‘Satyam †the Enron of India’

INTRODUCTION The effect take aim Satyam the Enron of India looks at Satyam Computer Services Limited and its involvement in merged fraud leading to one of Indias largest white-collar crimes. The Satyam filth marks as one of Indias biggest corporate scandals where its stakeholders were continu on the wholey deliver the goods misleading financial in motleyation from its late chairman Ramalinga Raju. This once promising, orbicular IT company admitd its services for nearly of the largest companies in Australia and the United States, such as Telstra, Suncorp and Qantas, to mention a few.The following baptistery study analysis looks at the failure of Satyam Computer Services Limited due to fierce contender and the need to impress stakeholders, along with inaccurate, misleading bill statements, unethical demeanour and poor lead. PART 1 Management issues in the Satyam case study From reviewing the case, the management issues in the case study are unethical demeanor and poor l eadership. As there was no approval call for form shareholders it gave Raju and his br some other the ability to make all managerial decisions.The wish of leadership and abuse of position let independent directors and audit committee intent intimidated enough to trust in the managerial decisions without question. The need for power and money led to negligence of fiduciary duties and inaccurate deceptive accounting on Rajus behalf. Rajus total disregard for managerial cleans effective to make short term figures to impress Satyams stakeholders burdened in a complete lack of corporate social responsibility.Rajus greed led to the manipulation of financial records to show increased earnings, payment of salaries to vestige staff, diversion of funds to purchase property in family particle names and fabricated profits. It is believed PricewaterhouseCooper failed to perform its role correctly and indeed this failure to follow fiduciary responsibilities lead to Rajus manipulation of the businesses statements and cash flow was go undetected. PART 2 Why the issues are snarly? In the archetypical instance we examine the unethical behaviour and the impinge of interest with family members in high company 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 wages into the decision making of the company. This advantage is how the company books were able to be cooked and high-sounding profits by selling 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 diverted into family real estate investments.Rajus expectations for power and ambitious corporate growth also contributed to the fraud. Whist there is no right or wrong way to be keep back due to Rajus lack of moral leadership Satyams stakeholders, clients and employees were also greatly affected by the demise. systematisation and justification lead to negative emotions which could have caused Raju to act emotionally and unethically without any regard for his stakeholders. The damage to the credibility of the company forced 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 sought business with Satyums competitors. Shareholders would have wooly money in the form of investments. Deceptive reporting practices and complete lack of transparency in the finances damaged the companys future tense 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 overturn its stock values, which inturn would lead lower profits and less investors. just to leave the attendant out of the equation 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 limited to just India as a culture, as It comes down having a good international manager that exercises good ethical behaviour.As all mangers are human its the ability of mangers to be self disciplined and handle pressure to provide total quality management. PART 3 Recommendations. In Satyams case the need to merge or sell the company would be the first step to restore some faith in the company. What happened with Satyam served as a reminder that a planetary, quality corporate governance mechanism is needed to ensure future companies dont follow in Rajus footsteps. Complete transparencies in finances would also avoid any temptation for unethical behaviour along with more deterri ng punishments for frauds of this scale.This would ensure higher homage and trust from stakeholders. Henri Fayols contribution to management thinking would be a great concept 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 missionary station of duties to correct workers, successful leadership. IV.Coordinating Make decisions and ensure all information is share and to monitor the works involved. V. Controlling Monitoring and making sure all things are running according to plan. Employee performance reviews Whilst policing manager disposition traits would be a perfect solution the reality of policing this is near impossible hence management accountability and responsibility would be a good start. Having a universal Code of Ethical Con duct and setting out universal teachings or courses in global ethics may also provide a solution.By obtaining a better understanding of cultural diversity, understanding the abilities, vales and personality types of different cultures ultimately it is up to the manager to be fully accountable. summons LIST 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. html