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Dell follows in CA's footsteps
Dell founder Michael Dell is subject of an SEC investigation into the company's accounting scandal.
As the computer maker disclosed last week, executives have been cooking the books to ensure that they met financial targets, allowing them to earn their bonuses. Dell's official position is that the company's founder (pictured right) wasn't involved. But the SEC wants to hear his testimony anyway.
The case has an unnerving similarity to Computer Associates (or CA, as it refers to be called these days). Just like Dell, the software firm marched on the industry and established itself as a market leader in several segments. But then it got hit by accounting scandals which turned out to go all the way to the top. Former chief executive Sanjay Kumar (pictured below) is currently taking a 12 years break from civilian life as a federal inmate.
Just like Dell, CA also succeeded in rapidly undermining its reputation with customers. Admittedly, Dell has been successful in turning around the company for now. But CA also had a brief period of seeming recovery before it fell into the deep pit of accounting irregularities and obstruction of justice charges.
If Dell doesn't make sure that this storm blows over quickly, it could be battling a bad climate change for a long time.
Not a good role model
August 21, 2007 at 07:28 PM | Permalink
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