Worldcom's Management Planning Function

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In every aspect of life, today's decisions impact the state of the future, this is determined by planning. In management planning involves setting objectives and determining a course of action for accomplishing these goals. This requires managers to be good decision-makers as well as aware of environmental conditions facing their organization in order to predict future conditions. Established in 1988, WorldCom Public Relations Group was formed to allow the most independent public relations firms to serve national, international and multi-national clients while retaining the flexibility and client-service focus inherited in independent agencies (WorldCom Public Relations Group, 2010). In respect to that, this paper will examine this WorldCom’s management planning function, how it's experienced legal issues; ethics and corporate social responsibility have influenced its planning management function. Lastly, this will also explore on the factors that influence WorldCom’s tactical, operational, and strategic planning. The telecommunications business concept of WorldCom was created with the help of Mr. Bernard Ebbers who was named CEO when the company went public in Aug. 1989 (WorldCom News, 2002). The company was well acquainted with Wall Street analysts and other investors, and in 1998, its $40 billion merger with MCI became the largest in history at the time. A year later in June, he was listed by Forbes as one of the richest men in the US when the stock ran up to a peak of $64.51 (WorldCom News, 2002). However, despite of all the success, the company came to a downfall when it was faced with legal issues. In year 2000 WorldCom improperly booked $3.8 billion as capital expenditures of which it did not account for their incurred expenses, but instead hid the expenses by pushing them into the future, appearing to its investors as spending less and therefore making more money (WorldCom News, 2002). Two years later the accounting scandals were brought to the public's attention, during which its success began to unravel with the accumulation of debt and expenses, the fall of the stock market, long distance rates and revenue (WorldCom News, 2002). The company's management planning was influenced by corporate social responsibility. This is when a business will maximize its positive effects on society, and minimizes its negative effects. An organization has a responsibility to its investors and stakeholders to provide accurate and honest information. For instance, WorldCom revealed to the public, on June 25, 2002, that it had incorrectly accounted for 3.8 billion in operating expenses disguising themselves as spending less, in order to make more money (WorldCom News, 2002). This apparent profitability pleased investors, who pushed the stock up to a high of $64.51 in June 1999 (WorldCom News, 2002). Ethics is yet another factor that influenced WorldCom’s management planning. This is the examination of moral and social responsibility in relation to which decisions and practices are addressed in an organization. WorldCom came face to face with ethical controversy when it filed for bankruptcy due to its legal matters, which led to 17,000 workers being laid off (Scripophily, 1996-2010). However, i think that the main ethical business issue in the WorldCom case was the false reports and the delicate information that was kept a "secret" from the investors. It is morally wrong to withhold information from consumers, especially companies that are investing so much money into a business. Thus, the true ethical issue that WorldCom lacked in this case was outright honesty. Management planning function provides goals, strategies, direction, and it defines responsibilities in any organization. Planners must then identify alternative courses of action for achieving objectives. After evaluating the various alternatives, planners must make decisions about the best courses of action for achieving objectives. They must then formulate necessary steps...
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