Organisational culture and the scandal Essay Example | Topics and Well Written Essays - 3000 words

Organisational culture and the scandal - Essay Example This was the second write-down due to EDS. HP also revised its restructuring plans and changed the estimates based on the fourth quarter revenues and asserted that the company would be experiencing lower revenues from the software segment due to alleged fraud by Autonomy. HP recorded an estimated $ 8.8 billion write-down in the acquisition. According to the author, the company had made a poor hiring decision after another since it failed to stand behind CEO Mark Hurd who was keen on corporate governance (Saintvilus 2). HP business performance after the exit of Hurd began to fall, and no one could have predicted what his departure would hold for the future of HP. Hurd who is currently a president at a rival company (Oracle) was ousted from the management of HP due to allegations of sexual harassment that were attributed to Jodie Fisher who was an outside contractor. But surprisingly, Jodie Fisher who has appeared in many movies like ‘sheer passion† interestingly expressed sympathy for Hurd’s firing accusing HP of quick and sudden decision. Fisher’s attorney also claimed that the two had no sexual relationship, but the board went ahead to fire Hurd. The board failed in due diligence in the internal investigations since the board rushed the decision without attributing any evidence of managerial misconduct to Hurd (Svensson 3). Hurd had actually steered HP stock performance from $ 21 to $ 42 due to strong strategic leadership, but the share began to fall soon after Hurd’s departure. The share plummeted to a 10-year low of $ 11.35, but the board has been adamant in acknowledging that it made a wrong decision. After Hurd moved to Oracle, HP feared for its survival in the market and started legal wars citing non-compete agreements with Hurd thus leading to more business rivalry that included Oracle’s termination of porting software than runs on HP’s servers that uses Intel’s Itanium chips. The HP segment eroded $ 275 million in revenues. The above HP situation relates to lack of due diligence, corporate ethics and poor corporate culture since the Board has consistently failed in its decisions. Before HP finalized the acquisition, Jim Chanos, a short seller also issued detailed reports highlighting loopholes in Autonomy’s disclosures and financial records. Of particular note is that the entire management did not support the deal since the Chief financial officer who oversaw the acquisition was against the deal. Cathy Lesjak, the CFO had cautioned the management that the acquisition was expensive and was not in the best interests of the company (Wall Street Journal 2012). Organisational culture and the scandal There are many corporate governance requirement and financial reporting requirements that should be followed by all corporations. This means that the board of directors must exercise due diligence when dealing with other stakeholders or when reporting the economic performance of t he company. The management of HP is tasked with safeguarding the welfare of the shareholders who provide capital for the company. The board of directors at HP did not see the need of impartial investigations before acquisition of Autonomy. According to corporate governance issues, stronger companies like HP will acquire other