Organizational hazards when a business unit goes rogue: The case of Andersen Consulting

摘要

Andersen Worldwide Societe Cooperative (SC) is a successful organization whose business units Arthur Andersen (AA) and Andersen Consulting (AC) dominate the fields of accounting and consulting, respectively. SC became the world's largest firm in 1983, with both AA (accounting, tax and audit) and AC (consulting) leading their respective industries. The success led to jealousy and greed which fractured SC and eventually led to an official split in December 2000. The article presents an analysis of this split from a governance perspective that accounts for how SC tried to integrate and then control their star business unit, Andersen Consulting. The article begins with a discussion on organizational integration and control, and then three strategic control tactics are introduced that SC implemented to at first integrate and then control AC to better align AC with SC goals and culture. While the strategic control tactics used by SC failed miserably, the context that demonstrates the escalation of AC going rogue (i.e., becoming uncontrollable) is discussed. AC was granted a clear path to separation from SC in court (US District Court, 1998) and the framework discussed illuminates the chronology of failed attempts by SC to prevent this separation. (46 refs.)