Worldcom Failure

1198 Words Feb 23rd, 2011 5 Pages
WorldCom 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. Some may argue that success is based on being at the right place at the right time with the right idea and the right amount of money. Other may debate that success is based on hard work and ethics that are accompanied by many failed attempts before
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A large loan to senior executives epitomizes about conflict of interest and breach of fiduciary duty.
WORLDCOM SCANDAL INVESTIGATION RESULTS
Evidence shows that the accounting fraud was discovered as early as June 2001, when several former employees gave statements alleging instances of hiding bad debt, understating costs, and backdating contracts. However, WorldCom’s board of directors did not investigate these claims. Although employees and investors look for individual culpability, WorldCom’s organizational structure, group processes, and culture contributed to the fraud and length of time over which it occurred. The SEC’s investigation into the accounting fraud at WorldCom turned up several key players. The following is a list of high-ranking WorldCom executives and other employees who were implicated on the accounting fraud: * Bernard Ebbers - former CEO of WorldCom. Suspected in accounting fraud but no charges have been filed against him yet. * Scott Sullivan - former CFO of WorlCom. Indicted on charges of securities fraud, conspiracy, and false statements to the SEC. * David Myers - former controller of WorlCom. Charged with securities fraud, conspiracy, and false statements to the SEC. * Buford Yates Jr. - former director of general accounting. He pled guilty to charge of securities fraud and conspiracy. * Betty Vinson - former director of management reporting. Pled guilty to charges of conspiracy to commit securities

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