Managerial Economics and Organizational Architecture-ARTHUR ANDERSEN Case Study

Man daterial Economics and Organizational Architecture-ARTHUR ANDERSEN LLP - Case Study poserThereafter, around the 1980s, Arthurs tauten changed its outlook by installing woody doors in all its dischargeices, piece of music the firm trained its employees on thinking straight, as well as talking straight. The management withal gave the right of decision making to the central offices professional standard group, with an aim to forest and firm opinions in the organization. Technologically, an engineer in Andersens firm came up with the idea of data processors use in bookkeeping, hence proving to be efficient while automating their clients invoice systems. This led to the rise of a computer consulting business, which provided services to other firms and yielded much more revenue compared to the auditing. Due to the conflicting factors of the consultants feeling underpaid and expiration the firm, Andersen separated the consulting and auditing business and decided to form Anders en worldwide (AW). This consisted of Andersen consulting that focused on consulting services via use of computer systems and Arthur Anderson (AA), which focused on audit and tax business (Capstone case study pp 555) Due to stiff competition, the firm made some organizational changes first, it decided to cut on it costs by ensuring that its employees retired at the age of 56 year, thus yielding more revenue that benefited the partners. New partners emerged such as Steve Samek who headed the Boston moaner audit, and Robert Allgyer who excelled in waste management that generated $17. 8 million. With Samek becoming the managing partner at AA, he introduced the 2X performance military rating that required partners to yield twice as much from auditing and non-auditing services, and those who met this target would be rewarded. The dress code changed and the wooden doors that had been installed were removed, and a new logo the rising sun was adopted. New services were offered such as conce ntrating on the bookkeeping and offering internal audits (capstone, 557). Evaluate Andersens claim that their problems on the Enron audit were due to a a couple of(prenominal) bad partners in the organization. If you disagree with this claim, discuss what you think were the root causes of the problem. As one staff suggested, at that place were too many people in the Houston office, with their fingers on Enrons pie (capstone, 55), which is true as the auditor symbolize chose to ignore the problems that faced Enron. Andersen firm was competent and it should not have blamed anybody for the decisions it made such as shredding documents so as to hide fraud practices at Enron. Anderson should have taken the blame himself, as he was responsible for his employees ethics other than firing David Duncan. In addition, the problem could have arisen from incompetent staff, questionable accounting practices, bad management, and poor internal controls. Suppose you were Andersens managing partner in the early 1990s. Would you have done anything differently than the actual management (assuming you knew only what they did at the time)? First, I would have only hired a self-coloured number of auditors to work with and ensure that they were competent enough. Secondly, my management would not have advised Enron to declare itself let on at that crucial time, as many investors would be affected. The questionable accounting practices at Enron that Andersen signed off should have been brought to light, so as to determine the root cause of the problem. Moreover, effective management, quality