Business Failure Paper

Business Failure Paper

Kimberly Garrison

University of Phoenix

Business Failure Paper

WorldCom started small and then grew into a large international company. The leaders of the company wanted it all. Management covered up the scandal at WorldCom before the company had to file for bankruptcy. Bankruptcy brought the problems with the company and the accounting cover-ups. The organizational behavior theories and contributions from all levels of the company helped in the downfall of WorldCom.

WorldCom followed the classical theory where if incentives were given people would work to achieve them (Sharp, 2010). In the case of WorldCom, the incentive would be that WorldCom grow into a larger company and in some cases, it did not matter the cost. The idea of money being made helped the employees understand that if money was made that it could be distributed to the employees.

Management knew there were problems within the company, when employees filed a lawsuit against the company close to a year before the collapse. Management did not investigate the allegations made by the employees, and if management had investigated, the fall of the company might not have been a bad as it was. Leadership and management showed poor ethical behavior by not investigating the allegations (Weinberg, 2002).

When the accounting scandal broke the directors of the company did not believe that what had been discovered if the accounting records. The company still worked with the banks to restructure the debt that was showing to keep the company afloat even after news had been released that the company had a major accounting problem. With management not believing the accounting errors were made, this just shows that the leadership and management was turning a blind eye to what was happening with the company (Ackman, 2002).

The organizational structure of WorldCom was constantly changing with the acquisitions that took place from the time WorldCom was a...