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Arthur Andersen Company Case Study

The selected case for this analysis is “Arthur Andersen (A)” and it describes the challenges the accounting firm was facing after its relations with Enron Corporation. The failure of this giant was attributable to poor accounting and business dishonesties that left many people concerned about Arthur Andersen’s involvement. This discussion focuses on Joseph Berardino’s situation and how he could guide the company to address the emerging communication issues and continue pursuing its objectives.

Case Questions

Changing Business Environment

The events leading to the collapse of Enron and the subsequent loss of clients’ savings and stocks transformed the business environment for many auditing firms. Arthur Andersen was one of the companies whose operations and relations with Enron remained questionable. The world was becoming more sensitive about the roles of auditing firms and how their connections with giant corporations could either break or support the targeted clients. The level of public scrutiny was unprecedented with different media houses focusing on the best approaches to present adequate information to more readers. Stakeholder involvement was also becoming a new reality in this changing business environment. Such issues would affect Arthur Andersen’s ability to communicate its past involvement in Enron’s case.

Vulnerability

Arthur Andersen has been a successful company within the past eight decades. However, the accounting malpractices associated with the collapse of Waste Management and Enron Corporation had put the firm in the spotlight. With this kind of scenario, Andersen might be unable to communicate the situation effectively to the targeted stakeholders. The most vulnerable area is the ability to provide adequate evidence to the relevant authorities and members of the public. This challenge exists since the officials and employees acted in accordance with the established document policy in 2011. They shredded files and destroyed any available information relating to Enron’s collapse. Such issues reveal the company might find it hard to convince the involved parties and members of the public that it did nothing wrong. The new management at Andersen is yet another issue that could affect its overall communication strategy.

Participants

Several professionals need to be involved in this case to support the formulated deliberations regarding how to communicate in the face of the anticipated SEC investigation. First, Mr. Berardino needs to be part of the process as the leader. He will apply his managerial skills to support the formulation of the best messages to share with both SEC officials and members of the public. His involvement will ensure that the other participants are willing to be part of the process. Second, it would be appropriate for David Tabolt to offer timely insights regarding how develop the best messages that resonated with the demands of the involved stakeholders, such as employees, customers, and the relevant government agencies. The professional would also provide additional ideas for formulating the best corporate communication strategy to deal with the media and members of the public.

The company should consider the importance of engaging all the key stakeholders in the ongoing investigation and support the communication process, such as departmental leaders and workers in different regions. These individuals could offer timely ideas for engaging others and even acquire new information about what happened at the company from 1996 to 2001. This knowledge could streamline the process and make it possible for the company to respond to the current crisis more efficiently. Finally, Andersen could hire competent professionals and communication strategists to acquire new insights for developing the best plan. Such an approach can result in a powerful strategy that has the potential to support the company’s intentions and ensure that such a situation does not affect its future performance.

Joe Berardino’s Role

The present case requires than Andersen develops a powerful communication strategy to engage the public and respond effectively to every question SEC raises. As the organization’s CEO, Berardino should complete various roles if the entire initiative is to succeed. The first one is appointing and instructing the right individuals to communicate the present situation to all employees at the company. Such a move would address the level of distrust among some of the workers, including Doug DeRito. A detailed communication plan to all the workers can ensure that they are informed about what is happening at the company.

The second role is to develop a team of competent communication experts to develop an effective plan that would respond to the expectations of media houses, journalists, and members of the public. Such an initiative is capable of minimizing the level of anticipated damage and supporting the survival of Arthur Andersen. Finally, the chief officer can prepare the best evidence to share with the authorities as one of the best approaches to handle the problem. Such a report will explain how some selfish senior workers at Andersen had violated the established code of conduct for accountants by continuing to collaborate with Enron even at a time when the headquarter was concerned about the internal auditing practices at the giant corporation. Such roles would place Andersen at a better chance of managing the situation more efficiently and emerging victorious.

Advice to Mr. Berardino

After received Berardino’s phone call from Tokyo, I would consider the need to offer new ideas to support the company during this tough period. Specifically, I would encourage the CEO to form a communication and public relations (PR) department comprised of different professionals. Such individuals would rely on their past experience to provide evidence-based ideas and messages and eventually transform the handling procedure. Such workers can liaise with the employees at the company, learn more about the nature of the accounting issue, and consider new strategies to communicate with the targeted stakeholders.

I would go further to encourage Berardino to share the emerging details with his respective followers. Such a strategy remains resourceful since some of these stakeholders would be willing to offer additional insights and make it easier for the company to come up with a superior plan. A detailed analysis of the events leading to probation after Andersen accounting malpractices with Waste Management could provide additional ideas and concepts for communicating the current predicament to the involved stakeholders.

Conclusion

The above discussion has explored some of the challenges Andersen is facing following its involvement in the Enron Corporation scandal. The presented responses offer powerful ideas that the leaders at this company could consider to develop an effective communication strategy and meet the demands of all the relevant stakeholders. The CEO should also hire competent professionals and create a PR department to handle the current situation and address the organization’s needs in the future. The consideration of these strategies will support the formulation of an effective communication plan for Andersen.

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Essay4Business. (2022, April 14). Arthur Andersen Company Case Study. Retrieved from https://essay4business.com/arthur-andersen-company-case-study/

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