Apr 17, 2012

Chapter 1 Case Study 1 : 1. A Firm with a Scandal-Riddled Past

1. CA executives involved the accounting scandal were not accused of reporting bogus contracts or hiding major problems in business. the contracts that were backdated were real sales agreements. Was this really a crime? should the individuals have been punished so harshly?



- For me it’s a yes, it is a crime. He bribes to discourage a business client from revealing CA’s fraudulent accounting practices. But this should not be punished harshly because it is only the previous executives that are responsible for this, not the newly appointed ones.


2. In December 2004, CA appointed Patrick J. Gnazzo as a senior chief compliance officer to demonstrate to the government and shareholders that the firm would take measures to operate ethically, Gnazzo served in this role at United Technologies for 10 years and had been a member of the board directors of the ethics Offices Association .Gnazzo reported to a  new executive vice president and a general counsel at CA as well as the board's Compliance committee. Outline some of the Actions Gnazzo might have been taken in his first six months on the job.

- Gnazzo performs some other actions on his job like checking CA’s performance in both the company itself and the workers worked there.

3. John Swainson, a 26-year veteran of IBM, joined CA in November 2004 as CEO and President his first few months with the firm were rough- major customers threatened to dumb the firm some products were behind schedule and were of poor quality; executives had to be fired for breaking company  rules; accountants continued to find past mistakes; and many newly hired executives had to be brought on board. what sort leadership could he have demonstrated to show that he was determined to avoid future scandals at CA?

- Swainson should protect CA from their previous mistakes to make it just like before when CA is not still having any crimes committed.

4. CA has been hit with numerous scandals since the late 1990's. these scandals raise questions about how successful the firm might have been if not for the amount of time its executives had to spend on this distractions. compare the revenue growth and stock price of CA to that of some of its competitors over the period 2004-2008 (be sure to use CA's corrected figures!) can you detect any impact of these scandals on CA's performance? what else might explain the difference in performance?


- Most things mentioned in the third question—firms dumped, poor quality products, unethical employees and executives, and many others—are the impacts on CA’s performance.


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