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 di... ... middle of paper ... ...For-Profit Organizations. Retrieved March 20, 2011, from Di Stefano, T. (2005, August 19). WorldCom's Failure: Why Did it Happen? Retrieved March 23, 2011, from http://www.ecommercetimes.com/story/45542.html?wlc=1300920819 Kaplan, R. S., & Kiron, D. (2007). Accounting Fraud at WorldCom. Boston: Harvard Business School Publishing. Maclagan, P. (2007). Hierarchical Control or Individuals’ Moral Autonomy? Addressing a Fundamental Tension in the Management of Business Ethics. , 16(1), 48-61. Niskanen, W. (2002). Enron, WorldCom, and Other Disasters. Retrieved March 23, 2011, from http://www.cato.org/pubs/handbook/hb108/hb108-22.pdf Robbins, S.P., & Coulter, M. (2009). Management (10e ed.). Upper Saddle River, NJ: Pearson Prentice Hall. Sox-Online. (2006). Sarbanes-Oxley Essential Information. Retrieved March 19, 2011, from http://www.sox-online.com/basics.html
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The company has a culture of unquestioning when something wrong surfaced in the company. Take for example the Lockheed documents incident, where the 25000 documents were seen in the company for nearly 3 years before someone voiced his concerns regarding it. This unhealthy culture not only allows unethical practices to prevail, it also hinders company’s growth.
The soft factors can make or break a successful change process, since new structures and strategies are difficult to build upon inappropriate cultures and values. These problems often come up in the dissatisfying results of spectacular mega-mergers. The lack of success and synergies in such mergers is often based in a clash of completely different cultures, values, and styles, which make it difficult to establish effective common systems and structuresBased on the case study, extensive research and annual reports of AT&T the writer has mapped AT&T in the different domains. AT&T should strive to attain a perfect circle as close to the centre as possible, which indicates total synergy, order and equilibrium. Where the circle is skewed drastic change is needed as it moves closer to the outer ring of chaos:
In modern day business, there can be so many pressures that can cause managers to commit fraud, even though it often starts as just a little bit at first, but will spiral out of control with time. In the case of WorldCom, there were several pressures that led executives and managers to “cook the books.” Much of WorldCom’s initial growth and success was due to acquisitions. Over time, WorldCom discovered that there were no more opportunities for growth through acquisitions when the U.S. Department of Justice disallowed the acquisition of Sprint.
Robbins, S.P., & Coulter, M. (2009). Management (10th ed.). Upper Saddle River, NJ: Pearson Prentice Hall.
Robbins, S.P., Coulter, M. (2014). Management (12th ed.). New Jersey: Pearson Education, Inc. [VitalSource bookshelf version]. Retrieved from http://devry.vitalsource.com/#/books/9781269550994/recent
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Robbins, S. P., & Coulter. M. (2014). Management (12th ed.). Retrieved from: Colorado Technical University eBook Collection database.
Wren. (2005). The History of Management Thought (5th ed.). Danvers, MA: Wiley & Sons. (Original work published 1976)
From the time of WorldCom’s inception there always seemed to be a tradition in management as if the company was only 100 or so employees. There was a “good old boys” mentality among the limited few running the company and if you were outside that circle then were told only what they wanted you to hear. An unspoken rule among employees was to do what you were told without questions or risk the consequences. One example of this situation occurred when senior management member Gene Morse told an employee “If you show those damn numbers to the f****ing auditors, I’ll throw you out the window” (Kaplan, R.S., & Kiron, D., 2007, p. 3).WorldCom showed no concern regarding an employee’s need and obligation to voice concerns on matters related to their job function. “Employees felt they did not have an independent outlet for expressing concerns about company policies or behavior” (Kaplan et al., 2007, p. 3). This treatment created a climate of fear among employees and reinforced the management team’s ability to keep knowledge and decision making within their grasp.
Robbins, S. P., & Coulter, M. (2012). Management (11th ed.). Retrieved from the University of
Robbins, S, DeCenzo, D, Coulter, M & Woods, M 2011, Management: The Essentials, Pearson Australia, NSW, Australia, 1st Edition
Shaw, W. H., & Barry, V. (2011). Moral Issues in Business (Eleventh ed., pp. 230-244).
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