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Business Analysis: World Com Inc.

1135 words - 5 pages

Imagine if you would, being a brand new business school graduate and being offered the opportunity to work for one of the largest and most prestigious company in the United States. Not only that, at WorldCom, you may be "granted compensation beyond the company's approval salary and bonus guidelines."(Kaplan & Kiron, p. 3) If you are exceeding more talented, you could be like the CEO who "in addition to his full-time job [...] was managing several unrelated businesses."(Kaplan & Kiron 2007, p. 11) It is fair to say that a majority of job seekers, to say the least, would jump at the opportunity to perform in that role and within that culture of aggressive performance and rewards. After all, being in a reputable organization that has an identifiable culture or "shared values, principles, traditions, and ways of doing things that influenced the way organizational members act," (Robbins & Coulter, 2009, p. 46) while making a comfortable living, would be a dream come true. However, things are not always what they seem once you go beyond the surface.
The organizational culture promoted flexibility in shady decision-making and a doing whatever-it-takes attitude towards hitting their Wall Street financial forecast. This very nature of unscrupulousness contributed to the well-known ethical accounting breaches that are forever associated with WorldCom. When you have a culture or a group that rewards employees who do whatever is necessary, regardless of who they hurt, an environment filled with mistrust and immoral practices develops. The ethical boundaries were also blurred and the other "employees [who] knew about or were concerned about fraud were too afraid to report it."(Accountingweb, 2003) Additionally, "employees felt that they did not have an independent outlet for expressing concerns about company policies or behavior."(Kaplan & Kiron 2007, p. 3)
The organizational culture at WorldCom encouraged "a systemic attitude conveyed from top down that employees should not question their superiors."(Kaplan & Kiron 2007, p. 3) Therefore, employees chose loyalty to the company and received large compensation packages. The CEO himself viewed the "company effort to create a corporate code of conduct [...] a 'colossal waste of time."(Kaplan & Kiron 2007, p. 3) During the investigation that resulted, "blame for the company’s demise [was] placed on the shoulders of founder and Chief Executive Officer Bernard J. Ebbers. The reports accuse him of running a company so concerned about meeting Wall Street expectations that warnings about accounting irregularities were met with scorn and ridicule."(Accountingweb, 2003) With the leader of the company showing a disregard for ethical practices, he created an organizational culture that executed his vision without question.
The organizational culture at WorldCom created intensity on performance at all cost. A closer examination revealed that "throughout much of 2001, WorldCom’ s Business Operations and Revenue...

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