Yahoo Reaction Paper

Topics: Computer science, Decision making, Shareholder Pages: 6 (1326 words) Published: January 31, 2015
Reaction Paper – Yahoo! C.E.O. Resigns Over Padded Resume On the 13th of May, 2012, the Yahoo! C.E.O, Scott Thompson decided to part ways with the company. His reason for resignation: he had had surgery for thyroid cancer several weeks earlier and was on medication which in turn could affect his performance as C.E.O. However, this event was the culmination of a tumultuous period at Yahoo! And if I were a decision maker in this case, aware of the recently opened can of worms, I would have definitely asked Thompson to resign. On the 3rd of May, 2012, Daniel Loeb, Yahoo’s largest external shareholder, who then controlled 5.8% of the company through his hedge fund – Third Point, launched an attack on Yahoo! and its new C.E.O., alleging that Scott Thompson had lied on his resume about his academic qualifications. This was a result of a proxy war between Yahoo! and Loeb, who being a major stakeholder, wanted his choice of candidates on the board and saw Thompson as an obstacle. These allegations snowballed into a huge crisis during a trying period for the organisation. After rejecting a profitable takeover bid from Microsoft, steep competition from other internet giants and top level management issues, this situation weakened the company further. Thompson, in his resume, claimed to have a college degree in accounting and computer science from Stonehill College near Boston. This “claim” was published on the company’s bio and annual report, a legal document whose validity and authenticity is confirmed by the CEO. He even certified these degrees in the Securities and Exchange Commission filings. After receiving Loeb’s letter stating that Thompson only had an accounting degree from Stonehill and the college didn’t even offer a computer science degree at the time, Yahoo! initiated an investigation. Upon receiving the findings of the investigation, Yahoo! conceded that Thompson in fact only had an accounting degree and called the mistake an “inadvertent error”. Fudging information on one’s resume is something that many people indulge in, in order to make their profiles appealing especially in competitive job markets, a place where they fear loss to other capable candidates. Scott Thompson probably didn’t need to lie about this particular qualification as he was in fact more than capable to lead Yahoo! given his past experiences in technology firms like PayPal and Visa. In my opinion, one of the most important methods of moral reasoning that one must adopt while making any professional or even personal decision, is the Rawlsian Liberalism moral method. As Mihnea Moldoveanu rightly suggests, one should keep in mind that the decisions you make could eventually decide your social position in the future. This future could not just have a positive or negative effect on you, but also the others who depend on and matter to you. Had Scott Thompson followed this method while making his resume as opposed to just a consequentialist approach, it is very likely he wouldn’t have found himself in such a controversy. This saga did not just affect him, but also the organisation, its shareholders and employees. Since Loeb first revealed Thompson’s padded resume, Yahoo’s shares fell by around 3%. Since his tenure began, Thompson began to cut costs by laying off almost 14% of the Yahoo! workforce, most of whom were in fact engineers and computer science graduates. Although the “Resume-Gate” seemed to some a minor error blown out of proportion, several disgruntled Silicon Valley employees questioned how they could work for an organisation where the C.E.O. claimed to be a computer scientist and actually wasn’t. Employee and share-holder morale was at an all-time low, a situation caused by a decision made many years ago, which Thompson probably thought would never come back to haunt him. Thompson is not alone. There have been other C.E.O’s who have lied about their credentials in the past and some have almost got away with it. Ronald Zarrella, C.E.O of...

Citations: Yarow, Jay. "Dan Loeb: Yahoo CEO Scott Thompson Is Lying About His College Degree." Business Insider. Business Insider, Inc, 03 May 2012
Temin, Davia. "Little Lies; Big Lies - Yahoo! CEO Scott Thompson 's Revisionist History." Forbes. Forbes Magazine, 03 May 2012
Pepitone, Julianne. "Yahoo CEO Scott Thompson out after Resume Scandal." CNNMoney. Cable News Network, 13 May 2012
Rushe, Dominic. "Embattled Yahoo CEO Scott Thompson Reportedly Set to Quit over Fake Resume." www.theguardian.com. Guardian News and Media, 13 May 2012
Brown, Abram. "Yahoo CEO Thompson Quits Amid Furor Over Bogus Resume." Forbes. Forbes Magazine, 13 May 2012 
Jacobs, Deborah L. "The High Price of Career Lies." Forbes. Forbes Magazine, 13 May 2012
Stewart, James B. "In the Undoing of a C.E.O., a Puzzle." The New York Times. The New York Times, 18 May 2012
Moldoveanu, Mihnea. “Managerial Models and Methods for Moral Reasoning.” Foundations for Business Ethics, September 2012
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