World Com

Accounting Fraud at World Com
Todd Chaffey
ORG 500 –Foundations of Effective Management
Colorado State University – Global Campus
Dr. Jama Bradley
November 7th, 2010

Accounting Fraud at World Com

The collapse of the World Com Group was a tragic event that devastated millions of people including, customers, shareholders and employees.   The change in the Telecommunications Act of 1996 which introduced competition to the telecommunications industry opened the door to rapid growth.   So rapid was this growth that business ethics and moral behaviour by the top leaders of World Com did not find its place or take root in the culture of this company.   This report will identify that the top leaders of World Com acted   in such a way as to develop a culture that encouraged a systematic attitude conveyed from the top down that employees should not question their superiors, but simply do what you are told. (Kaplan, 2007, p.3).   The accounting breeches at World Com were the fruit of a culture of profit and paid very little interest in the product and services that World Com delivered to its customers. What was the culture of world com?   How did this culture contribute to its eventual demise?
Leadership by Example
Robbins, Coulter and Vohra state that “The original source of a culture reflects the vision of organizational founders.” (Robbins et al.2010, p.65).   The President of World Com Bernard Ebbers and CFO Scott Sullivan both were instrumental in the early success of the company as well as its eventual demise by building a culture of unethical behaviour and profit based outcomes.   This was demonstrated over and over again by both leaders as demonstrated by the goal of the organization.   Ebbers would state “Our goal is not to capture market share or be global. Our goal is to be the number one stock on Wall Street (Kaplan, 2007, p.4).
Perhaps Ebbers received his motivation and training from reading Milton Freidman’s essay in the New York Times...