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It is believed that these unethical issues were primarily not checked upon by anyone because the CEO of the company himself was involved in the fraudulent activities. These unethical issues and different management techniques recommended to improve the corporate governance of WorldCom would be outlined in this essay (Backover 2002; Crawford 2005).
There were three major problems with the corporate culture and their style of working. The first one was the way they grew through aggressive acquisition of companies, second was the strategy of senior executive loans and the third and foremost was the way in which they did business which was against the code of corporate governance and had exposed them to threats related to fair and arm’s lengths transactions (Kiron et al 2004; Securities and Exchange Commission 2003)
Business Ethics form an important part of the culture of the businesses. They are very important when it comes to the normal functioning of businesses in this world. The company had made almost 65 acquisitions or mergers in only 6 years. Integrating is a lengthy process, time consuming and a very challenging exercise as there may be people who may resist these changes and create problems. The second aspect is to integrate financially by the use of the generally accepted accounting principles. It is believed generally that because of these practices of integration WorldCom was successfully able to hide its practices. The unethical issues in the company arose when the company started to face problems from the decreasing demand of telecommunications. It is then believed that the senior executives of the company were involved in fraudulent activities. (Kiron et al 2004; Worldcom Website 2010; Securities and Exchange Commission 2003)
The unethical activities at WorldCom were such that the difference between moral good and bad was forgotten. Leaders are important when it comes to the ethics of a company (Mendonca 2001). But here at WorldCom
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Public reaction to the scandals has been strong, and it has generated numerous suggestions to improve the ethical standards and behavior of business people. Some of the specific problems identified through these scandals are corporate accounting irregularities evidenced by the need for earning restatements by several large corporations
WORLDCOM ACCOUNTING FRAUD. WorldCom is a telecommunication giant in the US telecommunication industry. Faced with the slowdown in the telecommunication industry, WorldCom began to realize a decline in their stocks. This placed the company management under pressure to improve their financial performance in the highly competitive industry.
Kenneth Lay formed it in 1985 after the merger of two companies, the Inter-north and the Houston Natural Gas company (Jickling, 2002). In 2001, news begun to emerge of a major scandal in the company that resulted in bankruptcy that massively shook Wall Street.
..............................................................................4 3 Problems of Organizational Influence over Private Lives.............................................5 4 Moral Issues raised by the use of Polygraphs and Personality Tests....
Although WorldCom failure is attributed to the company’s aggressive acquisition strategy, accounting fraud also played a notable role in forcing the organization to file for bankruptcy. The WorldCom case reflects a range of ethical problems that are likely to cause further corporate failures in future.
Business ethical concerns have emerged as an increasingly significant threat to business organizations. In order to maintain business ethics and professional working environment, it is necessary to incorporate feasible principles and moral values to maintain an effective balance in between the expectations and the interests of the stakeholders.
Over the years, we have seen business organizations gaining a bad reputation. (Barry, 2000) Deontology on the other hand, refers to moral obligation and undertaking of duties with the right motives (Darwall, 2003). A business problem refers to a gap that exists between desired results from the normal results.
The principles of corporate governance were not adhered to and the facts and figures were not made public. All these were against business ethics but MCI bailed out WorldCom by attempting to reestablish itself. It wanted to capitalize on its brand and
On one hand, there is the option of taking the right action and whistle blowing these findings while risking retaliation from fellow employees. On the other hand, Cynthia has a choice of taking no action and risking her career
WorldCom was acquired by Verizon communication, which had been in business since the 19th century. The acquisition that was made to WorldCom directly resulted to a behavior by the senior managers. It can be argued that the behavior that was developed by AT& T Corporation was not due to the behaviors that were by the managers in WorldCom.
3 Pages(750 words)Essay
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