Subject category:
Finance, Accounting and Control
Published by:
IBS Case Development Center
Length: 13 pages
Data source: Published sources
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https://casecent.re/p/19411
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Abstract
Adecco, a Forbes 500 Company and a global leader in human resource solutions, is a merger of two of the largest personnel services companies in Europe, Adia and Ecco. On 12 January 2004, Adecco announced that it would delay its results for the year 2003 citing the reason of ''material weaknesses in internal controls'', in its North American branch. The stocks fell, followed by loss of customers and investors'' confidence. While investors filed lawsuits, investigations started. The early investigations revealed that nothing major had really happened that was financially significant. But, getting back the confidence of customers who were switching to its competitors and investors, was expected to become a costly affair. The case throws light on how the communication policy of the company created confusion leading to a public relations disaster. In the wake of Enron and Parmalat debacles, the case provides scope for discussion on how the situation could otherwise have been handled.
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Abstract
Adecco, a Forbes 500 Company and a global leader in human resource solutions, is a merger of two of the largest personnel services companies in Europe, Adia and Ecco. On 12 January 2004, Adecco announced that it would delay its results for the year 2003 citing the reason of ''material weaknesses in internal controls'', in its North American branch. The stocks fell, followed by loss of customers and investors'' confidence. While investors filed lawsuits, investigations started. The early investigations revealed that nothing major had really happened that was financially significant. But, getting back the confidence of customers who were switching to its competitors and investors, was expected to become a costly affair. The case throws light on how the communication policy of the company created confusion leading to a public relations disaster. In the wake of Enron and Parmalat debacles, the case provides scope for discussion on how the situation could otherwise have been handled.