Paper

Examining a Business Failure – WorldCom Inc.

The establishment of WorldCom Inc. occurred in 1983 when businessmen Murray Waldron and William Rector devised a plan to create a discount long-distance provider, and in 1985, Bernard Ebbers became the Chief Executive Office when he became an early investor. After numerous acquisitions and mergers of other telecommunications companies, which included MCI Communications, WorldCom became one of the largest long-distance providers in the United States. Then in July 2002, the telecommunications giant “failed and was put into bankruptcy, and the U.S. witnessed one of the largest accounting frauds in history” (di Stefano, 2005). The failure of WorldCom was because of the Chief Executive Officer, Bernard Ebbers, and his objectives for the corporation. By comparing and contrasting leadership, management, and organizational structure, it will show why WorldCom failed as the second largest telecommunications company in the U.S.

Leadership

According dictionary.com (2010), leadership is “the position or function of a leader and the ability to lead.” Bernard Ebbers led WorldCom since 1985, creating a culture, philosophy, and structure for the organization to build upon. Bernard was also a community activist and supporter of disadvantaged black youth. “Ebbers had given Tougaloo College (Clinton, Mississippi) more than $1 million along with new information technology…he also helped Leroy Walker, Jr. purchase a country club and computers to be used by disadvantaged black youth” (Padgett & Baughn, 2002). Bernard Ebbers was a very likable man with high aspirations and an entrepreneurial vision, according to friends and family. Ebbers “helped bridge the racial and economic divides that continue to plague Mississippi…he teaches Sunday school at his Baptist church each week, and he serves meals to the homeless…” (Padgett & Baughn, 2002). Bernard Ebbers was a true manager—he “planned, organized, lead, and controlled” (Robbins & Judge,...