Worldcom

BACKGROUND: The origin of WorldCom can be tracked to 1983. The prodigal invested in LLDS and took expediency of the split-up of AT&T, developed fast thusly became the second largest long distance telecommunication family. As powder store went on and the company grew larger, problems of high E/R symmetry and decrease of revenue began to arise. In order to keep the loyalty consum drag inion 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 watchfulness 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 observe made the situation worse. ANALYSIS WorldComs company finis was extremely centralized. T he advent of expanding the company led to pitfalls that solicitude did not address. WorldCom acquired a lot companies and continued to manage these companies as variant divisions. The disconnection of the departments within the company impeded the performance and administration of the WorldCom.

Ebberss attitude towards corporate governance spearheaded in truth unwelcome climate of the company. Upper management motivationed to the full understand of the lower parts. The employees can only listen to their boss. The chemical compass of command only flowed downward. Employees did not feel at familiarity to disc lose inadequacies within the company, becaus! e 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 credit line how...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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