Apollo was therefore paying more per student from the top recruiters. Therefore, the commission structure did not make sense from the company's perspective, if we assume that over time only the highest-paid recruiters will remain. It is recommended that the commission structure be scrapped entirely in favor of system that delivers a lower per student payment to recruiters. The company should also fight the allegations of the Department of Education, to mitigate its financial exposure as a result of its past activities. In part, this can help preserve the firm's reputation and show the marketplace that its practices are ethical. The company's position is that the report is inaccurate and based solely on anecdotal evidence (Blumenstyk, 2008) in part, this will help reduce exposure, which could threaten financial results in future years.

Overall, the scandal has only slightly dented the Apollo Group. They must clean it up, of course, but can use the scandal to rid themselves of a financially awkward method of motivating recruiters. The firm can, if it desires, retain this system when operating internationally. In either case, an overhaul of this system will improve the political environment and restore investor confidence. It will also allow the company to lower recruiting costs.

Given the saturation, competition and government scrutiny in the domestic...

A combination of strong international growth and a restructuring of recruiter compensation to lower recruiting costs will help restore investor confidence and eventually the stock price. Apollo has recorded stellar performance and has a strong financial position. The fraud scandal is more of a speedbump than an major impediment to future success and management's strategy should be guided by that fact.
Works Cited

Apollo Group financial data from MSN Moneycentral. Retrieved February 19, 2009 at http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=APOL

Kahn, Chris. (2008). Apollo Group Ordered to Pay $280 million in fraud case. Arizona Daily Star. Retrieved February 19, 2009 at http://www.azstarnet.com/sn/byauthor/220807

Symonds, William C. (2005). Back to Earth for Apollo Group? Business Week. Retrieved February 19, 2009 at http://www.businessweek.com/magazine/content/05_05/b3918112_mz017.htm

Blumenstyk, Goldie. (2008 Judge Overturns $280-Million Verdict Against the Apollo Group. The Chronicle of Higher Education. Retrieved February 19, 2009 at http://chronicle.com/news/article/4938/judge-overturns-280-million-verdict-against-the-apollo-group