Harvard Case - HP and Autonomy: Who's Accountable?
"HP and Autonomy: Who's Accountable?" Harvard business case study is written by Justin J. Hopkins, Gerry Yemen. It deals with the challenges in the field of Accounting. The case study is 16 page(s) long and it was first published on : Feb 27, 2018
This case study solution recommends a comprehensive investigation into the accounting irregularities at Autonomy, followed by a series of actions to address the root causes of the scandal and prevent similar occurrences in the future. This includes a thorough forensic accounting review, a restructuring of HP's M&A process, enhanced corporate governance practices, and a shift in organizational culture to prioritize ethical conduct and transparency.
2. Background
This case study revolves around the controversial acquisition of Autonomy by HP in 2011. The deal, valued at $11.1 billion, quickly soured when HP discovered significant accounting irregularities within Autonomy. These discrepancies resulted in HP writing down the value of Autonomy by $8.8 billion, leading to a major financial scandal and a subsequent legal battle. The key protagonists are:
- Meg Whitman: CEO of HP at the time of the acquisition and subsequent accounting scandal.
- Leo Apotheker: HP CEO who initiated the Autonomy acquisition.
- Mike Lynch: Founder and CEO of Autonomy, accused of orchestrating the accounting fraud.
3. Analysis of the Case Study
This case study can be analyzed through the lens of corporate governance, financial reporting, and M&A due diligence.
Corporate Governance: HP's corporate governance practices were inadequate, leading to a lack of oversight and accountability. The board of directors failed to effectively scrutinize the Autonomy acquisition, relying heavily on management's representations without conducting sufficient due diligence. This lack of oversight allowed the accounting irregularities to go undetected.
Financial Reporting: Autonomy's financial statements were manipulated through a series of accounting maneuvers, including:
- Revenue Recognition: Autonomy improperly recognized revenue from software licenses, inflating its financial performance.
- Cost Allocation: Autonomy shifted costs to future periods, artificially inflating current profitability.
- Asset Management: Autonomy overstated the value of its assets, particularly intellectual property.
M&A Due Diligence: HP's due diligence process was insufficient. The company failed to adequately investigate Autonomy's accounting practices and relied heavily on management representations. This lack of due diligence allowed the accounting irregularities to go unnoticed.
4. Recommendations
Forensic Accounting Investigation: Conduct a thorough forensic accounting investigation to identify the extent of the accounting irregularities and hold those responsible accountable. This investigation should involve external auditors and legal experts to ensure objectivity and credibility.
Restructure M&A Process: Implement a comprehensive overhaul of HP's M&A process, focusing on:
- Enhanced Due Diligence: Conduct rigorous due diligence on all potential acquisition targets, including independent audits of financial statements and a review of internal controls.
- Independent Valuation: Engage independent valuation experts to assess the fair market value of acquisition targets.
- Board Oversight: Increase board oversight of M&A activities, ensuring a robust review process and independent assessment of potential deals.
Strengthen Corporate Governance: Implement a series of measures to enhance corporate governance practices, including:
- Independent Board: Ensure a strong and independent board of directors with diverse expertise and experience.
- Audit Committee: Empower the audit committee with greater oversight of financial reporting and internal controls.
- Whistleblower Protection: Establish a robust whistleblower protection program to encourage employees to report concerns without fear of retaliation.
Culture of Ethics and Transparency: Foster a culture of ethical conduct and transparency throughout the organization. This includes:
- Ethics Training: Implement mandatory ethics training for all employees, emphasizing the importance of ethical decision-making and compliance with accounting standards.
- Code of Conduct: Develop a clear and comprehensive code of conduct that outlines ethical expectations and consequences for violations.
- Performance Indicators: Align employee incentives with ethical behavior and long-term value creation, rather than short-term financial gains.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: These recommendations align with HP's core competencies in technology and innovation, while also promoting ethical conduct and long-term value creation.
- External Customers and Internal Clients: By restoring trust and credibility, these recommendations will improve HP's relationships with external customers and internal clients.
- Competitors: Strengthening corporate governance and financial reporting practices will make HP more competitive in the long run.
- Attractiveness: These recommendations will enhance HP's long-term financial performance by improving its reputation, reducing risk, and creating a more sustainable business model.
6. Conclusion
The HP and Autonomy case study highlights the importance of robust corporate governance, ethical conduct, and thorough due diligence in M&A transactions. By implementing these recommendations, HP can regain the trust of its stakeholders, prevent future accounting scandals, and position itself for sustainable growth.
7. Discussion
Other alternatives not selected include:
- Ignoring the accounting irregularities: This would have been a disastrous decision, leading to further financial losses and reputational damage.
- Merely reprimanding those responsible: This would have been insufficient to address the root causes of the scandal and prevent similar occurrences in the future.
Key assumptions of these recommendations include:
- Commitment from HP's leadership: The success of these recommendations depends on a strong commitment from HP's leadership to implement them effectively.
- Cooperation from stakeholders: The investigation and implementation process will require cooperation from all stakeholders, including employees, auditors, and regulators.
8. Next Steps
- Immediate Action: Initiate the forensic accounting investigation within 30 days.
- Short-Term Implementation: Implement the restructured M&A process and enhanced corporate governance practices within six months.
- Long-Term Implementation: Develop and implement the culture of ethics and transparency program over a period of 12 months.
By taking these steps, HP can address the accounting irregularities at Autonomy, restore its reputation, and position itself for a more sustainable future.
Hire an expert to write custom solution for HBR Accounting case study - HP and Autonomy: Who's Accountable?
more similar case solutions ...
Case Description
Written using public sources, this case uses Hewlett-Packard's (HP) purchase of Autonomy Corporation (Autonomy) to analyze the accounting treatment for the acquisition and subsequent goodwill impairment. While the case focuses on the accounting for mergers and acquisitions, it also provides for a variety of other discussion topics such as the effect of managerial incentives and CEO succession on accounting outcomes, managerial "spin" on disclosure of bad news, strategy in changing institutional environments, and financial reporting limitations of new economy firms with heavy investments in intangible assets. The case opens during the fall of 2011 (when HP purchased Autonomy). Some analysts applauded the shift in strategy that the Autonomy purchase signaled for HP. Others were unsure how Autonomy's cloud computing software fit HP's businesses. From there, events at HP suggested a sense of division and frustration between HP leadership, the board, and Autonomy executives. The board replaced HP CEO Leo Apotheker with Meg Whitman. For the next few quarters, Autonomy missed expected results, and by May 2012, HP removed Autonomy's CEO Michael Lynch. Shortly after, HP announced an impairment charge of $8.8 billion related to the Autonomy acquisition, driving the company to report a loss for the year, the first in 10 years. The HP disclosure emphasized the Autonomy acquisition (which occurred prior to Whitman's tenure as CEO) and accused Lynch and Autonomy executives of cooking the books to inflate the purchase price. However, analysis of the financial statements and related footnote disclosures reveal that this $8.8 billion was less than half the $18 billion total impairment that HP recorded in 2012.
🎓 Struggling with term papers, essays, or Harvard case studies? Look no further! Fern Fort University offers top-quality, custom-written solutions tailored to your needs. Boost your grades and save time with expertly crafted content. Order now and experience academic excellence! 🌟📚 #MBA #HarvardCaseStudies #CustomEssays #AcademicSuccess #StudySmart Write my custom case study solution for Harvard HBR case - HP and Autonomy: Who's Accountable?
Hire an expert to write custom solution for HBR Accounting case study - HP and Autonomy: Who's Accountable?
HP and Autonomy: Who's Accountable? FAQ
What are the qualifications of the writers handling the "HP and Autonomy: Who's Accountable?" case study?
Our writers hold advanced degrees in their respective fields, including MBAs and PhDs from top universities. They have extensive experience in writing and analyzing complex case studies such as " HP and Autonomy: Who's Accountable? ", ensuring high-quality, academically rigorous solutions.
How do you ensure confidentiality and security in handling client information?
We prioritize confidentiality by using secure data encryption, access controls, and strict privacy policies. Apart from an email, we don't collect any information from the client. So there is almost zero risk of breach at our end. Our financial transactions are done by Paypal on their website so all your information is very secure.
What is Fern Fort Univeristy's process for quality control and proofreading in case study solutions?
The HP and Autonomy: Who's Accountable? case study solution undergoes a rigorous quality control process, including multiple rounds of proofreading and editing by experts. We ensure that the content is accurate, well-structured, and free from errors before delivery.
Where can I find free case studies solution for Harvard HBR Strategy Case Studies?
At Fern Fort University provides free case studies solutions for a variety of Harvard HBR case studies. The free solutions are written to build "Wikipedia of case studies on internet". Custom solution services are written based on specific requirements. If free solution helps you with your task then feel free to donate a cup of coffee.
I’m looking for Harvard Business Case Studies Solution for HP and Autonomy: Who's Accountable?. Where can I get it?
You can find the case study solution of the HBR case study "HP and Autonomy: Who's Accountable?" at Fern Fort University.
Can I Buy Case Study Solution for HP and Autonomy: Who's Accountable? & Seek Case Study Help at Fern Fort University?
Yes, you can order your custom case study solution for the Harvard business case - "HP and Autonomy: Who's Accountable?" at Fern Fort University. You can get a comprehensive solution tailored to your requirements.
Can I hire someone only to analyze my HP and Autonomy: Who's Accountable? solution? I have written it, and I want an expert to go through it.
🎓 Struggling with term papers, essays, or Harvard case studies? Look no further! Fern Fort University offers top-quality, custom-written solutions tailored to your needs. Boost your grades and save time with expertly crafted content. Order now and experience academic excellence! 🌟📚 #MBA #HarvardCaseStudies #CustomEssays #AcademicSuccess #StudySmart Pay an expert to write my HBR study solution for the case study - HP and Autonomy: Who's Accountable?
Where can I find a case analysis for Harvard Business School or HBR Cases?
You can find the case study solution of the HBR case study "HP and Autonomy: Who's Accountable?" at Fern Fort University.
Which are some of the all-time best Harvard Review Case Studies?
Some of our all time favorite case studies are -
Can I Pay Someone To Solve My Case Study - "HP and Autonomy: Who's Accountable?"?
Yes, you can pay experts at Fern Fort University to write a custom case study solution that meets all your professional and academic needs.
Do I have to upload case material for the case study HP and Autonomy: Who's Accountable? to buy a custom case study solution?
We recommend to upload your case study because Harvard HBR case studies are updated regularly. So for custom solutions it helps to refer to the same document. The uploading of specific case materials for HP and Autonomy: Who's Accountable? ensures that the custom solution is aligned precisely with your needs. This helps our experts to deliver the most accurate, latest, and relevant solution.
What is a Case Research Method? How can it be applied to the HP and Autonomy: Who's Accountable? case study?
The Case Research Method involves in-depth analysis of a situation, identifying key issues, and proposing strategic solutions. For "HP and Autonomy: Who's Accountable?" case study, this method would be applied by examining the case’s context, challenges, and opportunities to provide a robust solution that aligns with academic rigor.
"I’m Seeking Help with Case Studies,” How can Fern Fort University help me with my case study assignments?
Fern Fort University offers comprehensive case study solutions, including writing, analysis, and consulting services. Whether you need help with strategy formulation, problem-solving, or academic compliance, their experts are equipped to assist with your assignments.
Achieve academic excellence with Fern Fort University! 🌟 We offer custom essays, term papers, and Harvard HBR business case studies solutions crafted by top-tier experts. Experience tailored solutions, uncompromised quality, and timely delivery. Elevate your academic performance with our trusted and confidential services. Visit Fern Fort University today! #AcademicSuccess #CustomEssays #MBA #CaseStudies
How do you handle tight deadlines for case study solutions?
We are adept at managing tight deadlines by allocating sufficient resources and prioritizing urgent projects. Our team works efficiently without compromising quality, ensuring that even last-minute requests are delivered on time
What if I need revisions or edits after receiving the case study solution?
We offer free revisions to ensure complete client satisfaction. If any adjustments are needed, our team will work closely with you to refine the solution until it meets your expectations.
How do you ensure that the case study solution is plagiarism-free?
All our case study solutions are crafted from scratch and thoroughly checked using advanced plagiarism detection software. We guarantee 100% originality in every solution delivered
How do you handle references and citations in the case study solutions?
We follow strict academic standards for references and citations, ensuring that all sources are properly credited according to the required citation style (APA, MLA, Chicago, etc.).