Industry Specific Changes. The Telecommunications Industry

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Industry Specific Changes The telecommunications industry experiences a substantial growth throughout the 90s due to the growing Internet traffic, the creation of the broadband network, and the passing of the 1996 Telecommunications Act. Industry experts expect substantial growth as well as the expansion of wireless and wire line networks. However, things did not go as expected and when supply bypasses demand, prices ultimately fall. The 1996 Telecommunications Act ends monopolized telephone services and opens up the barriers to entry. The new regulation also impacts how companies charge their customers. The growing competition leads to the decline in prices and customers. The 2000 downfall introduces proposals that aim to increase…show more content…
The merger’s denial ultimately leads to WorldCom’s downfall (Eichenwald 2002). Behaviors During the decline of the company’s bottom-line, WorldCom upper-level management feel the financial pressure to provide favorable results to the shareholders. In addition, WorldCom’s acquisition of Sprint is temporarily halted. Two of WorldCom’s mid-level managers, Troy Normand and Betty Vinson rectify part of the problem with decreasing line costs by increasing assets. The pair feels guilty about their transgression as well nervous over the impending deadline. An additional problem emerges and the two reach out to CFO Scott Sullivan for further instructions. He instructs Normand and Vinson to fix the remaining errors with using the company’s excess reserves. Sullivan mentions that the error can fix itself over time as long as everything matched up with the expectations of auditors and Wall Street. The guilt between the two mid-level managers continues to grow, but Sullivan praises their work and loyalty to the company. In fear of losing both their jobs and financial security, the pair complies with Sullivan’s order despite their better judgement (Alvarez 2013). After instructing Normand and Vinson to “cut corners” and make the changes, Sullivan needs to fix the error before someone finds it. His first step is delay Cynthia Cooper’s internal audit by constantly asking her to wait a while. Even though
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