Worldcom Failure - 1194 Words

Examining a Business Failure: WorldCom WorldCom was one of several large companies that failed because of inadequate organizational leadership, fraud, conspiracy, falsifying documents, and embezzlement. WorldCom has been classified as being â€Å"one of the biggest corporate scandals in Unites States history† (Zekany, 2004, p. 101). In 2001, the company’s financial condition began to decline due to the slowing telecommunications industry, which eventually put pressure on the company’s executive officers to increase profits (Jonesington, 2007, p. 1). Unfortunately, the executive officers made decisions to commit accounting fraud by falsifying documents to reflect a positive cash flow rather than a negative one. All the individuals†¦show more content†¦5) before using rationale. Based on this viewpoint, only emotionally based influences can generate outstanding achievements of organizations (Yukl, 2006, p. 5). Management The role of a manager is not as easy to define as the role of a leader. Researchers use descriptive methods such as interviews, diaries, and observations to discover the roles and responsibilities of a manager (Yukl, 2006, p. 23). The research results indicate managers work long hours, give and receive large amounts of information, and spend a substantial amount of time with people other than direct subordinates (Yukl, 2006, p. 23). Research also indicates the common practice of making important decisions with the support and authorization of different people at different management levels in different subunits of the organization (Yukl, 2006, p. 26). In contrast, Ebbers and Sullivan established a â€Å"corporate culture in which leaders and managers were not to be questioned or second-guessed† (Zekany, 2004, p. 103). As a result, no single leader or manager was held accountable for his or her decision to falsify documents, commit fraud, and conspiracy. In a crisis situa tion such as WorldCom’s, the pressure to perform the task of increasing revenue was evident. Research indicates when a group of people is under tremendous pressure to perform a difficult task, they expect their leaders and managers to beShow MoreRelatedWorldcom Failure1198 Words   |  5 PagesWorldCom Failure in relation to its Organizational Behavior LDR/531 - Organizational Leadership October 7, 2010 WorldCom Failure in relation to its Organizational Behavior INTRODUCTION Year 2002 saw an unprecedented number of corporate scandals: Enron, Tyco, Global Crossing, etc. In many ways, WorldCom is just another case of failed corporate governance, accounting abuses, and outright greed. Many people may question if there is a secret to operating a successful business in modern times.Read MoreAccounting And Business Issues : Worldcom s Failure891 Words   |  4 PagesSection #3. Accounting and business issues WorldCom’s failure should be attributed to the following problems and reasons. At first, it should be pointed out that, from a small company to one of the biggest communications provider in the world, frauds went through WorldCom’s growth. Aggressive acquisition by leverage together with creating false decent financial statements had been WorldCom’s main strategy for fast growth when, in fact, it failed to create commensurate value by its own businessRead MoreBusiness Failure of Worldcom in the Light of Organizational Behavior Theories1313 Words   |  5 PagesExamining Business Failures Business Failure of WorldCom in the Light of Organizational Behavior Theories Abstract Business failures occur usually due to lack of organizational leadership and unethical practices prevalent within an organization. Managers and leaders tend to be a lighthouse for any organization and if they adopt unethical ways, then the entire organization suffer from extreme loss and disgrace. WorldComs bankruptcy scandal is a big example of business failure which was linkedRead MoreThe First Decade Of The 21st Century Has Witnessed An Astonishing Number Of Large Scale Corporate Failures2048 Words   |  9 PagesCHAPTER 1 INTRODUCTION The first decade of the 21st century has witnessed an astonishing number of large-scale corporate failures in two spates. The first wave came with the Dot.Com bubble (2000-2002), which led to many high profile corporate collapses including Enron and Worldcom, Global Crossing in the United States, HIH and One.Tel in Australia, Parmalat in Italy, Vivendi in France and Royal Ahold in the Holland, which brought the global economy close to recession (Barney 2009, Hill 2006, SoltaniRead MoreMission, Vision, Values, And Core Competencies Of Worldcom Inc. Essay1031 Words   |  5 Pages WorldCom Inc. An organization must set robust mission, vision, and value statements that have their functions in the strategic planning process. Another concept that plays a vital role is core competencies; they are capabilities that provide the organization a competitive advantage to ensure success in the marketplace. Strategic goals help organizations in prioritizing daily tasks, choosing achievements with measurable milestones and a purposeful direction. The purpose of the organization is toRead MoreEssay on Worldcom1595 Words   |  7 PagesRestoring Trust in WorldCom 1. What are the three or four central objectives that Breeden hopes to achieve with the proposals in â€Å"Restoring Trust†? Why is reform needed? What are the benefits? What are your concerns regarding the reform? The WorldCom Corporate Monitor, Richard Breeden, believed that in order to correct the ills that faced the company, WorldCom needed to adopt a strong Corporate Governance structure. The central objectives of his proposal â€Å"Restoring Trust† included improvingRead MoreEthics Research Essays984 Words   |  4 PagesHow leaders allocate rewards and status †¢ How leaders recruit, select, promote, and excommunicate (p. 246) The failure of Andersen and its clients to excel in these six areas of leadership caused the collapse of several business giants. Arthur Andersen is most closely associated with the collapse of Enron Corporation in 2001. However, Enron was not the firm’s first or only failure. â€Å"Enron was hardly the first corporate scandal in which Arthur Andersen was implicated. Three of the five largestRead MoreCompany Scandals Underpinned By Non Conformity And Accounting Principles1183 Words   |  5 Pagesbusiness owners, shareholders, the government and accountants to understand the financial position of a company. A failure to apply appropriate accounting principles can lead to inaccurate reports being used in business decision making. This may result in inappropriate investment and business decisions and lead to collapses as evidenced by the scandals surrounding One-Tel and Worldcom. Accountants employed by these business have been found to have acted unethically by manipulating the financial accountsRead MoreThe Accounting Fraud At Worldcom Essay1349 Words   |  6 Pagesthe consequences. One example of t his situation occurred when senior management member Gene Morse told an employee â€Å"If you show those damn numbers to the f****ing auditors, I’ll throw you out the window† (Kaplan, R.S., Kiron, D., 2007, p. 3).WorldCom showed no concern regarding an employee’s need and obligation to voice concerns on matters related to their job function. â€Å"Employees felt they did not have an independent outlet for expressing concerns about company policies or behavior† (KaplanRead MoreWorldcom Case Study1535 Words   |  7 PagesWorldCom Case Study: Lack of Leadership, Lack of Ethics Emily Fearnow ORG 500- Foundations of Effective Management Colorado State University – Global Campus Dr. Cheryl Lentz May 15, 2011 WorldCom Case Study: Lack of Leadership, Lack of Ethics A multitude of choices made by executives at WorldCom led to the ultimate demise of the company as it was previously known, the employees and their livelihoods’, and the trust of the American people. In a time when corporations