Oracle Systems Corporation Essay

Words: 1285
Pages: 6

A Case Study:
Oracle Systems Corporation


In 1977, Lawrence J. Ellison founded System Development Laboratories to sell a database management system he had developed in a CIA project. It was only in 1982 that the company was renamed to Oracle Systems Corporation, to reflect the success of their first product, Oracle Database. Oracle used the C programming language to create its products, which was a big part of its success since this allowed Oracle software to run on various platforms and eventually became the industry standard.

Oracle achieved highly impressive growth throughout its early years, almost always doubling their
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Because of this, the company must revise its financial management and accounting procedures and comply to accepted standards. This is also relevant to the reporting of bad debts expense as there exists illogical/suspicious discrepancies in the relationship of bad debts to the level of accounts receivables.

3. The current sales quota system has been identified as one of the causes for Oracle’s rapid revenue growth. Although the revenue growth is considered as beneficial in the short-run, the long-term sustainability of the company is being compromised. The company must consider a reevaluation of its corporate strategies and its revenue/sales-based compensation system which it currently taking its toll on sustainable growth and employee welfare.


Given the analysis gathered by the team and the recommendations it has given, we ultimately propose that Oracle should change some of its accounting standards especially in recognizing revenue and its account receivables standards. Due to Ellison’s desire to grow the company and make more profit, actions considered unethical or at least doubtful were applied to increase revenue such as recognizing sale transactions early like even if the transaction has not been completely finalized,