Lucent Technologies Essay

1564 words - 6 pages

Introduction Lucent TechnologiesLucent Technology is North America's leading maker of telecom equipment and software, including switching and transmission equipment and business communications systems. Lucent Technologies, started trading publicly in 1996 with an initial public offering that was, at the time, the largest in domestic history (Hayes). In December 1999, Lucent's stock reached a high of $77.78 and was the nation's fourth most widely held stock (Romero and Atlas). But by July 2001, Lucent's stock was trading at $6.43, the SEC was investigating its accounting practices, and several former, high-level managers had been sanctioned by the SEC or were under criminal indictment for wrong-doing while at Lucent (Romero and Atlas). The plunge in stock value (exhibit 1) was primarily the result of a November 21, 2000, announcement in which Lucent said it had to restate its financial statements as a result of an internal investigation revealing accounting irregularities. Lucent's restatement reduced revenues by $679 million (McGough, Bloomberg).As early as June 2000, media attention had begun to be directed towards Lucent's aggressive accounting policies. A Wall Street Journal article in June, 2000 suggested that Lucent Technologies might be engaging in creative accounting practices, noting that Lucent's receivables were rising at 49% while revenues were rising at only 20% (Wall Street Journal).Accounting Policy Reporting objectivesLucent's chief executive Richard McGinn had turned Lucent into a Wall Street star by increasing sales at a double digit pace and was determined to maintain Lucent's growth. Many observers believed that Lucent's sales projections were imposed on sales executives by the chief executive who was intent on maintaining a 20 percent growth rate (Berman and Blumenstein). Don Peterson was appointed the executive vice president and CFO; he reported to CEO Richard McGinn and was accountable for the Corporate Finance Organization. Peterson explained in a 1999 article that revenue targets were attained because stock options were used as motivational tools (William, Hart). Motivation to manage earnings was based on executive compensation for performing well on the stock market. One of Lucent's revenue growth tactics included offering deep product discounts to induce customers to purchase products now instead of delaying these purchases. The short term result of increased current period sales came at the expense of not realizing those sales in successive years. Other tactics designed to increase current period revenues and meet stated sales targets included the extension of generous credit terms to customers. Sometimes payment of principal was deferred for several years with Lucent even financing equipment engineering and installation.Accounting ManipulationLucent had used many aggressive accounting choices to boost its growth. One analyst estimated that Lucent had added about 27 cents a share to its earnings through "deft...

Find Another Essay On Lucent Technologies

Cisco Essay

1252 words - 5 pages these that allowed Cisco to pull away from the competition and establish itself as a leader in the technology industry.2) The difference operating strategies between Cisco and Lucent technologies are striking. First off, Cisco is a horizontally integrated organization, while Lucent is a vertically integrated organization. Lucent does not outsource any part of their business. All product design, development, manufacturing, software control

Cisco Case Essay

2192 words - 9 pages Cisco Systems Case Follow-up On September 7, 1999, Lucent Technologies announced that it would purchase INS for $3.7 billion. Within minutes the phone in the office of Don Listwin, Cisco System's EVP, began to ring. Most calls were from colleagues who had received "feelers" from INS employees seeking employment at Cisco. That day, he was contact directly or indirectly by at least 25 of INS's managers and engineers who were personal friends of

Debby Hopkins

729 words - 3 pages Deborah C. Hopkins, 46, is one of the highest-ranking women executives at a Fortune 500 company. It's been no secret that she has long viewed herself as a Chief Executive Officer in waiting. At the time I chose Deborah C. Hopkins as a manager for this report, she was ranked the second most powerful woman. Deborah was the Chief Financial Officer of Lucent Technologies, responsible for executive management and oversight of all financial operations

UMS Essay

1679 words - 7 pages unified messaging. Lucent Technologies has developed a product called AnyPath Unified Messaging System. The design of AnyPath will satisfy all needs of both service providers and users. The six dimensions of this product include; reliability and scalability required to support carrier-class unified messaging service, an intelligent networking (IN) capability to support the advance functionality of the system, seamless messaging, bridging and

Critical Chain Project Management

767 words - 4 pages Chain Project Management Program for Supply Chain Professionals to train the people about Critical Chain Project Management. However TOCICO organization arranges the event for Critical Chain Project Management Certification. Project use this method Lucent Technologies has adopted this methodology as their primary tool as project management. In 1996, Lucent Technologies Advanced Technology Systems, now part of General Dynamics, was told by a

ATTs use of Total Quality Management

1423 words - 6 pages ATTs use of Total Quality Management The following is an attempt to analyze AT&T's use of Total Quality Management throughout its organization. Since AT&T is an elaborately enormous corporation I will focus my study to AT&T Power Systems/Lucent Technologies. This division of AT&T has been the industry standard for excellence since TQM was first introduced to the company. AT&T Power Systems has become one the world's most dynamic companies

Liberate Technology and iTV

617 words - 2 pages instead they would be integrated into the shows themselves. Instead of commercial breaks we might have one long commercial with entertainment breaks. This is why advertisers and big corporations are pushing so hard for interactive television. It allows for limitless possibilities in buying and selling. Some of the investors in Liberate include: Acer, America Online, Comcast, Cox Communications, General Instrument, Hambrecht & Quist, Lucent

Knowledge Work Systems

1065 words - 4 pages learning management systems. IEEE Transactions on Learning Technologies, 5(3), 213-225 Harrod, W. & Townsend, L. (1998). Distance learning in a changing environment at Lucent Technologies. Career Development International, 3(5), 194-198. doi:10.1108/13620439810229406 Jung, G., & Shim, S., (2012). Transferring workers' knowledge into the information system: a case of recommendation system for supplier selection in e-procurement service company

Uncertainties in Strategy

980 words - 4 pages , Lucent Technologies. Other companies, such as McDonald's in the 1990s, shape nascent markets by replicating business systems in new geographies. Still others focus on shaping the conduct of competitors; in the 1970s, for example, DuPont built its capacity in the titanium dioxide industry ahead of market demand, thus influencing its competitors' expansion plans.Adapters, by contrast, take the existing and future industry structure and conduct as given

AT&T and Alexander Graham Bell

1793 words - 8 pages system in the world. The system made steady progress towards its goal of universal service. Fifty percent of America’s homes had a telephone by 1945, seventy percent in 1955, and ninety percent in 1969. In September 20, 1995, AT&T announced that it was restructuring into three separate publicly traded companies. A systems and equipment company named Lucent Technologies. A computer company named NCR and a communications services company named

Effects of Technology in the 1940’s

1079 words - 5 pages first nuclear reactor and the first atomic bomb were created but both of these contributed to the death of hundreds of thousands of people. The first computer was invented. As were the Polaroid camera, which was the first instant camera, and the transistor, which helped advance video and television technologies. Penicillin became popular for use as an antibiotic during World War II. All of these had an impact in some way (Science in the 1940

Similar Essays

Lucent Technologies Essay

3084 words - 12 pages Introduction Since Lucent Technologies was spun off from AT&T in 1996, it has grown to be a leader in various market segments relating to the communications equipment and software industry. Looking at the company's history, it is easy to see that the roots for success were planted long before it became the twenty-second largest corporation in the world (Hoovers Online). However, looking at the current situation of the company is what

Business Case Study Lucent Technologies

1897 words - 8 pages Business Case Study - Lucent Technologies Executive Summary Lucent Technologies is a global leader in communications and software development. This report briefly overlooks its evolution, its achievements since its inception and its mission and targets. Born as a result of a spin-off of a unit of AT&T and relying on Bell Laboratories for its innovations, Lucent has expanded and grown at a tremendous rate in a very

Case Study On Lucent Technologies

2980 words - 12 pages combine with Bell Labs to become Lucent Technologies.In September 1995, US-based telecom giant AT&T announced that it would be restructuring itself into three separate companies - a services company, retaining the AT&T name; a products and systems company (later named Lucent Technologies); and a computer company (which assumed the name: NCR).AT&T proposes forming three separate, publicly traded companies to serve the increasingly

Lucent In A Globalizing World Essay

1514 words - 6 pages As seen, in order to say about firm it should be introduced closer. Lucent genesis is not complicated... Many years ago, AT&T, the American national telephony corporation, begun cooperation with famous Bell Laboratories, the inheritor of telephone inventor – Graham Bell. It’s very important, because in practice all innovations and introduced technologies had roots there. Growing manufacturing costs and great costs of sustaining