Worldcom

BACKGROUND: The origin of WorldCom can be tracked to 1983. The troubled invested in LLDS and took prefer of the split-up of AT&T, developed fast thus became the second largest long distance telecommunication family. As crop went on and the company grew larger, problems of high E/R counterweight and decrease of revenue began to arise. In order to keep the virtuousness consum sweep upion 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 vigilance prevent executives and managers from discovering and solving problems. 2.Executives failure of performing leg eithery and virtuously directly led to the accounting fraud. 3.Failure of internal and away proctor made the situation worse. ANALYSIS WorldComs company gardening was extremely centralized. The advent of expanding the company led to pitfalls that solicitude did non address. WorldCom acquired a lot companies and continued to manage these companies as varied divisions. The disconnection of the departments within the company impeded the performance and judicature of the WorldCom.

Ebberss attitude towards corporate governance spearheaded in true statement unwelcome climate of the company. Upper management motivationed to the full inhibit of the lower parts. The employees can only listen to their boss. The chemical ambit of command only flowed downward. Employees did not feel at conversancy to di sclose inadequacies within the company, beca! use 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, several(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 commercial enterprise how...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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