The Rise and Fall of Worldcom

Topics: Leadership, Bernard Ebbers, MCI Inc. Pages: 3 (922 words) Published: November 12, 2012
Group 1
* Shaghayegh Davari
* Wan-Ting Shao
* Ananya Chandra
* Niteesh Chinta
* Shraddha Rane
* Swathi Punreddy The Rise and fall of WorldCom
This case study WorldCom is a telecommunications company which was led by CEO, Bernard Ebbers, and CFO, Scott Sullivan. In 1999, WorldCom was not meeting Wall Street’s revenue and earnings expectations, and it appeared that the coming year would produce more bad news. The CFO argued for setting realistic targets. However, the CEO insisted that the company needed double digit growth, and pushed for aggressive targets. A great deal of focus was not putting on “team work” and being a strong “team player”, which is said to have been a strategy to reduce dissenting opinions, eventually leading the organization not to follow a “groupthink” attitude. There is limited evidence to suggest appropriate review financial reporting controls were being reviewed independently and there was a lack of stringent monitoring of the internal control system and therefore the quality of the controls around the posting of journal entries to the general ledger was identified as a weak control.

The Bernie Ebbers and Scott Sullivan where the leader of the company and influence of their leaderships over their followers which were the subordinates refer to their power and is relied on three bases, coercing power, legitimate power, and information power. Leadership powers can be used by themselves or combined so that the leader has maximum influence. The leader will therefore need to think carefully about which power to use which in this case was not used in a way that at last resulted in decrease which was company’s bankruptcy.

Firstly, the main relevant theory in use by these managers for leading company was coercive power, they showed their ability to apply punishment to subordinates and it is originating from the manager’s position and controlling co-worker‘s...
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