Worldcom Case Study Answers

1042 Words 5 Pages
There are many decision-making traps WorldCom’s board has succumbed to. One of these trap is relying on one individual to lead and decide the future of the company. The leader of the company, Ebber was conceited, refrained from the truth, and short tempered. He made it visible throughout the company that he did not like negative and only accepted numbers that represent profit. With a similar image to Mao Zedong during the Great Leap Forward, the company was put through an economic crisis with debt as severe as 3.8 billion. The CEO was also resistant to change at the time. He did not like to use e-mails to communicate with his employees. He also led his employees by telling them to do whatever off the top of his head without understanding
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The blame of poor decisions falls on the leadership of the company. Through investigations, it is revealed that not only was Ebber the problem but also his right hand man Sullivan. Ebbers started out as a CEO with potential. He increased company revenue from 1 million to 17 billion by the turn of the century. Everything started going downhill after 2000. People describe his personality to be resistant to change and new technology, not accepting the truth and negative results, and also short tempered. Another fault that lies on Ebber is not being able to prevent the negatives from happening. With this kind of style his subordinates also followed suite. Similar to the analogy above, Ebber was similar to a dictator. His resistance is what led to the buying out of the company. Another potential cause of poor decision making is being not well informed. If he were to be open to new ideas and the truth from his employees, he may have corrected the situation years before he gets indicted with charges of fraud, conspiracy, and false …show more content…
One of their main responsibility is to hire and manage the CEO. They only hired a potential CEO but did not follow through with management. They were not able to guide the CEO or control his actions. In this case the Board of Directors may not have compensated the CEO fairly leading to this sort of corruption. The board of directors is also responsible for creating a mission and vision statement and to also adhere to the statements to ensure correct progression. If the board were to incorporate the words “with integrity and honesty” into their mission statement, more employees would have spoken up and reported their CEO for fraud. The last responsibility and fault that lies with the board is not creating enough rules to regulate. If they had clear rules defining what actions are acceptable or for how long, then Ebbers would not have done what he did or do so temporarily until he is able to remediate the

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