MiniScribe made drives for PCs. It stumbled during an industry shake, but was rescued by a turnaround specialist. The turning point seemed to be spectacular, but it was only an illusion. After four years of reported successes, the company announced that all prior statements were inaccurate and huge losses wiped out all equity. In the subsequent investigation, it was revealed that a large number of employees had given in seemingly extraordinary pressure … Read more »

MiniScribe made drives for PCs. It stumbled during an industry shake, but was rescued by a turnaround specialist. The turning point seemed to be spectacular, but it was only an illusion. After four years of reported successes, the company announced that all prior statements were inaccurate and huge losses wiped out all equity. In the subsequent investigation, it was revealed that a large number of employees had collapsed in seemingly extraordinary pressure for results and has had to increase a number of fraudulent schemes profits. Perhaps the most bizarre scheme was to pack stones and send them as hard disks. Sixteen persons were sanctioned by the U.S. SEC and the investment bankers and auditors were sued significant damage.
This is a Darden case study.
«Hide

from
Robert J. Sack,
Kristi Severance,
Roger Johnson K
Source: Darden School of Business
29 pages.
Publication Date: Feb 24, 1998. Prod #: UV0381-PDF-ENG
MiniScribe company HBR case solution

[related_post themes="flat"]