Anne Herhold and Stefania Adascalitei
19 Oct 2009
WorldCom Big Case 2
o After the merger with Sprint fell through, WorldCom realized that mergers were not a way to maintain profitability and needed to find new ways to make money.
o Employees were to do what they were told and not ask questions-despite any questions or concerns they had.
o “Do whatever it takes” attitude, even if the long-term costs were higher than the short term gains.
o Bad industry conditions put pressure on the Expense-to-Revenue Ratio that stock analysts and other competitors were watching.
o Bernie Ebbers gave an “emotional speech” to his staff to make them feel guilty and try to force them to improve company performance.
o Sullivan tells Vinson and Normand that their unethical accounting practices are not illegal and that he would take the fall if some legal action were brought up when pressuring them to make an unethical decision, trying to reassure them that their decision was right. Yates also felt pressured by Sullivan, but was not as morally conflicted as the other two because he was not considering resignation.
o Once Vinson made one bad accounting decision, Sullivan continued to pressure her because he knew she would do as he asked and she felt “trapped” but continued because the pressure did not stop.
o WorldCom was the only telecommunications company that could supply all types of phone services to a company (“single source for all telecommunications services” pg. 173)
o Bernie Ebbers feels that corporate codes of conducts are unnecessary and a “colossal waste of time” which will lead people in the company to make unethical decisions because with no rules and no enforcement of rules, mass chaos will inevitably occur since people will have opportunities to do whatever they feel is necessary to make money.
o WorldCom has offices that it wasn’t even aware of, so these...