Misplaced Pages

#685314

99-582: Nortel Networks Corporation ( Nortel ), formerly Northern Telecom Limited , was a Canadian multinational telecommunications and data networking equipment manufacturer headquartered in Ottawa , Ontario , Canada. It was founded in Montreal , Quebec in 1895 as the Northern Electric and Manufacturing Company, or simply Northern Electric. Until an antitrust settlement in 1949, Northern Electric

198-590: A joint venture in August 2005, with Nortel owning 51%, to offer telecom and networking solutions in the wireline, optical, wireless and enterprise areas for South Korean and global customers. Peter W. Currie, previously the Chief Financial Officer (CFO) of the Royal Bank of Canada , was named CFO of Nortel in 2005, having previously served as Northern Telecom's CFO in the 1990s. Gary Daichendt,

297-704: A stalking horse bid . Nortel had acquired the application switch product line in October 2000 when it purchased Alteon WebSystems. With the worsening recession and stock market decline deterring potential companies from bidding for Nortel's assets, and many of Nortel's major customers reconsidering their relationships with the restructuring company, in June Nortel announced that it no longer planned to emerge from bankruptcy protection, and would seek buyers for all of its business units. After announcing it planned to sell off all of its assets, Nortel shares were delisted from

396-461: A $ 57 million deal to wind up the health care and other benefits provided to former Canadian employees. Shortly afterwards, Nortel proposed spending $ 92.3M on retention bonuses for 1,475 employees in its Nortel Business Services and Corporate groups, with $ 2.5 million in incentives going to Christopher Ricaute, president of Nortel Business Services; $ 27 million allocated for Canadian employees; and $ 55 million allocated for U.S. employees. The proposed plan

495-582: A US$ 1 billion indemnification from Nortel, joining the list of U.S. creditors. In February 2010, Ernst & Young , the court-appointed monitor of Nortel's Canadian bankruptcy proceedings, reported that the assets of Nortel's Health and Welfare Trust had a shortfall of $ 37 million in its net assets as of December 31, 2008. The trust supports pensioners' medical, dental and life insurance benefits, as well as income support for some groups such as long-term disability recipients. Also in February, Nortel negotiated

594-549: A bailout. Nortel initially hoped to re-emerge from bankruptcy, implementing a retention bonus plan in an effort to retain its top executives during the restructuring period. These bonuses, totaling US$ 45 million, were targeted at 1,000 executive positions. At the end of January 2009, Nortel announced that it would be discontinuing its WiMAX business and its agreement with Alvarion . Nortel subsequently sold its Layer 4–7 application delivery business to Israeli technology firm Radware for $ 18 million, after Radware had initially placed

693-766: A basis in a national ethos , being ultimate without a specific nationhood, and that this lack of an ethos appears in their ways of operating as they enter into contracts with countries that have low human rights or environmental standards . In the world economy facilitated by multinational corporations, capital will increasingly be able to play workers, communities, and nations off against one another as they demand tax, regulation and wage concessions while threatening to move. In other words, increased mobility of multinational corporations benefits capital while workers and communities lose. Some negative outcomes generated by multinational corporations include increased inequality , unemployment , and wage stagnation . Raymond Vernon presents

792-649: A cabling company for $ 500,000; a Canadian charter named it The Wire and Cable Company . Northern Electric and Manufacturing further expanded its product line in 1900, manufacturing the first Canadian wind-up gramophones that played flat discs . In 1911 the Wire and Cable Company changed its name to the Imperial Wire and Cable Company . The construction of a new manufacturing plant started in 1913 at Shearer Street in Montreal, Quebec, Canada, as preparations began for

891-508: A corporation invests in a country in which it is not domiciled, it is called foreign direct investment (FDI). Countries may place restrictions on direct investment; for example, China has historically required partnerships with local firms or special approval for certain types of investments by foreigners, although some of these restrictions were eased in 2019. Similarly, the United States Committee on Foreign Investment in

990-674: A dramatic restructuring of Nortel, which included laying off two-thirds of its workforce (60,000 staff) and writedowns of nearly US$ 16 billion in 2001 alone.This had some initial perceived success in turning the company around, with an unexpected return to profitability reported in the first quarter of 2003. The black ink triggered a total of $ 70 million in bonuses to the top 43 managers, with $ 7.8 million going to Dunn alone, $ 3 million to chief financial officer Douglas Beatty, and $ 2 million to controller Michael Gollogly. Independent auditor Deloitte & Touche advised audit committee chairman John Cleghorn and board chairman "Red" Wilson to look into

1089-429: A free market system where there is little government interference. As a result, international wealth is maximized with free exchange of goods and services. To many economic liberals, multinational corporations are the vanguard of the liberal order. They are the embodiment par excellence of the liberal ideal of an interdependent world economy. They have taken the integration of national economies beyond trade and money to

SECTION 10

#1732780024686

1188-638: A fresh round of legal arguments in a seven-year-old bankruptcy which cost creditors about $ 2 billion including attorney fees. Courts in the U.S. and Canada approved a negotiated settlement among competing creditors in January 2017. Nortel made telecommunications , computer network equipment and software . It served both general businesses and communications carriers ( landline telephone , mobile phone , and cable TV carriers). Technologies included telephonic (voice) equipment, fiber optics , local wireless , and multimedia . Past products included: In 2016,

1287-508: A majority share in BNR, and eventually acquired the entire company. In the late 1990s, stock market speculators , hoping that Nortel would reap increasingly lucrative profits from the sale of fibre optic network gear, began pushing up the company's share price to unheard-of levels despite the company's repeated failure to turn a profit. Under the leadership of chief executive officer (CEO) John Roth , sales of optical equipment had been robust in

1386-490: A million troops to help, and by February 1991, Iraqi forces were expelled from Kuwait. Due to the oil boycott from Kuwait and Iran, oil prices rose and quickly recovered. Saudi Arabia once again led OPEC, and thanks to assistance in defending Kuwait, new relations emerged between the USA and OPEC. Operation "Desert Storm" brought mutual dependence among the main oil producers. OPEC continued to influence global oil prices but recognized

1485-430: A reduction in previously reported net losses for 2000, 2001, and 2002 and an increase in shareholders' equity and net assets previously reported on its balance sheet. A dozen of the company's most senior executives returned $ 8.6 million of bonuses they were paid based on the erroneous accounting. Investigators ultimately found about $ 3 billion in revenue had been booked improperly in 1998, 1999, and 2000. More than $ 2 billion

1584-590: A stalking horse bid of $ 475 million. In November, Nortel sold its MEN (Metro Ethernet Networks) unit to Ciena Corporation for US$ 530 million in cash and US$ 239 million in convertible notes, and its GSM business at auction to Ericsson and Kapsch for US$ 103 million. Hitachi purchased the Next Generation Packet Core assets. As insurance against judgments in class action lawsuits filed by former employees, John Roth filed in December 2009 for

1683-410: Is often handled through international arbitration . The actions of multinational corporations are strongly supported by economic liberalism and free market system in a globalized international society. According to the economic realist view, individuals act in rational ways to maximize their self-interest and therefore, when individuals act rationally, markets are created and they function best in

1782-865: Is usually a large corporation incorporated in one country that produces or sells goods or services in various countries. Two common characteristics shared by MNCs are their large size and centrally controlled worldwide activities. MNCs may gain from their global presence in a variety of ways. First of all, MNCs can benefit from the economy of scale by spreading R&D expenditures and advertising costs over their global sales, pooling global purchasing power over suppliers, and utilizing their technological and managerial experience globally with minimal additional costs. Furthermore, MNCs can use their global presence to take advantage of underpriced labor services available in certain developing countries and gain access to special R&D capabilities residing in advanced foreign countries. The problem of moral and legal constraints upon

1881-553: The 2007–2008 financial crisis . Nortel had an interest payment of $ 107 million due the next day, approximately 4.6% of its cash reserves of approximately $ 2.3 billion. After the announcement, the share price fell more than 79% on the Toronto Stock Exchange. Export Development Canada agreed to provide up to C$ 30 million in short-term financing through its existing credit support facility with Nortel. The Canadian government resisted characterizing its position on Nortel as

1980-541: The Bell System , leading to the city's style as The Telephone City . After Cowherd's death in 1881 which resulted in the closure of his Brantford factory, a mechanical production department was created within the Bell Telephone Company of Canada and production of Canadian telephone equipment was transferred to Montreal in 1882 to compensate for the restrictions on importing telephone equipment from

2079-565: The Canadian Broadcasting Corporation reported that lawyers and accountants received CA$ 2.5   billion from Nortel's estate. In 2001 Nortel's director of information services Kathleen Peterson was found dead at the bottom of a staircase in her home in Durham, NC. Nortel had been enduring heavy layoffs during this time, and family members report that Kathleen was worried she may too be laid off at Nortel. This

SECTION 20

#1732780024686

2178-737: The Canadian Taxpayers Federation denounced the line of credit, calling it " corporate welfare at its worst." On April 28, 2004 amidst the accounting scandal, three of Nortel's top lieutenants—Douglas Beatty, CEO Frank Dunn and Michael Gollogly—were fired for financial mismanagement . They were later charged with fraud by the RCMP . The trial began on January 16, 2012, ending with acquittals for all three. The United States Securities and Exchange Commission (SEC) also filed charges against them and four vice-presidents for civil fraud. On December 19, 2014, remaining civil charges from

2277-848: The Dutch East India Company (VOC) founded in 1602. In addition to carrying on trade between Great Britain and its colonies, the British East India Company became a quasi-government in its own right, with local government officials and its own army in India. Other examples include the Swedish Africa Company founded in 1649 and the Hudson's Bay Company founded in 1670. These early corporations engaged in international trade and exploration and set up trading posts. The Dutch government took over

2376-501: The Internet and other communications networks. As a consequence of the stock transaction used to purchase Bay Networks, BCE ceased to be the majority shareholder of Nortel. In 1999, Nortel outsourced several of its manufacturing operations to North American contractors. In 2000, BCE spun out Nortel, distributing its holdings of Nortel to its shareholders. Bell-Northern Research was gradually absorbed into Nortel, as it first acquired

2475-809: The Ontario Securities Commission and SEC were simultaneously dropped. After Dunn's firing, retired United States Admiral Bill Owens  – at the time a member of the board of directors – was appointed interim CEO. Nortel Networks subsequently returned to using the Nortel name for branding purposes only (the official company name was not changed). Nortel acquired PEC Solutions, a provider of information technology and telecommunications services to various government agencies and departments, in June 2005 and renamed it Nortel Government Solutions Incorporated (NGS). LG Electronics and Nortel formed

2574-670: The 19th century, such as the Rio Tinto company founded in 1873, which started with the purchase of sulfur and copper mines from the Spanish government. Rio Tinto, now based in London and Melbourne , Australia, has made many acquisitions and expanded globally to mine aluminum , iron ore , copper , uranium , and diamonds . European mines in South Africa began opening in the late 19th century, producing gold and other minerals for

2673-531: The Carrier VoIP and Application Solutions (CVAS) unit in May 2010, as Nortel accepted its stalking horse bid of $ 282 million, with adjustments that decreased the net sale price to about $ 100 million, without a formal bidding process. Ericsson purchased Nortel's share in its joint venture with LG Electronics for US$ 242 million, forming LG-Ericsson , in June 2010. Ericsson also purchased Nortel's final operating unit,

2772-551: The English language. Senior officials, although mostly still Swedish, all learned English and all major internal documents were in English, the lingua franca of multinational corporations. After the war, the number of businesses having at least one foreign country operation rose drastically from a few thousand to 78,411 in 2007. Meanwhile, 74% of parent companies are located in economically advanced countries. Developing and former communist countries such as China, India, and Brazil are

2871-575: The International Energy Agency (IEA), enabling states to coordinate policy, gather data, and monitor global oil reserves. In the 1970s, OPEC gradually nationalized the Seven Sisters. The Kingdom of Saudi Arabia, as the only largest world oil producer, could leverage this. However, Saudi Arabia opted for the correct approach and maintained consistent oil prices throughout the 1970s. In 1979, the "second oil shock" came from

2970-862: The Multi-Service Switch division, in September 2010 for US$ 65 million. Nortel's Ottawa campus on Carling Avenue was purchased by Public Works and Government Services Canada (PWGSC) in October 2010 for a cash purchase price of CDN$ 208 million, to serve as the new home of Canada's National Defence Headquarters . Nortel's 53.13% stake in Turkish company Nortel Netaş was acquired by One Equity Partners (OEP) and Rhea Investments for $ 68 million in December 2010. The last major asset of Nortel, approximately 6,000 patents and patent applications encompassing technologies such as wireless, wireless 4G, data networking, optical, voice, Internet, and semiconductors,

3069-574: The Netherlands has become a popular choice, as its company laws have fewer requirements for meetings, compensation, and audit committees, and Great Britain had advantages due to laws on withholding dividends and a double-taxation treaty with the United States. Corporations can legally engage in tax avoidance through their choice of jurisdiction but must be careful to avoid illegal tax evasion . Corporations that are broadly active across

Nortel - Misplaced Pages Continue

3168-455: The Northern Electric research lab, Northern Electric Laboratories (the predecessor to Bell-Northern Research ), started looking into the possibilities of fiber optic cable , and in 1969, began work on digitizing telephone communications. Also in 1969, Northern began making inroads into the U.S. market with its switching systems. In 1972, it opened its first factory in the U.S. in Michigan . In

3267-558: The OLI framework. The other theoretical dimension of the role of multinational corporations concerns the relationship between the globalization of economic engagement and the culture of national and local responses. This has a history of self-conscious cultural management going back at least to the 60s. For example: Ernest Dichter, architect, of Exxon's international campaign, writing in the Harvard Business Review in 1963,

3366-470: The Shearer Street plant, and much of the programming was religious services for the Northern Electric employees and families in the community. In July 1923, CHYC-AM was the first radio station to provide entertainment to the riders of the transcontinental train , in a parlor car fitted with a radio set to receive the broadcast as it left Montreal and traveled west. Later in the 1920s, Northern created

3465-464: The Third World colonies. That changed dramatically after 1945 as investors turned to industrialized countries and invested in manufacturing (especially high-tech electronics, chemicals, drugs, and vehicles) as well as trade. Sweden's leading manufacturing concern was SKF , a leading maker of bearings for machinery. In order to expand its international business, it decided in 1966 it needed to use

3564-601: The Toronto Stock Exchange on June 26, 2009 at a price of $ 0.185 per share, down from its high in 2000 when it comprised a third of the S&;P/TSX composite index. Mike Zafirovski subsequently resigned in August, and Nortel's board of directors was reorganized with three members instead of nine. Nortel handed out $ 14.2 million in cash compensation to seven executives in 2009. Nortel also paid out $ 1.4 million to 10 former and current directors, and paid $ 140 million to lawyers, pension, human resources and financial experts helping to oversee

3663-636: The U.S. applies its corporate taxation "extraterritorially", which has motivated tax inversions to change the home state. By 2019, most OECD nations, with the notable exception of the U.S., had moved to territorial tax in which only revenue inside the border was taxed; however, these nations typically scrutinize foreign income with controlled foreign corporation (CFC) rules to avoid base erosion and profit shifting . In practice, even under an extraterritorial system, taxes may be deferred until remittance, with possible repatriation tax holidays , and subject to foreign tax credits . Countries generally cannot tax

3762-541: The United States sanctions against Iran ; European companies faced with the possibility of losing access to the U.S. market by trading with Iran. International investment agreements also facilitate direct investment between two countries, such as the North American Free Trade Agreement and most favored nation status. Raymond Vernon reported in 1977 that of the largest multinationals focused on manufacturing, 250 were headquartered in

3861-506: The United States scrutinizes foreign investments. In addition, corporations may be prohibited from various business transactions by international sanctions or domestic laws. For example, Chinese domestic corporations or citizens have limitations on their ability to make foreign investments outside China, in part to reduce capital outflow . Countries can impose extraterritorial sanctions on foreign corporations even for doing business with other foreign corporations, which occurred in 2019 with

3960-614: The United States as the largest consumer and guarantor of the existing oil security order. Since the Iraq War, OPEC has had only a minor influence on oil prices, but it has expanded to 11 members, accounting for about 40 percent of total global oil production, although this is a decline from nearly 50 percent in 1974. Oil has practically become a common commodity, leading to much more volatile prices. Most OPEC members are wealthy, and most remain dependent on oil revenues, which has serious consequences, such as when OPEC members were pressured by

4059-461: The United States from 2010. The USA became the leading oil producer, creating tension with OPEC. In 2014, Saudi Arabia increased production to push new American producers out of the market, leading to lower prices. OPEC then reduced production in 2016 to raise prices, further worsening relations with the United States. By 2012, only 7% of the world's known oil reserves were in countries that allowed private international companies free rein; 65% were in

Nortel - Misplaced Pages Continue

4158-629: The United States, 115 in Western Europe, 70 in Japan, and 20 in the rest of the world. The multinationals in banking numbered 20 headquartered in the United States, 13 in Europe, nine in Japan and three in Canada. Today multinationals can select from a variety of jurisdictions for various subsidiaries, but the ultimate parent company can select a single legal domicile ; The Economist suggests that

4257-455: The United States, triggering a 79% decline in its corporate stock price. The bankruptcy case was the largest in Canadian history and left pensioners, shareholders, and former employees with enormous losses. By 2016, Nortel had sold billions of dollars in assets. Courts in the U.S. and Canada approved a negotiated settlement of bankruptcy proceedings in 2017. Alexander Graham Bell conceived

4356-423: The United States. In addition to telephones, four years later, the department started manufacturing switchboards, at first the 50-line Standard Magneto Switchboard. The small manufacturing department expanded yearly with the growth and popularity of the telephone to 50 employees in 1888. By 1890 it had been transformed into its own branch of operations with 200 employees, and a new factory was under construction. As

4455-766: The VOC in 1799, and during the 19th century, other governments increasingly took over private companies, most notably in British India. During the process of decolonization , the European colonial charter companies were disbanded, with the final colonial corporation, the Mozambique Company , dissolving in 1972. Mining of gold, silver, copper, and oil was a major activity early on and remains so today. International mining companies became prominent in Britain in

4554-507: The West to the post-colonial South and invest either in foreign expenditures or ostentatious economic development projects. After 1974, most of the money from OPEC members ceased as payments for goods and services or investments in Western industry. In February 1974, the first Washington Energy Conference was convened. The most significant contribution of this conference was the establishment of

4653-452: The administrators of Nortel's British subsidiary lost their appeal to overturn a court order requiring them to pay £2.1 billion into Nortel's underfunded pension plan. Nortel's U.S. retirement income plan is now managed by PBGC Pension Benefit Guaranty Corporation . In January 2014, a pact between the U.S. and European divisions of Nortel was approved by a U.S. court. However, litigation continued. In April 2016, Nortel went back to court for

4752-469: The behavior of multinational corporations, given that they are effectively "stateless" actors, is one of several urgent global socioeconomic problems that has emerged during the late twentieth century. Potentially, the best concept for analyzing society's governance limitations over modern corporations is the concept of "stateless corporations". Coined at least as early as 1991 in Business Week ,

4851-688: The blame mostly on strategic mistakes and poor management at the company. On January 14, 2009, Nortel filed for protection from creditors, in the United States under Chapter 11 of the United States Bankruptcy Code , in Canada under the Companies' Creditors Arrangement Act , and in the United Kingdom under the Insolvency Act 1986 . Nortel was the first major technology company to seek bankruptcy protection during

4950-742: The collapse of the Shah's regime in Iran. Iran became a regional power due to oil money and American weapons. The Shah eventually abdicated and fled the country. This prompted a strike by thousands of Iranian oil workers, significantly reducing oil production in Iran. Saudi Arabia tried to cope with the crisis by increasing production, but oil prices still soared, leading to the "second oil shock." Saudi Arabia significantly reduced oil production, losing most of its revenues. In 1986, Riyadh changed course, and oil production in Saudi Arabia sharply increased, flooding

5049-512: The companies listed on the Toronto Stock Exchange (TSX), employing 94,500 worldwide, with 25,900 in Canada alone. Nortel's market capitalization fell from C$ 398 billion in September 2000 to less than C$ 5 billion in August 2002, as Nortel's stock price plunged from C$ 124 to C$ 0.47. When Nortel's stock crashed , it took with it a wide swath of Canadian investors and pension funds and left 60,000 Nortel employees unemployed. Roth

SECTION 50

#1732780024686

5148-654: The companies. This occurred in 1960. Prior to the 1973 oil crisis , the Seven Sisters controlled around 85 percent of the world's petroleum reserves . In the 1970s, most countries with large reserves nationalized their reserves that had been owned by major oil companies. Since then, industry dominance has shifted to the OPEC cartel and state-owned oil and gas companies, such as Saudi Aramco , Gazprom (Russia), China National Petroleum Corporation , National Iranian Oil Company , PDVSA (Venezuela), Petrobras (Brazil), and Petronas (Malaysia). A unilateral increase in oil prices

5247-458: The company immediately were rejected by the board of directors. Kunis quit shortly thereafter. At the year's end, directors Lynton "Red" Wilson and John Cleghorn retired from the board. Mike S. Zafirovski , who had served as president and CEO of GE Lighting and then as Motorola President and COO, succeeded Owens as president and CEO on November 15, 2005. Motorola filed a suit against Zafirovski's hiring, alleging that his new position would break

5346-663: The company's bankruptcy proceedings. Nokia Siemens Networks made a stalking horse bid to purchase Nortel's CDMA and LTE assets for $ 650 million. By the July 21 deadline for additional bids, MatlinPatterson and Ericsson had made offers, and Ericsson emerged as the victor in the following auction, with a purchase price of $ 1.13 billion. Avaya won an auction for Nortel's Enterprise Solutions business, including Nortel's stake in Nortel Government Solutions and DiamondWare , for $ 900 million, after having placed

5445-506: The company's efforts on digital technology. Northern Telecom was the first company in its industry to announce and deliver a complete line of fully digital telecommunications products. The product line was branded "Digital World" and included the DMS-100 , a fully digital central office switch serving as many as 100,000 lines, which was a key contributor to the company's revenue for close to 15 years. Starting in 1977, Nortel grew rapidly after

5544-510: The conception was theoretically clarified in 1993: that an empirical strategy for defining a stateless corporation is with analytical tools at the intersection between demographic analysis and transportation research. This intersection is known as logistics management , and it describes the importance of rapidly increasing global mobility of resources. In a long history of analysis of multinational corporations, we are some quarter-century into an era of stateless corporations—corporations that meet

5643-643: The creation of a "world customer". The idea of a global corporate village entailed the management and reconstitution of parochial attachments to one's nation. It involved not a denial of the naturalness of national attachments, but an internationalization of the way a nation defines itself. "Multinational enterprise" (MNE) is the term used by international economist and similarly defined with the multinational corporation (MNC) as an enterprise that controls and manages production establishments, known as plants located in at least two countries. The multinational enterprise (MNE) will engage in foreign direct investment (FDI) as

5742-487: The current largest and most influential companies are publicly traded multinational corporations, including Forbes Global 2000 companies. The history of multinational corporations began with the history of colonialism . The first multi-national corporations were founded to set up colonial "factories" or port cities. The two main examples were the British East India Company founded in 1600 and

5841-481: The firm makes direct investments in host country plants for equity ownership and managerial control to avoid some transaction costs . Sanjaya Lall in 1974 proposed a spectrum of scholarly analysis of multinational corporations, from the political right to the left. He put the business school how-to-do-it writers at the extreme right, followed by the liberal laissez-faire economists, and the neoliberals (they remain right of center but do allow for occasional mistakes of

5940-1065: The first talking movie sound system in the British Empire for a theater in Montreal. During the Great Depression in the 1930s, Northern Electric was affected, like most other companies. From the beginning of 1930 through the end of 1933, sales dropped from $ 34 million to $ 8.2 million, with employees dropping from 6,100 to 2,400. In 1949, an antitrust suit in the U.S. forced AT&T / Western Electric to sell its stake in Northern Electric to Bell Canada. AT&T spun off Northern Electric in 1956. Deprived of its Western Electric tie, Northern began developing its own products. In 1953, Northern Electric produced its first television sets using tubes made by RCA . Bell Canada acquired 100 percent of Northern Electric in 1964; through public stock offerings starting in 1973, Bell's ownership of Northern Electric and its successors would be reduced, though it continued to have majority control. In 1966,

6039-498: The former Chief Operating Officer of Cisco Systems , was hired as president and COO, and was expected to succeed Owens as CEO. Shortly afterward, Daichendt appointed ex-Cisco Chief Science Officer Gary Kunis as chief technology officer (CTO). Both Garys were concerned about the overall direction of Nortel, especially when compared to Cisco, their previous employer. Just three months later, Daichendt resigned after both his restructuring plan and his suggestion that Owens and Currie leave

SECTION 60

#1732780024686

6138-519: The fraud was allegedly to close gaps between its true performance, its internal targets and Wall Street expectations. Nortel settled the case, paying $ 35 million, which the Commission distributed to affected shareholders, and reported periodically to the commission on remedial measures to improve its financial accounting. Nortel announced plans in February 2008 to eliminate 2,100 jobs, and to transfer another 1,000 jobs to lower-cost centres. As part of

6237-416: The hands of state-owned companies that operated in one country and sold oil to multinationals such as BP, Shell, ExxonMobil and Chevron. Down through the 1930s, about 80% of the international investments by multinational corporations were concentrated in the primary sector, especially mining (especially oil) and agriculture (rubber, tobacco, sugar, palm oil , coffee, cocoa, and tropical fruits). Most went to

6336-521: The international oil market. Iran was unable to sell any of its oil. In August 1953, the then-prime minister was overthrown by a pro-American dictatorship led by the Shah, and in October 1954, the Iranian industry was denationalized. Worldwide oil consumption increased rapidly between 1949 and 1970, a period known as the 'golden age of oil'. This increase in consumption was caused not only by the growth of production by multinational oil companies but also by

6435-415: The internationalization of production. For the first time in history, production, marketing, and investment are being organized on a global scale rather than in terms of isolated national economies. International business is also a specialist field of academic research. Economic theories of the multinational corporation include internalization theory and the eclectic paradigm . The latter is also known as

6534-503: The introduction of its DMS line of digital central office telephone switches, especially after the AT&;T breakup in 1984. Northern Telecom became a significant supplier in Europe and China and was the first non-Japanese supplier to Nippon Telegraph and Telephone . In 1983, due to deregulation, Bell Canada Enterprises (later shortened to BCE ) was formed as the parent company to Bell Canada and Northern Telecom. Bell-Northern Research

6633-460: The largest recipients. However, 70% of foreign direct investment went into developed countries in the form of stocks and cash flows. The rise in the number of multinational companies could be due to a stable political environment that encourages cooperation, advances in technology that enable management of faraway regions, and favorable organizational development that encourages business expansion into other countries. A multinational corporation (MNC)

6732-501: The late 1960s and early 1970s, Northern began shipping its first digital switching systems , one of the earliest such systems to be sold. Northern Telecom was, with Bell-Northern Research, in the early 1970s a part owner of MicroSystems International , a semiconductor manufacturer based in Nepean, outside Ottawa. In March 1976, the company name was changed to Northern Telecom Limited, and management announced its intention to concentrate

6831-406: The late 1990s, but the market was soon saturated. When the speculative telecom bubble of the late 1990s reached its pinnacle late in the year 2000, Nortel was to become one of the most major casualties. Nortel's revenues would be dented by a saturated market and the failure of WorldCom , which was a major customer. At its height, Nortel accounted for more than a third of the total valuation of all

6930-474: The laws and regulations of both their domicile and the additional jurisdictions where they are engaged in business. In some cases, the jurisdiction can help to avoid burdensome laws, but regulatory statutes often target the "enterprise" with statutory language around "control". As of 1992 , the United States and most OECD countries have the donot legal authority to tax a domiciled parent corporation on its worldwide revenue, including subsidiaries. As of 2019 ,

7029-628: The manufacturing branch expanded, its production ability increased beyond the demand for telephones, and it faced closure for several months a year without manufacturing other products. The Bell Telephone Company of Canada's (later renamed to Bell Canada) charter prohibited the company to build other products. In 1895, the Bell Telephone of Canada spun off its manufacturing arm to build telephones for sale to other companies, as well as other products, such as fire alarm boxes, police street call boxes , and fire department call equipment . This company

7128-494: The market with cheap oil. This caused a worldwide drop in oil prices, hence the "third oil shock" or "counter-shock." However, this shock represented something much bigger—the end of OPEC's dominance and its control over oil prices. Iraqi President Saddam Hussein decided to attack Kuwait. The invasion sparked a crisis in the Middle East, prompting Saudi Arabia to request assistance from the United States. The United States sent

7227-543: The marketplace such as externalities). Moving to the left side of the line are nationalists, who prioritize national interests over corporate profits, then the "dependencia" school in Latin America that focuses on the evils of imperialism, and on the far left the Marxists. The range is so broad that scholarly consensus is hard to discern. Anti-corporate advocates criticize multinational corporations for being without

7326-608: The mid-1950s. Edward Fleetford Sise was the president and his brother Paul Fleetford Sise was the vice-president and general manager. During the First World War Northern Electric manufactured the Portable Commutator , a one-wire telegraphic switchboard for military operations in the field. In 1922, Northern started to produce, for $ 5, the "Peanut" vacuum tube, which required only a single dry-cell battery. The use of alternating current

7425-560: The price collapse in 1998–1999. The United States still maintains close relations with Saudi Arabia. In 2003, U.S. forces invaded Iraq with the aim of removing the dictatorship and gaining access to Iraqi oil reserves, giving the United States greater strategic importance from 2000 to 2008. During this period, there was a constant shortage of oil, but its consumption continued to rise, maintaining high prices and leading to concerns about "peak oil". From 2005 to 2012, there were advances in oil and gas extraction, leading to increased production in

7524-611: The realities of the needs of source materials on a worldwide basis and to produce and customize products for individual countries. One of the first multinational business organizations, the East India Company , was established in 1601. After the East India Company came the Dutch East India Company , founded on March 20, 1603, which would become the largest company in the world for nearly 200 years. The main characteristics of multinational companies are: When

7623-594: The reductions, Nortel shut down its Calgary campus in 2009. During its reporting of third quarter 2008 results, Nortel announced it would restructure into three vertically-integrated business units: Enterprise, Carrier Networks, and Metro Ethernet Networks. As part of the decentralization of its organization, four executive positions were eliminated, effective January 1, 2009: Chief Marketing Officer – Lauren Flaherty; Chief Technology Officer – John Roese; Global Services President – Dietmar Wendt; and Executive Vice President Global Sales – Bill Nelson. A net reduction of 1,300 jobs

7722-501: The strong influence of the United States on the global oil market. In 1959, companies lowered the price of oil due to a surplus in the market. This reduction dealt a significant blow to the finances of producers. Saudi oil minister Abdullah Tariki and Venezuela’s Juan Perez Alfonso entered into a secret agreement (the Mahdi Pact), promising that if the price of oil was lowered a second time, they would take collective action against

7821-411: The suspicious results, who promptly hired the law firm WilmerHale to vet the financial statements. In late October 2003, Nortel announced that it intended to restate approximately $ 900 million of liabilities carried on its previously reported balance sheet as of June 30, 2003, following a comprehensive internal review of these liabilities. The company stated that the restatement's principal effects would be

7920-525: The technical aspects of the telephone in July 1874, while residing with his parents at their farm in Tutela Heights, on the outskirts of Brantford, Ontario . He later refined its design at Brantford after producing his first working prototype in Boston. Canada's first telephone factory, created by James Cowherd of Brantford, was a three-story brick building that soon started manufacturing telephones for

8019-662: The terms of the non-disclosure agreement he had signed. Nortel agreed to pay $ 11.5 million on his behalf to settle the lawsuit. Nortel also paid out US$ 575 million and 629 million common shares in 2006 to settle a class-action lawsuit that accused the company of misleading investors about the company's health. Currie stepped down as Executive Vice President and CFO in early 2007. In February 2007, Nortel announced its plans to reduce its workforce by 2,000 employees, and to transfer an additional 1,000 jobs to lower-cost job sites. The Securities and Exchange Commission filed civil fraud charges against Nortel for accounting fraud from 2000 to 2003;

8118-550: The two manufacturing companies' integration. Then, in January 1914, the Northern Electric and Manufacturing Company and the Imperial Wire and Cable Company merged into the Northern Electric Company , commonly known simply as Northern Electric. The new company opened the doors on a new manufacturing plant in January 1915. This facility, located on Shearer Street, was the primary manufacturing centre until

8217-496: The world market, jobs for locals, and business and profits for companies. Cecil Rhodes (1853–1902) was one of the few businessmen in the era who became Prime Minister (of South Africa 1890–1896). His mining enterprises included the British South Africa Company and De Beers . The latter company practically controlled the global diamond market from its base in southern Africa. In 1945, the United States

8316-573: The world without a concentration in one area have been called stateless or "transnational" (although "transnational corporation" is also used synonymously with "multinational corporation" ), but as of 1992, a corporation must be legally domiciled in a particular country and engage in other countries through foreign direct investment and the creation of foreign subsidiaries. Geographic diversification can be measured across various domains, including ownership and control, workforce, sales, and regulation and taxation. Multinational corporations may be subject to

8415-503: The worldwide revenue of a foreign subsidiary, and taxation is complicated by transfer pricing arrangements with parent corporations. For small corporations, registering a foreign subsidiary can be expensive and complex, involving fees, signatures, and forms; a professional employer organization (PEO) is sometimes advertised as a cheaper and simpler alternative, but not all jurisdictions have laws accepting these types of arrangements. Disputes between corporations in different nations

8514-697: Was also announced. As its stock price dropped below $ 1, the New York Stock Exchange notified Nortel that it would be delisted if its common shares failed to rise above $ 1 per share within 6 months. Rumours continued to persist of Nortel's poor financial health, amid the late 2000s recession , and its bids for government funds were turned down. There is suspicion that industrial espionage and knockoff Asian products brought down Nortel or at least accelerated its demise. An extensive analysis by University of Ottawa professor Jonathan Calof and recollections of former Nortel executive Tim Dempsey have placed

8613-536: Was criticized after it was revealed that he cashed in his own stock options for a personal gain of C$ 135 million in 2000 alone. CEO John Roth retired in 2001. His planned successor and chief operating officer (COO), Clarence Chandran, already on sick leave due to complications following his 1997 stabbing in Singapore, decided to quit, however. Chief financial officer (CFO) Frank Dunn was eventually chosen as Roth's permanent replacement. Frank Dunn presided over

8712-438: Was enabled by multinational corporations known as the 'Seven Sisters'. The "Seven Sisters" was a common term for the seven multinational companies that dominated the global petroleum industry from the mid-1940s to the mid-1970s. The nationalization of the Iranian oil industry in 1951 by Iranian Prime Minister Mohammad Mosaddegh and the subsequent boycott of Iranian oil by all companies had dramatic consequences for Iran and

8811-448: Was fully aware that the means to overcoming cultural resistance depended on an "understanding" of the countries in which a corporation operated. He observed that companies with "foresight to capitalize on international opportunities" must recognize that " cultural anthropology will be an important tool for competitive marketing". However, the projected outcome of this was not the assimilation of international firms into national cultures, but

8910-538: Was incorporated as the Northern Electric and Manufacturing Company Limited. Northern Electric and Manufacturing Company Limited was incorporated on December 7, 1895. The initial stock capital was $ 50,000 at $ 100 per share, with 93% held by the Bell Telephone Company of Canada and the remainder held by seven corporate directors. The first general stockholders meeting was held on March 24, 1896. In December 1899, The Bell Telephone Company of Canada bought

9009-521: Was jointly owned 50–50 by Bell Canada and Northern Telecom. The combined three companies were referred to as the tricorporate. As Nortel, the streamlined identity it adopted for its 100th anniversary in 1995, the company set out to dominate the burgeoning global market for public and private networks. In 1998, with the acquisition of Bay Networks , the company's name was changed to Nortel Networks to emphasize its ability to provide complete solutions for multiprotocol, multiservice, global networking over

9108-546: Was labeled as "the largest nonviolent transfer of wealth in human history." The OPEC sought immediate discussions regarding participation in national oil industries. Companies were not inclined to object as the price hike benefited both them and OPEC members. In 1980, the Seven Sisters were entirely displaced and replaced by national oil companies (NOCs). The rise in oil prices burdened developing countries with balance of payments deficits, leading to an energy crisis. OPEC members had to abandon their plan of redistributing wealth from

9207-480: Was later extended by an additional $ 27 million. Claiming that the retention bonuses proposal was extraordinary, acting US trustee Roberta DeAngelis objected to the payment of $ 55.6 million to 866 employees. However, court-appointed representatives for Nortel's former employees, who are creditors in the Ontario bankruptcy court, have signed an agreement to not oppose any employee incentive program. GENBAND purchased

9306-449: Was moved into later years, about $ 750 million was pushed forward beyond 2003 and about $ 250 million was wiped away completely. The accounting scandal hurt both Nortel's reputation and finances, as Nortel spent an estimated US$ 400 million on outside auditors and management consultants to retrain staff. To improve its liquidity, in 2003 Nortel arranged a US$ 750 million credit support facility with Export Development Canada . Walter Robinson of

9405-505: Was owned mostly by Bell Canada and the Western Electric Company of the Bell System , producing large volumes of telecommunications equipment based on licensed Western Electric designs. At its height, Nortel accounted for more than a third of the total valuation of all companies listed on the Toronto Stock Exchange (TSX), employing 94,500 people worldwide. In 2009, Nortel filed for bankruptcy protection in Canada and

9504-547: Was sold for $ 4.5 billion to a consortium including Apple , EMC, Ericsson, Microsoft , BlackBerry Limited , and Sony , pending American and Canadian court approval. (Google had placed the initial stalking horse bid of $ 900 million and later upped the bid to $ 1,902,160,540, then $ 2,614,972,128, and eventually $ 3.14159 billion, which are references to Brun's constant , Meissel–Mertens constant , and pi .) Bankruptcy filings state that Nortel owed former Canadian engineers $ 285,000 for patent awards that were not paid. In October 2011,

9603-438: Was still under development during this time. The "Northern Electric Peanut tube was the smallest tube made, and drew only one-tenth of an ampere and was the most remarkable radio frequency amplifier ever made." During the 1920s Northern Electric made kettles , toasters , cigar lighters, electric stoves , and washing machines . In January 1923, Northern Electric started to operate an AM radio station with call letters CHYC , in

9702-513: Was the world's largest oil producer. However, their reserves were declining due to high demand. Therefore, the United States turned to foreign oil sources, which had a significant impact on the recovery of the West after World War II. Most of the world's oil was found in Latin America and the Middle East, particularly in the Arab states of the Persian Gulf. This increase in non-American production

9801-455: Was used by the prosecution as motive for Kathleen's husband, Michael Peterson , to murder Kathleen due to her 1.3 million-dollar life insurance policy (partly provided by Nortel) and the couple's $ 143,000 in credit card debt. After bankruptcy, Nortel's estate faced CA$ 300   million in claims to pay for environmental damage at various sites, including Belleville, Brockville, Kingston and London. Multinational corporation Most of

#685314