Capstone Case Study – Arthur Andersen LLP
Bus 680 – Economics for Business Decisions
1. Discuss the environmental, strategic and organizational changes that occurred over the life of Andersen in the context of figure 11.1.
While Andersen started off as a stable environment, once changes started being made to the main focus of the company many changes were expedited. While still successful in it’s auditing business, other opportunities arose that allowed for quicker and more dynamic revenue growth. This strategic shift from auditing only to offering a number of other services (automated bookkeeping, information technologies, consulting, corporate staffing) eventually led to a rift within the company, the …show more content…
As changes started to happen in the “hard” culture, like the focus being on driving revenue as opposed to putting out quality work, changes were also seen in the soft aspects of the culture. Managing partners did not dress as sharp, the giants wooden doors of the offices (that seemed to be a metaphor for the strong, sturdy operation of the company) were removed, and a new corporate logo was introduced.
6. Do you think that the problems at Andersen were unique to them or did they exist at the other big accounting firms? Suppose you were the top partner at one of the other major accounting firms at that time of Andersen’s demise. What action, if any, would you take in response? Explain.
As shown when Andersen themselves called into question the practices of one of it’s competitors (calling for an investigation), these issues at Andersen are not unique to their company (though it may not happen on as grand of a scale). If I was the top partner at one of the other major accounting firms at the time of Andersen’s demise, I would have immediately either called for an internal investigation of my firm’s practices or volunteered to have my company’s practices reviewed by the SEC or another appropriate authority. I would be open with what was found, make any necessary changes