Homework #2
1. There are potential agency conflicts in the exchange between HP director Sam Ginn and McKinsey experts. McKinsey consultants wanted the merger between HP and
Compaq to occur because they might have been able to collect higher fees. Therefore, they immediately squashed any doubts and gave advice for the merger to happen, even if carrying out such an acquisition would have destroyed value for HP shareholders. 2. For Patricia Dunn, the past successful consolidation mergers are vulnerable but overcome key challenges in the first two years. She believes that the merger between
HP and Compaq will ultimately help her company. The cost savings mentioned by
McKinsey consultants provides confirming evidence in
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Group members search for information that would support a proposal and would not share information that wouldn’t support the proposal. Levin’s actions involved not sharing information about a course of action on his part to which other executives might have objected. 8. Because managers hire the consultants, consultants are likely to perceive themselves in principal-agent relationships, with managers being the principals and consultants beings the agents. That is, managers rather than directors, play the role of the principal. As a result, consultants will perceive their own interests being served by supporting the interests of managers over the directors, who are actually the ones in charge. 9. HealthSouth’s interest to engage in fraud would naturally be in conflict with the interest of its auditors. Therefore, the “pristine audit program” can be construed as a device to most closely align the interests of the principal (HealthSouth) and agent
(Ernst & Young). HealthSouth did not have to pay their auditors a non-auditing fee that was twice the amount of their auditing fee in order to have magazines and toilets inspected. An auditing firm that receives consulting fees of this magnitude might find that its partners think twice about conducting auditing activities that might jeopardize the relationship with the client.
10. Both firms used top tier accounting firms as auditors, engaged in deceptive practices
to
| I'm not sure what the book says. However I would assume there could be many outcomes such as needs that might be too expensive to cover. Or perhaps not enough people want the same coverage or not enough people to meet the limit requirement for the insurance company. You can also find out that the benefit plan might not suit anyone at all and a serious change is needed.
2/17/2016 HLSC12O: SOCIETY, CULTURE AND HEALTH Lecture One: Introduction Introductions Teaching staff: Please check your campus unit outline Unit Outline: Learning outcomes Assessment Content Group introduction and activity Assessment tasks
The management committee chairperson carries out a full investigation taking written statements from all the staff present at the time, or who were on the outing
'But how could chief executives really know whether their answers to such questions were correct? Katie ponders. She feels chiefexecutives are likely to have a vested
This case analysis is based on the events that occurred on March 13, 2001 and the days that followed at Cerner Corporation. On that day the Chief Executive Officer of Cerner Corporation, Neal Patterson, sent a memo to the company’s managers via e-mail. In the message he advised the managers of his disgust with their disregard of punctuality and work ethic which he felt was as a result of the managers’ lack of leadership skills. The e-mail message was later obtainable for viewing on the Yahoo website to the public, including existing and potential investors and stock market analysts.
Sioux Falls, SD is one of McBride’s locations. McBride Financial Services utilizes sensitive equipment and toxic chemicals during its manufacturing process. These high end and dangerous items place the location at risk. Some of the threats include: use of toxic chemicals, public transportation, crime, and acts of terrorism. It is McBride’s responsibility to mitigate these threats.
What would be the potential needs of the company’s employees when receiving a message about this incident?
Corporate malfeasance is defined as deceptive and/or fraudulent activities carried out by corporate officers. Usually the CEO is held responsible for corporate problems, but a firm’s board is essential to preventing malfeasance and ensuring that management acts with integrity. I would describe some of Messier’s actions as corporate malfeasance. For example, Messier repurchased a significant amount of Vivendi Universal’s stock (i.e., 6.4 billion Euros from 2001-2002) to fund employee stock option grants. Because Messier was so focused on the firm’s stock, his focus was not on the firm’s financial stability nor did he make the best use of excess cash. Further, the accounting rules used were questionable, as Vivendi Universal used, and
And while anecdotal here, Kerry Heitz, a professional colleague preparing to exit after many years had been the epicenter of the leak and the unfolding firestorm in this tale of woe. It turns out that during a casual conversation with Christine over coffee, Kerry decided to seize the moment in this parallel universe. Being one of those trusted fiduciaries, he saw a pattern of significant abuses and took the unprecedented opportunity to propose linking executive bonuses to financial performance. Whether it was naivety or just trying to do right by the company, he should have realized that Christine had been kept uninformed by design. In any event, it didn’t take long before Kerry realized the error of his ways as the topic of that conversation eventually made its way back to Bill where it was not favorably received
addition, as a leader, when a whistleblower reports activity to you, first gather all of the
If Vinson had continued to refer to each level of leadership even to the CEO, audit committee, board of trustees, the board of directors, or even the owners, and still no action is taken from them, then the IMA would have recommended that she should have gone to the next step in the resolution of ethical conduct which is to refer to an IMA Ethics Counselor. This individual or another similar independent advisor is useful in clarifying ethical issues in a confidential and unbiased manner while providing other options for individuals to take.
The company faced issues related to the methods it used in investigating the unauthorized disclosure of nonpublic information to the press by the members of its board of directors. Apparently, Hewlett Packard hired some investigators in the case. The investigator used various techniques such as pre-texting- calling the telephone company and pose as someone else with an aim of obtaining that person’s information or records. The company and the board chairman, Patricia Dunn, were defending the company’s investigations about the director and the journalist. They cited that there were aggressive efforts to note the core source of leaks that were fully justified by the investigators