Running head: WORLDCOM FAILURE RESHAPING BUSINESS
WorldCom’s Chief Executive Officer’s Failure of Responsibilities Reshaping the Business Environment
WorldCom’s Chief Executive Officer’s Failure of Responsibilities Reshaping Business Environment
Bernie Ebbers’ leadership as Chief Executive Officer for WorldCom created the largest telecommunication bankruptcies and the largest bankruptcy in the corporate world. His unethical decisions to allow false financial reports to continue to be reported as inflated profits, where in reality WorldCom was losing profits while senior management was raping the money vaults. Bernie Ebbers’ action created change not only within the ...view middle of the document...
If the Chief Executive Officer does not make ethical decisions, the company will be doomed to fail as in the case of Bernie Ebbers at the helm with WorldCom.
Bernie Ebbers spun webs of deceit, fraudulent documents, and false hope. His greed did not stop there as he took billions of dollars of false tax credits and millions of dollars in loans from WorldCom. Ebbers deceitfulness was covered by deceiving the world of WorldCom’s growth and profit by promoting “through a spreadsheet developed by Tom Stluka, a capacity planner at WorldCom” (Romar & Calkins, 2006). The model would become to be known as the Stluka’s model and “suggested that in the best of all possible worlds Internet traffic would double every 100 days” (Faber, 2003). In essence, Ebbers fooled the board and stockholders that their company was growing by applying the best case scenario as fact while reaping WorldCom of their actual holdings. WorldCom would act as if they actually achieve the best case scenario, when they have not, in decision making meetings.
Richard Noland describes the differences between managers and Chief Executive Officers (1988). Mr. Noland paints the picture that where a manager would research a project and then brief different options available to the board for a decision to implement. The Chief Executive Officer would delegate the project to a manager, and then decide on the course of action and back-brief the company board of the change or action. While Bernie Ebber’s actions appears to be unethical and does not conform with societies, does his role as Chief Executive Officer actually allows for this option to be seen as his duty? Mr. Noland describes top level positions, such as a Chief Executive Officer, busy with “planning strategy, cultivating a network of contacts in the community and industry, researching markets and products, supervising their senior management teams, working with vendors, and preparing reports” (1988). Bernie Ebber’s attempts “to paint himself hopelessly clueless” (Lazarus, 2005) could be feasible, but at the same time far fetched. Chief Executive Officer‘s design the future of the company they lead. They take an idea and turn it into reality in hopes of increasing their footprint both financially and hold on their particular market. While Ebber’s has a duty to ensure his senior managers and executing that vision with ethical responsibility, it is possible that his senior manager(s) provided false briefs leaving Mr. Ebbers in the dark.
While it is unlikely that Ebbers was being set up to take a fall, let’s look at it from another view. Did Bernie Ebbers do his job as Chief Executive Officer of WorldCom? His primary mission was to grow WoldCom and create profit. To do so, a company of WorldCom’s magnitude must have investor’s faith that it will provide a return. Ebbers’ use of the Stluka’s model provided that faith and in essence creating growth and profit. However, Ebbers’ pitfall was not being...