Managerial Organization Assignment - Essay Example

The attention of numerous buyers made some hidden truths to depict. The interpretation and treatment of financial accounts was breaching the accounting standards. To make the financial statements appear profitable, WorldCom increased the value of assets by charging and recording its expenses as assets, this reduced the expenses, and the factual figures became attractive. The managers manipulated the receivable figures as well and chose to ignore the evidences relating to receivables. By doing so, the debt figure went down and provisions started to move significantly high resulting in high earnings.

The good will of the company and the brand name was deliberately increased with considerable values. The management was awarding high bonuses on the performances and executives were given heavy loans on the terms of repayment were not decided. The above facts resulted in the shutdown of operation and closure of WorldCom (Info Center, 2007). The organizational theories are the best practices were developed to facilitate the companies and management in order run the organization on the designed path and to evaluate the performance of the company as per the universal framework, the theory.

In the case of WorldCom, many organizational theories could have supported in the detection of corporate failure in the initial stages. Few of the theories will be discussed in this research report. The Theory of Ethics provides guideline regarding the ethical behaviours and means to retain those behaviours in the organization’s culture. This theory focuses on multiple aspects of the organization. It caters the idea of building and enhancing employee trust, fair play, and competition, Transparency in business practices, and reducing the work waste (Lister, 2010).

To build up employee trust the organizational theory of ethics suggests focusing on the working environment and the