Question

Would you describe the meltdown of Nortel more as a failure of “people” or of “capital market processes”?

Answer 1

I would describe what happened to Nortel as a failure of people. According to the definition of utilitarianism in normative ethics, it is based on the quality of action. The action, independently of its motives, is considered right in case if it results in the happiness of its agent and everyone affected by the action (West, n. d.). At the same time, if the action is done to please just the agent, it is considered selfish and unethical.

From the perspective of utilitarianism, Nortel’s meltdown became the result of the selfish actions of its managers as well as its shareholders as both of these sides acted egoistically in order to preserve and secure their own profits. The inner relationships in the organisation were dry and only based on business and revenues.

The company was definitely an outstanding business project, yet it did not survive for long because of the company’s little care about the people it was based on, and the people’s little care about the organisation. The clash of egoistic pursuit typical for human nature and sequence of selfish actions seem to be the main causes of the downfall of Nortel. Besides, the risky actions of the organisational leaders based on its prior success were rather emotional instead of being rational and wise.

Lack of organisational trust and regulations restricting information manipulations among the managers along with organisational injustice in reference to John Roth’s huge compensation created the disruption of inner culture within this corporation. In my opinion, ethical leadership in Nortel was not present and this is not an issue of capital market process. I view Nortel’s case as a demonstration of what happens when marketing process is unregulated by policies and leaders, which eventually turns it into total chaos.