Essay about Worldcom: Organizational Culture and Unethical Safeguards

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WorldCom: Organizational Culture and Unethical Safeguards Organizational culture is one of four influences whether an ethical or unethical behavior will be made. WorldCom’s demise, deliberately overstating their income by $7 billion between 1999 and 2002; and their once valued stock of $180 million becoming nearly worthless, can attribute a significant amount of their failure on their “dis”organizational culture. Corporations worldwide who do not think this type of fraud can happen at the hands of a relatively small amount of people, are completely wrong. Bernie Ebbers, Chief Executive Officer, and Chief Financial Officer, Scott Sullivan’s classical view of social responsibility was the beginning of the end for WorldCom; this…show more content…
Ebbers’ belief that his only social responsibility was to maximize profits left him floundering, “Ebbers appeared to lack a strategic sense of direction and the company began drifting” (Kaplan & Kiron, 2007, p. 3).
Affects of Growth on Corporate Culture The rapid growth led to changes in people and culture. WorldCom’s finance department consolidated incompatible information of more than 60 acquired companies, “stitch[ing] it together like Frankenstein's monster from pieces of the many firms he acquired over the past two decades” (Lewis, 2002, para. 5). Not only did the finance department in Mississippi struggle, other departments that needed to communicate on a daily basis were not even in the same state. Headquarters of network operations were in Texas; human resources department was in Florida and the legal department was in Washington D.C. According to Kaplan and Kiron (2007), “each department had its own rules and management style. Nobody was on the same page. In fact, when I started in 1995, there were no written policies” (p. 3).
And things got worse: in 1999, when the fraud accounting records can be traced back to, Ebbers and Sullivan rewarded loyal employees particularly in the accounting and financial teams above the company’s approved salary and bonus guidelines. When complaints arose there was no independent avenue for questions; human resources rarely objected to special bonuses and the internal audit reported directly to Sullivan.
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