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Nortels Downfall Was Due to Pride?

Has bankrupt Nortel Networks Corp. (NT) made it this far thanks to a narcissistic approach to business? That’s the contention of an analyst for Garson Lehrman Group.

Samuel Greenholtz wrote yesterday that Nortel deserves to slip into oblivion because of its “hubris,” an inflated sense of self-confidence that began when Nortel “forced the great Western Electric to allow its switches to be sold to the Bell companies.” As dominant carriers were pushed into buying Nortel products, the company’s downfall was set in motion, Greenholtz said, aided by a sense that the company could do no wrong.

“In corporate history, there may never be another company that will ever rival it as a marketing machine,” Greenholtz wrote. “No other supplier could sell vaporware so successfully. From an engineering standpoint, it never came close to duplicating its achievement with the DMS product line. It was just about a one-hit wonder that was able to take advantage of a business that prized incumbency so much – and so it was able to stick around for a very long time.”

Greenholtz ends the column with this: “A firm so deeply rooted in disingenuousness that has led to enormous distress in the telecom space will be thankfully gone.”

But isn’t it too easy to attribute an institution’s ruin to excessive pride? Oh wait, there was Rome. Okay, so, perhaps hubris, over-entitlement and a superior attitude are the key reasons for Nortel’s demise.


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