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Essay / A Look at the WorldCom Scandal - 958
WorldCom was the ultimate success story among telecommunications companies. Bernard Ebbers took over as CEO in 1985 and built the company into a very profitable business, at least on the outside. In 2002, Ebbers resigned, WorldCom admitted to the fraud, and the company declared bankruptcy (Noe, Hollenbeck, Gerhart, and Wright 2007). The company was at the heart of one of the largest accounting frauds seen in the United States. The demise of this telecommunications behemoth can be attributed to many factors, including his aggressive and defensive power-based organizational culture and the intimidation tactics he employed. However, this fiasco could have been avoided if WorldCom had designed a system of checks and balances that would have helped them avoid fraudulent claims. The Sarbanes-Oxley Act was instituted in the wake of major corporate fraud cases in an effort to eliminate the possibility of similar cases in the future. WorldCom's aggressive, defensive, power-based culture led to a chaotic organizational structure, numerous unethical practices, and fostered harassment. This type of culture is typically found in companies experiencing exponential growth and a rapid pace (The Five-Minute Guide to Culture, 2001). WorldCom had acquired companies across the country to become the second largest long distance telephone company in the United States (Burch, 2009). However, WorldCom's rapid growth was not managed methodically. They were careless in their acquisitions. In fact, most offices were unaware of the existence of other offices (Kaplan & Kiron, 2007). Another characteristic of the aggressive-defensive culture is the general belief of employees that they must be responsive to the requests of their superiors (Kinicki & Kreitner,...... middle of article...... 48- 49). New York, NY: McGraw-Hill/Irwin.Namie, Managing Director (2003). The 2003 WBI Report on Abusive Workplaces. Institute on Workplace Bullying. Retrieved March 16, 2011 from http://www.workplacebullying.org/res/2003E.html Noe, RA, Hollenbeck, JR, Gerhart, B., & Wright, PM (2007). Fundamentals of Human Resource Management (2nd ed., pp. 383-384). New York, NY: McGraw-Hill/Irwin. Robbins, S.P. and Coulter, M. (2009). Management (10th ed., pp. 108-109). Upper Saddle River, NJ: Prentice Hall. The five-minute guide to culture. (2001). Readership Institute. Retrieved March 16, 2011 from http://readership.org/culture_management/culture/data/five_minute_guide.pdf Wiedmer, T., (January 2011). Workplace bullying: costly and preventable. Delta KappaGamma Bulletin, 77(2), 35-41. Retrieved March 16, 2011, from Research Library. (document ID: 2257395091).