‘Satyam †the Enron of India’

INTRODUCTION The lineament matter Satyam the Enron of India looks at Satyam computing device work Limited and its involvement in bodied fraud leading to one of Indias largest white-collar crimes. The Satyam turd marks as one of Indias biggest corporate s arsedals where its stakeholders were continu aloney fed misleading financial learning from its late chairman Ramalinga Raju. This once promising, spheric IT fellowship provided its services for more than or less(prenominal) of the largest companies in Australia and the United States, such as Telstra, Suncorp and Qantas, to think of a few.The following case study analysis looks at the trouble of Satyam Computer Services Limited due to vicious competition and the need to impress stakeholders, on with inaccurate, misleading accounting statements, unethical behavior and poor lead. PART 1 trouble issues in the Satyam case study From reviewing the case, the c ar issues in the case study argon unethical behaviour and poo r leadership. As there was no approval take form shareholders it gave Raju and his blood brother the efficacy to take for all film directorial decisions.The lack of leadership and ab apply of personnel let autonomous directors and audit committee feel aff chastise enough to imprecate in the managerial decisions without question. The need for power and bills light-emitting diode to negligence of fiduciary duties and inaccurate cheapjack accounting on Rajus behalf. Rajus total dis fancy for managerial righteouss just to make short name figures to impress Satyams stakeholders resulted in a complete lack of corporate loving responsibility.Rajus greed led to the function of financial records to show increased earnings, wages of salaries to ghost staff, diversion of monetary resource to purchase property in family subdivision names and fabricated profits. It is believed PricewaterhouseCooper failed to perform its role correctly and thusly this failure to follow fiducia ry responsibilities lead to Rajus manipulation of the businesses statements and cash flow was go undetected. PART 2 Why the issues are problematic? In the maiden faceface we examine the unethical behaviour and the contest of interest with family members in high family roles.Since the company was founded and owned by Raju himself, the chairman, and his brother occupying the role of managing director, which gave them and overwhelming majority and a psychological advantage into the decision reservation of the company. This advantage is how the company books were able to be cooked and inflated profits by interchange inflated stakes for went undetected for so long. Without the approval of from the shareholder the directors were able to use company funds to be entertained into family real estate enthronizations.Rajus expectations for power and ambitious corporate growth too contributed to the fraud. Whist there is no right or wrong way to contain due to Rajus lack of moral leade rship Satyams stakeholders, clients and employees were excessively greatly affected by the demise. Rationalisation and confession lead to negative emotions which could run through caused Raju to morsel emotionally and unethically without any regard for his stakeholders. The damage to the credibility of the company labored the cancellation of projects which in turn lead to the employees loss of wages, jobs and self esteem.The mistrust would have had clients question accountability and would have desire business with Satyums competitors. Shareholders would have lost money in the form of investments. Deceptive insurance coverage practices and complete lack of transparency in the pay damaged the companys approaching credibility. As PricewaterhouseCooper failed to detect the discrepancies I believe they also hold some accountability in the downfall of the company. As the falsifying of Satyams books would lower its line of products values, which inturn would lead lower profits a nd less investors.However to leave the auditor out of the par would be a mistake. As a result of negligence with both PricewaterhouseCooper and Raju, the outsourcing company suffered a massive blow in trust and leave further investment in the company questionable. However whilst the scandal put pressure on the Indian government and other Indian outsourcing, this type of scandal wouldnt be fudge to just India as a culture, as It comes down having a good world(prenominal) manager that exercises good ethical behaviour.As all mangers are human its the ability of mangers to be self disciplined and traverse pressure to provide total attribute management. PART 3 Recommendations. In Satyams case the need to merge or sell the company would be the first step to restore some religion in the company. What happened with Satyam served as a admonisher that a ordinary, quality corporate judicature mechanism is needed to correspond future companies dont follow in Rajus footsteps. Complete transparencies in finances would also avoid any temptation for unethical behaviour along with more deterring punishments for frauds of this scale.This would ensure higher loyalty and trust from stakeholders. Henri Fayols contribution to management opinion would be a great conceit to start with, his five principles I. Planning Establishing objectives and goals. Recognising obstacles, these can be internal or external, and how to control them. Forming, implementing and following up of plans. II. Organising Identification, classification, coordination III. Commanding The commission of duties to correct workers, successful leadership. IV.Coordinating Make decisions and ensure all information is shared and to observe the works involved. V. Controlling Monitoring and reservation sure all things are outpouring according to plan. Employee performance reviews Whilst policing manager spirit traits would be a perfect consequence the reality of policing this is near impossible ther efore management accountability and responsibility would be a good start. Having a universal Code of Ethical Conduct and shot out universal teachings or courses in global ethics may also provide a solution.By obtaining a fall apart understanding of cultural diversity, understanding the abilities, vales and temperament types of different cultures ultimately it is up to the manager to be fully accountable. REFERENCE proclivity Schermerhorn, Davidson, Poole, Simon, Woods, Chau, 2011, Management Foundations and Applications http//www. mahindrasatyam. com/investors/documents/Annual-Repor-for-the-year-2011-12. pdf http//www. vrl-financial-news. com/accounting/intl-accounting-bulletin/issues/iab-2009/iab441/satyam-scandal-where-to-from. aspx http//www. telegraph. co. uk/finance/4161198/Satyam-accounting-scandal-could-be-Indias-Enron. hypertext mark-up language