that failed to resolve the organization’s problems such as need to maximize profits. The decision to set high targets for employees and punish in case of failure to meet the target is an example of causes of the problem because it forced the employees to explore all possible alternatives to avoiding the punishments. Integrating Enron’s accounting personnel into the organization is another indicator the management was aware of the practices at Enron because it never reacted. Duncan’s decision to move Enron’s $ 30 million ao a $ 50 million account is another indicator that Anderson was aware of a malicious practice because it took no action against the bad decision. If the problem had been a few individual then the organization could have been moved to correct malpractices before the final fall. 3. Possible actions as the Andersen’s managing partner in the early 1990s If I were a managing partner at the time, I would have preferred a different strategy. I would have explored a branding strategy towards retaining the organization’s existing clients and for attracting more clients. Developing on the already popular brand of quality services that are based on integrity would be my basis. Increased number of clients towards higher cumulative profit margins, even at lower margins, would then help the organization into a more competitive competition. This would at the same time care for employee’s interest in their income and job security and maintain an ethical culture. 4. Relationship between what happened at Andersen ...Download file to see next pagesRead More
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