Examining Business Failure Essay

1073 words - 5 pages

Examining Business Failure
Examining Business Failure PaperUniversity of PhoenixFebruary 20, 2010Linda ArtisSuccess of WorldCom and EbberBernie Ebber, CEO and founder of WorldCom, entered the telecommunications industry in Mississippi in 1983, by founding LDDS. Success would soon pay off for him as he grew the company through acquisitions and in 1995, changed the company's name from LDDS to WorldCom. In 1998, WorldCom purchased MCI for $37 million; this was a huge move for WorldCom, as the telecommunication giant went down in history as being the 2nd largest long distance company. Throughout the 90's WorldCom became highly recognized, as its name was synonymous to success, due to its ...view middle of the document...

The acquisition binge would soon end in the early part of 2000, due to objections with antitrust, as the telecommunication company attempted to acquire Sprint. Ebber journeyed down a complicated and deceptive road as he compelled himself to continue to display increasing income and revenue through false misrepresentation. Ebber basically, got caught up in his own deceitful practices therefore, causing a downward spiral in the business and economic activity of the telecommunication industry. Ebber felt that he needed to demonstrate ever-increasing revenue and income, and the one way to reach this objective was through financial misrepresentation. Simultaneously, there became an expectation problem with Wall Street, because of WorldCom's expedient success; there was no reason to think that the company wouldn't continue its expected revenue growth well into double-digits.WorldCom however, had more newly acquired companies than its management could catch up with. Proper management had not been put in place in order to accommodate the transitioning. Bernie Ebber's strategy changed, and once again, relied on his unethical, irrational behavior as a deciding factor in his web of schemes. In an effort to appease Wall Street's insatiable expectations, Ebber made a dreadful decision to deceptively alter WorldCom's books, as oppose to facing temporary failure.Demise of WorldCom and EbberBernie Ebber was forced to resign after suspicions were raised regarding over $365 Million dollars worth of personal loans that were disbursed by the company. WorldCom's failure began as early as 1999, when many of their business clients had to perform budget cuts on communication equipment and services. WorldCom began to struggle with over $41 billion dollars worth of debt and $11 Million dollars worth of accounting irregularities. Several of the company's executives were prosecuted on charges related to securities. MCI's took over WorldCom, which resulted in the firing of the COO, CEO, CFO,...

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