Satyam the Enron of India - Case Study Example

Satyam the 'Enron' of India Name: Course: Tutor: Date: Satyam the 'Enron' of India Satyam indignity raises grave questions concerning the MBA customs and industry management culture. When thought about more seriously, one of the contentious director a member of Satyam organizations board, Mr. N. Mohan Rao, was once the dean in one of the highly regarded business schools in India. He stepped down when he was compromised in the Satyam scandal. Questioned have been raised about his involvement in the 7000 Rs that were embezzled during one of the deals between the company and Maytas (Bhandari, 2009). The reason why this was one of the main forces while investigating him Satyam scandal was because he chaired the meeting and was one of the primary benefactors. Ramalingam Raju, the mortified chair of the company, also earned his MBA from Ohio. He also did a course in the prominent Harvard Business School. The most distressing questions now is how people like him who have earned high-education standards from some of the best management and business schools in the world be caught up in such conducts that questions one's ethics. Many ethical scholars point to the fact that most business and management schools are least concerned with business ethics (Craig, 2009). One of the most conclusive theories that can be related to the Satyam scandal is that the MBA culture is not. The manager Ramalingam Raju was more concentrated with making money that he became pulled In the middle of all of it. The problem in the company's management begun when the board of management got their priorities mixed up between making while more money for themselves and running the company. The fact that men like Ramalingam Raju and many more who have learned from what is supposedly the best management schools in the world were involved in scandals like this tells more of what the education offers (Fernando, 2011). The proposed theory in this article is the MBA culture is on a downward trend due to the lack of ethic concern on the part of the schools that teach this. The internal root of the company’s problems emanated from individuals meant to be auditing the company’s books. They might have been got caught up in the middle of all of this or were not qualified enough to carry out the auditing (Varun, 2002). The Satyam scandal can be termed as one of the biggest to be eve exposed in India considering that the company almost put the country in an economic problem. The scandal main cause in this article will be identified in two main methods. First, the article will look at the problem from an internal way. Here, the article will identify ways in which the internal factors led to the scandal. The internal factor includes factors such as financial scheming, auditing defaults and book cooking. In the financial world, book cooking is a term used to refer to the changing and falsifying of account books and ledgers. Managers usually do this to hide the true results from the companies shear holders or as a way of embezzling funds from the company (Kohli & Sood, 2010). The problem that is first identified and considered as the main source of the scandal is the managers’ lack of ethics. Lack of ethics can be sated as the main course of the problem. He auditing department in the company is considered one of the worst auditing team. The reason behind this argument is an auditing team that does not see such grave embezzlement is either helping in embezzling the money or is not qualified enough (Aboody, 2003). In one of the journals by Patricia Hogue Werhane, she noted that some of the most prestigious schools such as Harvard had a foul culture when it came to MBA. The author questioned whether what they taught at Harvard was potentially meant to help people deal with the outside reality. Hogue stated that students spend a lot of money in schools like this but do not get the benefit of the education. The strongest factors that the author points out are that Harvard initiates people to star in hypocrisy teachings where money is the key element that drives one. This article seeks to question whether the MBA culture is correct or should be redefined keeping in mind the Satyam scandal was an example lack of seriousness in ethical teaching in business and management schools (Varun, 2002). There is an increasing comprehension now in India that business and management teaching has to become more significant to the culture and ethical standards. The Indian ethical society is proposing that the business and management teaching be based more on the Indian way rather than the American way. The proposal has been supported by many entities, which confirm that the American way is not cultured enough because it perpetuated the Satyam scandal. In his journal, Varun Arya said that the MBA culture was in a mess and concentrated mostly in teaching about the money side of business rather than the ethical side. The author proposes that the Shubh Labh concept be introduced in the business and management studies. When well scrutinized by the earlier mentioned authors Hogue both of them seem to agree that education is more or less meant to be based on ethics (Aboody, 2003). Many recommendations concerning the teaching of the topic have been suggested including that the institutes start focusing more on the teaching of ethical business, which is meant to eliminate these problems faced by institutions and organizations alike. In his journal, Shubh suggests that company managers should stop being too money-driven to the extent that they forget about the society their CSR responsibilities. In comparison to Hogue, both writers state that if Satyam directors could have been more ethical, the scandal could have never had happened in the first place. Business week, one of the leading journals in the world of business, blames business and management schools for a rise in the scandals affecting the globe. The article states that the schools place more significance on leaders’ personality over the core managerial elements such as morals and ethics. The journal also points out that the management schools seriously embrace market and commas exploit and abuse in the name of making a quick profit (Patricia, 2008). The crisis at the Satyam scandal should also compel some intellectuals to help the heads of some of the people who openly do not support the people’s efforts to change the MBA culture saying that the ordinary public does not have the engineers, business gurus and experts who know better than the ones in business or the ones teaching business. The business weekly claimed that these people had been holding on to the claim that the best system collapsed while they were executing their duties (Aboody, 2003). The journal claims that a group of capitalists is even opposing the model that is being used in the American schools. This, the journal claims, has been made clear in a meeting that most capitalist head attended including the Russian president the former British prime minister and others. The Satyam saga has revealed many problems that have been identified as some of the biggest nuisance in the management world (Kohli & Sood, 2010). A journal by PD Aboody also claimed that the IT and management experts had started thinking that they were better than other professionals were because they were paid a higher salary. The Satyam scandal also significantly uncovered the company’s benefactor, the previous chief minister. The minister's actions were being praised as the best things to have ever happened in India. Mr. Chandrababu Naidu was being termed as the man in charge of the financial restructuring and a policy entirely servile to the welfare of the Americans. Also, caught up in the Satyam scandal is a politician from Maharashtra Mr. R.C. Sinha who retard a while ago Mr. R.C. Sinha retard from one of the companies that was linked to Satyam. The man has almost been accused of assigning the 130 acres piece of property in India to the culprits. The problem is that Mr. R.C. Sinha sold the land at unusually high rates then embezzled money from selling. In the deal between him and Satyam, a lot of money went missing without being accounted. Mr. R.C. Sinha had made a name for himself in India as the man responsible for seeing quality flyover’s and road projects take place (Bhandari, 2009). After carefully assessing the Satyam scandal, some recommendations have been suggested in order to avoid such a scandal in the future. The first recommendation that is being proposed in the article is the introduction of serious ethical teaching in business and management learning. This will help mold better management and business executive who will work relying on ethics rather than on making money (Craig, 2009). Ethics is the key to better trading. It develops a trust worthy relationship between the clients and management of a business. However, without proper business ethics a business is deemed to fail since it does not have the proper business traits. The second and critical proposal the article is putting forward is the serious reevaluation of the companies auditing team. The auditing team in the company is at a large part being held accountable for what happened. The team had a chance to identify this mess before it went overboard. The final recommendation is the paper has is the proposal to implement the external factors that the article has focused (Kleiman, 2010). References Bhandari, B. (2009). The Satyam saga. Business Standard Books, 2009 Craig, S. (2009, January 29). Merrill Bonus Case Widens as Deal Struggles. Wall Street Journal. Fernando, A. C. (2011). Business Environment. Pearson Education India Ferrell, O. C et al. (2010). Business Ethics: Ethical Decision Making and Cases. Cengage Learning Kleiman, S. (2010). Management and Executive Development. Reference for Business: Encyclopedia of Business Journal 25 Mar 2011 Kohli, H. S. & Sood, A. (2010). India 2039: An Affluent Society in One Generation. Sage Patricia H (2008). Management: People, Performance, Change, 3rd edition. New York, New York USA: McGraw-Hill PD Aboody. (2003). The Dark Side of Leadership. Business Strategy Journal 14(3), p 26 Varun. A. (2002). The Heart of Change. Boston: Harvard Business School Journal Read More