Examining a Business Failure

Examining a Business Failure

Examining a Business Failure - WorldCom

Robert Garrette

University of Phoenix

Examining a Business Failure - WorldCom

Abstract

This work gives a brief historical perspective of WorldCom – a previous telecommunications giant. WorldCom was the second largest telecommunications corporation in the world before executive greed paved the way for its downfall. The paper considers leadership style, ethics, personal integrity, and makes comparisons to Douglas McGregor’s Theory X and Theory Y. Finally, managerial styles and the organizations exponential growth pattern is examined as a causative effect that raised investor expectations. As a point of interest, I am a previous MCI telecommunications account manager and left the organization before the WorldCom acquisition.

Historical Perspective

1983 - A former high school basketball coach, Bernard Ebbers, forms the concept of a long distance company on a napkin at a coffee shop in Hattiesburg Mississippi. The organization is incorporated in 1984 as LDDS (Long Distance Discount Service). LDDS grows for the next 15 years via mergers and acquisitions. A 41 billion dollar merger with MCI in 1998 records the largest merger in history at the time. The recent merger drives stock prices up to a new high of $64 per share and investors along with Wall Street list this one as a favorite. In 2001, debt and expense continue to accumulate with the fall of the stock market, long distance rates and revenues. 2002 headlines WorldCom with accounting scandals, SEC investigations, and the resignation of CEO Bernard Ebbers.

WorldCom Whistleblower - Cynthia Cooper

Cynthia Cooper provides a major link to WorldCom history and current laws that govern corporate America today. Cynthia Cooper is the whistleblower who played a key role in exposing

the corporate fraud perpetrated at WorldCom.  She came forward in 2002 with information that

eventually brought to light the illegal...