Details

Abstract / Summary

This structured assignment is to accompany the case '410-009-1'. The abstract of the case is as follows: This case analyses the ethics of rightsizing decisions and the general rightsizing practices in business corporations. It specifically looks into the issues of accounting scandal and rightsizing at Merge Healthcare Incorporated. With its humble beginning in 1987 as a medical imaging technology company, Merge's initial growth was dull. Soon, recognizing the increasing interests of investors in health care organisations and the possibilities, it became a public company in 1998. Merge's share value reached an all time high during 2002-2005. This led to speculation among investors about the unfair accounting practices in the company. Merge struggled over many class action lawsuits and an independent investigation forcing the top executives to resign and the company took a deep plunge in the share market. Merge's hard earned image deteriorated and losses started haunting the business. Merge had to cut costs and they decided to reduce the workforce. During 2006-2008, the company cut jobs thrice as part of its rightsizing program. It was only after the third rightsizing that the company started to recover. Soon the company came out of the blues, started expansion, made new acquisitions and of course, started hiring. Although the company recovered, the question remains - does a company really have to undergo rightsizing to come out of the financial trouble? This case can be used to: (1) understand the difference between the concepts of rightsizing and downsizing and to examine the situations that lead to rightsizing; (2) understand the rightsizing of Merge Healthcare and its immediate after-effects; and (3) analyse the ethical side of rightsizing decisions.

Field of Interest

Business & Economics

Author

M.V. Vivek, fl. 2009

Copyright Message

Copyright © 2009 by IBS Center for Management Research

Content Type

Case study

Duration

0 sec

Format

Text

Original Publication Date

2009

Page Count

13

Publication Year

2009

Publisher

IBS Case Development Centre

Place Published / Released

Hyderabad, Telangana

Subject

Business & Economics, Social Sciences, Corporate Governance, Accounting, Organizational change, Executives, Job resignations, Scandals, Accounting, Medical Equipment and Supplies Manufacturing, Governança Corporativa, Gobierno Corporativo, Contabilidad, Contabilidade, United States of America, USA, US of A, America, Estados Unidos, Merge Healthcare, United States, Business Ethics

Keywords and Translated Subjects

Governança Corporativa, Gobierno Corporativo, Contabilidad, Contabilidade, United States of America, USA, US of A, America, Estados Unidos