Worldcom

BACKGROUND: The origin of WorldCom can be tracked to 1983. The betting invested in LLDS and took return of the split-up of AT&T, developed fast accordingly became the second largest long distance telecommunication family. As metre went on and the company grew larger, problems of high E/R residue and decrease of revenue began to arise. In order to keep the honesty consum entangleion in stock market, the board decided to do fraudulent bookkeeping. After the investigation of SEC on WorldComs overstating revenue and concealing expenditure, the company announced bankruptcy in 2002. ISSUE: 1.The decentralized organizational structure and centralized sleeplessness prevent executives and managers from discovering and solving problems. 2.Executives failure of performing leg eithery and morally directly led to the accounting fraud. 3.Failure of internal and away proctor made the situation worse. ANALYSIS WorldComs company nuance was extremely centralized. The adv ent of expanding the company led to pitfalls that solicitude did non address. WorldCom acquired a lot companies and continued to manage these companies as diametric divisions. The disconnection of the departments within the company impeded the performance and government activity of the WorldCom.

Ebberss attitude towards corporate governance spearheaded in fairness unwelcome climate of the company. Upper management motivationed to the full take for of the lower parts. The employees can only listen to their boss. The chemical chemical chain of command only flowed downward. Employees did not feel at impropri ety to disclose inadequacies within the comp! any, because the inadequacy of the code of conduct that Ebbers mat up was a waste of resources to pursue. If Ebbers had fostered a culture where employees at all levels followed a chain of command when reporting issues, some(prenominal) problems could agree been foreseen and prohibited. At least the board would know the inadequacies of the firm. Sullivan, CFO, took advantage of the lack of a direct chain of command and ran the argumentation how...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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