Ethical Ethics Case Study : Worldcom's Code Of Ethics

Military social workers are faced with unique challenges, as they have to not only follow the NASW Code of Ethics, but also the mission of the military. A social worker faced with this scenario has an ethical dilemma, as it involves the ethical issues of self-determination, as well as privacy-confidentiality. According to the NASW Code of Ethics, social workers encourage clients’ self-determination and help improve clients’ abilities and opportunity to change and to address their own needs (2008). The social worker in the scenario is faced with another dilemma, if they report the drug use will this cause harm to the client.

List the specific ethical principles from the NASW Code of Ethics and identify those legal duties that you believe apply to the case.

The stakeholders in this fraudulent case of WorldCom consist of Bernie Ebbers, Scott Sullivan, Buford Yates, David Myers, Cynthia Cooper, and Betty Vinson belong to the company. While the other stakeholders would consist of the creditors, Andersen (accounting firm), investors, and the public. This fraudulent act committed within WorldCom impacted every single stakeholder in a way. Either in a negative or positive way, most of the impact was caused with harm to everyone. The main individuals such as Ebbers, Sullivan, and Vinson all had major consequences as resulting with the fraud. Criminal trials were a major result with their fraudulent acts within WorldCom. Cooper was a lifesaver by most of the community. Aside from these individuals, the rest also got affected by the fraud. Investments conducted by the investors were all lost within the fraud process. The impact towards much of the image for Andersen was ruined. Many of the public lost their trust on the honesty and professionalism of Andersen and other certified public accounting firms. The entire employees from the top management to the smaller group of workers stayed unemployed and some with criminal punishment.

For the CRCC Code of Ethics it can better guide individuals in this certain situation. After reviewing the CRCC Code of Ethics there was several areas of CRCC Code of Ethics which could be applicable in this situation. The first section that could be applicable would be Part A section 3 of which will allow the counselors to form a limitation, rights and guidance for the client. For example in this situation the child is not adjusting to school and by forming a guideline for the student it can show how the student could better cope. The next section that could be applicable would be Part A section 4 of which avoiding harm to the client. For example this student did acquired a spinal cord inquiry and having a hard time adjusting to school however by being a recent graduate student the values and beliefs might be different versus someone whom has been on the job for a couple of years. Another area of the CRCC Code of Ethics that could give guidance would be all of section B. Since in this area of the CRCC Code of Ethics is based upon some of the most important aspects of dealing with clients which are the confidentiality, privileged, communication and privacy of the clients.

According to Johnson (2012) leaders are powerful role models, and policies will have a little effect if leaders do not follow the rules they set. In Enron case, corruption and ethical misconduct were deeply embedded in their business culture where profitability was more important than ethics. In this paper, I will address the factors that had led to the development of the culture of profit before principle at Enron. Also, I will create my personal code of ethics that will guide me in my professional and personal decision making and doing the right thing when faced with ethical challenges.

This leads into my second pressure, which deals with personal lives. Employees were receiving tremendous benefits due to the company’s great performance. However, if the company did not improve, people’s salaries would be cut or even worse, their jobs would be cut. That is why so many people were willing to engage in the fraud, because they felt WorldCom was supplying a salary and benefits that other companies would not be able to match. Betty Vinson was a prime example. She knew that releasing line accruals was wrong, but needed to

Due to these criminal activities, many top executives were convicted fraud and sentenced to spend time in prison. WorldCom activities did not align with the company's overall mission and goals. The actions taken by management were not in the best interest of the customer instead they were consumed with acquisitions and increasing the value of WorldCom Shares. The management also should have considered general accounting practices during their strategic planning. Furthermore, create procedures that protect all stakeholders within the firm.

5. Consider the characteristics of the ethical leader in chapter 3. How does such a leader encourage ethical behavior among managers and employees, and at the same time obtain successful organizational results? Could Ebbers have used these characteristics to accomplish his goals at WorldCom?

It is only during moral lapses and corporate scandals that interest groups and the broader public ask themselves the fundamental ethical questions, who are the managers of the organization and were they acting with the ethical guidelines. For a long time, the issue of ethics was largely ignored, with organizations focusing on profit maximization. However, this has changed, and much attention is now focused on ethics management by researchers and leaders. The issue of ethics has arisen at a time when public trust on corporate governance is low, and the legitimacy of leadership is being questioned. Leaders are expected to be the source of moral development and ethical guidance to their employees.

On March 15, 2005 former CEO of WorldCom, Bernard Ebbers sat in a federal courtroom waiting for the verdict. As the former CEO of WorldCom, Ebbers was accused of being personally responsible for the financial destruction of the communications giant. An internal investigation had uncovered $11 billion dollars in fraudulent accounting practices. Later a second report in 2003 found that during Ebber’s 2001 tenure as CEO, the company had over-reported earnings and understated expenses by an astonishing $74.5 billion dollars (Martin, 2005, para 3). This report included the mismanagement of funds, unethical lending practices among its top executives, and false bookkeeping which led to loss of tens of thousands of its employees.

“It is important for leaders to tell a compelling and morally rich story, but ethical leaders must also embody and live the story. This is a difficult task in today’s business environment where everyone lives in a fishbowl—on public display. So many political leaders fail to embody the high-minded stories they tell at election time, and more recently, business leaders have become the focus of similar criticism through the revelations of numerous scandals and bad behaviours. CEOs in today’s corporations are really ethical role models for all of society.”

WorldCom was the ultimate success story among telecommunications companies. Bernard Ebbers took the reigns as CEO in 1985 and turned the company into a highly profitable one, at least on the outside. In 2002, Ebbers resigned, WorldCom admitted fraud and the company declared bankruptcy (Noe, Hollenbeck, Gerhart, &Wright 2007). The company was at the heart of one of the biggest accounting frauds seen in the United States. The demise of this telecommunications monster can be accredited to many factors including their aggressive-defensive organizational culture based on power and the bullying tactics that they employed. However, this fiasco could have been prevented if WorldCom had designed a system of checks and balances that would have

P., & Coulter, M. K., 2012, p. 152), although it seems none of WorldCom’s executive management team seemed to feel this way. Many steps could have been taken to prevent the collapse of the WorldCom empire, but only a few key managers held the power and none were willing to take action. One control that did not exist in WorldCom’s culture was allowing both internal and external auditors access to all necessary documents and statements. Without full disclosure of these items no one could see how many risks the company was taking by making fraudulent entries against their books. Also the external audit team, Arthur Anderson, held WorldCom as one of its best customers which was a major conflict of interest. This relationship lead to many fundamental mistakes from Anderson not keeping pressure on WorldCom and getting all vital information that would prove how poorly the company was being run. Had they been operating transparently, auditors and employees would have seen the accounting deception and could potentially have stopped it prior to the company’s collapse. In addition, by employing multiple auditing firms many of the mistakes being made may have been caught and discontinued from the beginning.

I believe that the proposals will not be effective in preventing another WorldCom for several reasons. First, I believe that many companies operate within their own “corporate bubble” and that many officers and directors probably believe that the problems at WorldCom could never occur at their company. Because of this, they will largely ignore the corporate structural undertakings of companies around them. Next, very few boards will voluntarily shake things up at their company, especially if their growth and financials are positive. With the highly competitive nature of many industries, I can’t imagine too many company taking preemptive steps to change their corporate governance during a period of success, but in the case of WorldCom, ironically this successful growth period is exactly where they uncovered the wrongdoing. As a shareholder, you should always be asking questions about a company’s performance, even when they are outperforming. While Breeden’s proposal is certainly an outline for corporate governance success, due to human nature, the principle-agent problem will exist within companies that have less-than-reputable directors and officers. Another reason this report won’t stop another WorldCom from happening is that there is an inherent flaw in our corporate structure that doesn’t exist in the corporate structures in countries such as Japan and Germany. In those countries, the shareholder is not the primary stakeholder that a company looks to satisfy, but

There were several people responsible for the WorldCom scandal, as well as, whistleblowers that first discovered the accounting fraud. The former CEO, Bernard Ebbers was found to be the main offender of the fraud. He did it by capitalizing inflated revenues with phony accounting entries and he was eventually sentenced to 25-years for fraud, conspiracy and filing false documents with regulators. Scott Sullivan, the former CFO, pleaded guilty to one count of conspiracy to commit securities fraud and was sentenced to 5-years after testifying against Bernard Ebbers. The former Director of General Accounting, David Myers, pleaded guilty to