WorldCom Group, a telecommunications comp some(prenominal), caused one of the largest humbug and bankruptcy scandals in American and global corporate history. In total, more than $11 billion worth of prankulent report entries and misstatements were detected. On July 21, 2002, the federation filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. Bernie Ebbers, Former chief executive officer, was sentenced to 25 years in prison house on July 13, 2005.
Major Factors Contributed to Fraud
The following were several major factors that contributed to the fraud at WorldCom:
Company Culture
According to the facts given in the case, Bernard Ebbers and Scott Sullivan, the CEO and CFO of the company at that clock, had created a company burnish, in which leaders and managers were not to be questioned. The employees simply just did what they were told. This culture discouraged dissenting opinion and ensured followers would conform. Moreover, an employee could be discount from a job if he or she attempted to argufy senior managers. Hence, most employees felt too insecure to drive forward suspicious or fraudulent practices.
In addition, the charge of the company did not even put forth any effort to establish a corporate computer code of demand.
As stated in the case, Ebbers reportedly described creating a code of conduct as a colossal waste of time. Without a corporate code of conduct, management appeared to be insouciant with ethics and focused solely on the companys goal, which was to be the number one stock on circumvent Street; therefore, employees tended to commit fraud because they felt that ethical conduct was not a focus or priority at heart the company.
Company Structure
WorldComs company structure significantly contributed to its failure. The company had acquired 11 companies in only six years, from 1991 to 1997, but had failed to right integrate them in the company. According to the facts given in the case, for each one department had its own rules...If you want to get a plenteous essay, order it on our website: Ordercustompaper.com
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